Many retailers that started their “digital first” initiatives prior to the pandemic will have a clear advantage over those who have not. These firms have taken the lead and are showing key characteristics of how customer experience has changed during the pandemic. In addition, retailers that had a culture of innovation and agile thinking were able to implement improvements faster as well.
Why is Customer Experience Important During Downturns?
But first, before we jump into each of the traits represented by the leading firms, why is customer experience such a factor during market downturns? Actually, we don’t have to look too far in the past with respect to the 2008 financial crisis. During that timeframe, the results showed that customer experience leaders saw less negative impact, rebounded faster, and were able to achieve three times the shareholder returns in the long run compared with market averages.
In addition, within the following 24 months, we saw a number of new experience platforms rise up and represent innovative new models for growth experience. Who would have thought that this was a timeframe when companies like WhatsApp, Credit Karma, Venmo, Groupon, Instagram, Uber, Pinterest, Slack, Google Ventures, Cloudera, AirBnB, Warby Parker, and the Apple Store got their start?
6 Aspects of Customer Experience During COVID-19
In the future, my belief is that we will look back at this pandemic and take note that there were a number of primary characteristics of customer experience that shaped many new startups. But what’s even more important will be how existing companies reinvented themselves, created new relationships with their customers, and implemented these changes faster than ever before! So, what are these characteristics? Lets briefly dive into each one.
1. Keeping the Distance
While we have seen many examples of social distancing, one thing is for certain — there hasn’t been any consistency. What one retailer views as a priority (i.e., wearing masks and gloves along with social distancing), walking into other retailers would give you the feeling that there isn’t a pandemic taking place at all.
The retailers that are focused on social distancing like Walmart have enacted volume managed limitations within their stores. For example, during the “initial” stage of the pandemic, they managed no more than five customers for each 1,000 square feet at any given time, roughly 20% of the store’s capacity. In addition, there were clear directions and signage that communicated to customers where to stand in queue lines, in addition to walking down the aisles.
The most creative approach I have seen is at Disney theme parks, where they combined their brand with social distancing by the use of Stormtroopers barking out polite reminders for guests to stay the distance. Many guests enjoyed the reminders since it was part of the overall experience!
2. Staying Resilient & Efficient
While online sales grew 49% year-over-year compared to the March baseline, grocery stores alone increased 110% between March and April. How did retailers and grocers support this massive unexpected growth? Was it because they already had “doubled down” on digital prior to the Pandemic?
Perhaps, but many others who had forecasted innovative projects to be implemented over the next 2 – 3 years quickly figured out how to implement their improvements within several weeks. Innovation and transformation using agile approaches (i.e., small teams, quick sprints, employee empowerment with test and learn) enabled them to make these changes quicker. In addition, the overall decision-making process became more efficient due to knocking the silos down between business divisions and also with IT overnight.
Over time, history will show which changes were effective. For example, Lowes recently rolled out video engagement for their PRO Contractors relationships so that an in-store experience can be provided to the contractors out in the field. In addition, we have seen retailers like DSW Shoes and Hy-Vee Grocery that are in completely different segments partner together in leveraging each other’s supply chain and location assets.
Finally, one key aspect of customer experience is related to safety / cleanliness. Studies have shown that if retailers haven’t figured this out yet, they will be hurting themselves with respect to not providing an environment that encourages return customer visits. From a wholesaler perspective, if you live in a major city like New York, then you have experienced the food wholesalers now selling directly to the consumer. These are all examples where enterprises have shifted on-the-fly and created an entire new market for themselves via direct to consumer experience!
3. Do We Need to Touch?
Never before has there been such a large amount of impact on the customer experience in such a short amount of time! The contactless experience has continued to see improvements each and every week since the pandemic started. For example, it wasn’t until after restaurants opened that we now see the use of QR codes within restaurants for access to menus. How long will it take before we see the ordering process included in with QR codes, as well? While mobile contactless payments have been around a while, overnight we are seeing the adoption across a higher percentage of retailers.
Even gas stations have gotten into the act with the availability of gloves at the gas pump. Some retailers won’t let customers handle the merchandise; instead they have store clerks showing the products to the customers. Naturally, all of these examples are an important part of the customer experience and will determine whether customers return to the store or not. What will be interesting is to see which of these solutions last long-term and which will slowly disappear.
4. Stakeholders vs Shareholders
On the one side, the shareholder reigns supreme. This position gives rise to “short-termism” — i.e., operating a corporation to maximize today’s profits. On the other side, a retailer’s responsibility is to a broader set of stakeholders. Retailers have a responsibility to consider the interests of all stakeholders, including shareholders (e.g., the community around that retailer, its employees, and even those affected by that corporation’s impact on the environment).
By ignoring stakeholders, an organization that is primarily focused on profits will likely suffer negative results. From an employee standpoint, some retailers are committed to avoiding layoffs and guaranteeing 100% of salaries from April to June. Employee safety concerns also prompted some businesses to ask their staff to work from home, ahead of compulsory lockdowns, or even temporarily close their operations for safety reasons. Others, perceived to have exposed their employees to safety risks by keeping open their operations, faced internal and public controversy.
Besides helping to address the pandemic, stakeholder-focused corporations are creating new ties with stakeholders in the community and society as a whole, and therefore might avoid serious reputational and financial repercussions related to the experience they have with their customers.
5. Do We Want the Government’s Intervention?
Will the government’s involvement continue to rise or decline “post-pandemic?” If you’re a small-to-medium sized business, chances are you have received benefits from one of the government stimulus programs. While that may not have directly impacted the customer experience that businesses provide to their customers, the restrictions imposed by the government on whether you can open your doors certainly has. What will the new relationship represent between the consumer, retailer, and government? Is there a trickle-down effect? How will this impact the customer experience long-term? How much of this is related to a retailer’s lack of customer experience across all touch points?
6. The Evolution Underfoot!
Upon store re-openings, reports have shown that 50% of consumers have switched channels during the month. The customer is open for change. How will the customer experience be a factor? If there isn’t a positive experience focused on safety and cleanliness, the consumer will switch immediately. How will retailers reinvent themselves to acquire more market share? Some retailers have seen their “new customer” volume increase by 300% since May 9, 2020. Customer experience will be a factor in return rate %. For those retailers that don’t evolve the relationship they have with their customers, they will be short-lived.
Will Retailers Survive the Pandemic?
So, in the end will retailers survive this? How will retailers emerge stronger? What will be the deciding factors in the end? How will customer experience played into a retailer’s sustainability?
Retailers have rewired themselves faster than ever before, —and with effective approaches representing a large focus on customer experience. While some retailers have already shuttered their doors or filed for bankruptcy, the retailers that will survive will continue to make continuous improvements that not only provide a positive customer experience based upon the above six factors, but also based upon providing the right product at the right time via the right delivery vehicle. The key will be how retailers utilize a new customer experience model to keep their customers engaged in a personal way while providing a multi-channel shopping experience.