Customer Experience

Everybody Talks About CX, but Nobody Does Anything About It

Customer experience quality didn’t improve in the retail industry this year, despite keen competition among online retailers, according to Forrester’s U.S. 2017 Customer Experience Index.

The three highest-ranked online retailers — Etsy, QVC and Zappos — came within fractions of a point of each other, based on data released last week.

Among the industries Forrester examined, online retail was the only one in which no brands kept the same position as last year. Forrester analyzed 314 online retail brands across 21 industries.

Average CX quality at online retail scores decreased by a single point this year.

“In the era of an attention economy, we are trading loyalty for convenience, for value, and for status,” observed Ray Wang, principal analyst at Constellation Research.

“This is why CX is in a confused state,” he told CRM Buyer.

Perhaps familiarity breeds contempt, suggested Michael Jude, research manager at Stratecast/Frost & Sullivan.

“We see the same thing in brick-and-mortar retail, where competition increases [customer] expectations,” he told CRM Buyer.

Customer experience in the online retail industry could be stagnant because “it might reflect issues beyond CRM — such as supply chain, ERP, back-office and logistics,” noted Nucleus Research CEO Ian Campbell.

Etsy Comes Out on Top

Etsy, which ranked fifth last year, took the top spot this year, although its CX index score didn’t increase. Instead, competitors’ scores fell.

However, Etsy is a special case, suggested Frost’s Jude.

It “has always been a niche retailer serving mostly the craft crowd, and does what it needs to do pretty well,” he said. “Other sites seek a broader appeal.”

Further, Etsy is a marketplace, which “suggests individual retailers may be more focused on — and able to create — more personalized experiences, given their smaller scale and the fact that each transaction is impactful,” said Rebecca Wettemann, VP of research at Nucleus.

CX in the Doldrums

None of the 314 brands Forrester analyzed has risen to the top of its rankings and continued to move upward, which is the mark of a true customer experience leader.

In the absence of real leaders, Forrester said, there are only four types of brands:

  • Languishers rose high and then stalled without a statistically significant score change for at least two years;
  • Lapsers rose and then fell back;
  • Locksteppers moved up and down with the pack and failed to differentiate themselves because the quality of their CX remained roughly on par with the competition; and
  • Laggards stayed at or near the bottom. The ISP industry is the only one with 100 percent laggards.

All About the Feelings

Emotions drive customer loyalty in online retail, Forrester found.

That’s because “buyers are just a click away from making their emotions known,” Nucleus’ Wettemann told CRM Buyer.

Among the positive customer experience emotions are feeling confident, delighted, happy, appreciated, respected and valued.

Negative customer experience emotions include annoyance, disappointment and frustration.

Eighty-five percent of online retail customers who felt happy planned to spend more, and 88 percent said they would advocate for the brand, Forrester found. Those were the highest percentages across all industries for enrichment and advocacy.

Brands should focus on emotion to differentiate themselves, Forrester recommended.

“Emotion probably comes in there somewhere if the experience is good or bad,” Frost’s Jude remarked. I would say that utility — the ease with which one can find something and order it — drives online [retail]. Online is about convenience.”

Offering a Positive CX

Instant gratification plays a key role in generating positive emotions, Constellation’s Wang pointed out.

Retailers have to deliver on the brand promise to avoid generating negative emotions, she said.

“Ensure that the service automation is effortless and well done,” Jude suggested.

Most people home in on CRM for the customer experience, but today it’s really about the whole customer ecosystem — how CRM ties into the supply chain, ERP and the back office,” Nucleus’ Campbell told CRM Buyer. “It’s not simply understanding the customer, but also having the means to deliver.”

Richard Adhikari

Richard Adhikari has been an ECT News Network reporter since 2008. His areas of focus include cybersecurity, mobile technologies, CRM, databases, software development, mainframe and mid-range computing, and application development. He has written and edited for numerous publications, including Information Week and Computerworld. He is the author of two books on client/server technology. Email Richard.

1 Comment

  • Nice article and it seems to be more than worth to study this story. Great contribution by author Richard and, thanks much for sharing such an informative article. I really enjoyed reading this story, this has so many information studied by Forrester. Also, I agree to this "Online is about convenience" as this is very true. Cheers!

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