Online Customer Experiences in the United Kingdom Retail Market. Consumer Expectations Versus Retailer Reality

Transcription

1 Online Customer Experiences in the United Kingdom Retail Market Consumer Expectations Versus Retailer Reality

2 A 2011 study of British consumers showed that most want to engage with retailers across multiple online channels while comparing products, making purchases, and seeking service online. Yet their experiences often fall short of expectations causing a negative impact on the brand. In 2011 RightNow Technologies (acquired by Oracle in March 2012) commissioned a study to determine how British consumers want to engage with retailers while shopping online. This study found that consumers are increasingly turning to a variety of online channels during the purchasing process. They re using these channels to research and compare products, make purchases, and get service and support. And they expect retailers to serve them efficiently across all these channels. However, the study also found that although many consumers are seeking closer, socially enabled interactions with retailers, the service they actually receive often falls far short of their expectations. Moreover, when customer service fails, many consumers air their frustrations online, creating a public record of each failed interaction. The clear message: individual consumers are more empowered than ever, and their voices are more influential. As a result, exceptional customer service is now considered a given. The consumer study casts light on how retailers can meet these expectations to create value-added interactions and encourage customer loyalty. This report on the study s findings provides insight into Online shopping practices in the U.K. today British consumers preferences and expectations for customer service and support Consumer behavior in the face of frustrating experiences as well as positive ones Ways retailers can better engage consumers by taking advantage of new and increasingly popular channels such as social networking, mobile Web, and Web chat 2

3 QUICK FACTS: ONLINE SHOPPING HABITS OF BRITISH CONSUMERS 34 percent of the 16- to 24-year-old consumers reported doing all or most of their shopping online. 90 percent of the 25- to 34-year-old consumers reported doing some online shopping over the past 12 months. 75 percent of the consumers over 65 reported that they have shopped online. The State of Online Shopping in the U.K. According to the British magazine Retail Week, The phenomenal growth of e-retail has shown no sign of stalling, with consumers embracing online as an essential platform for shopping. The strength of the market offering consistent choice, value and convenience is such that even the global financial crisis has failed to derail its progress. In fact, it is estimated that more than UK 250 billion has been spent online in the past decade. 1 The 2011 study clearly confirms the expanding influence of the online market, with nearly 9 out of 10 respondents indicating that they d shopped online in the preceding year (a response that bore out across all age groups). In particular, respondents between the ages of 16 and 24 reported that they did all or most of their shopping online. The survey also indicated that consumers are purchasing a wide variety of goods online, from food to large household items and electrical goods costing more than UK 600. Further indicating the shift to online channels, a third of the respondents who had purchased a product in a physical store reported subsequently visiting the retailer s Website to obtain customer service. The study also revealed that British consumers consult a wide variety of online sources before actually making purchases. According to Forrester Research, European consumers are still worried because of the economy and will therefore research online extensively before closing the deal. 2 And indeed the study confirmed that supposition, showing that consumers are most likely to view price comparison Websites as reliable sources of information (54 percent). In fact, such sites are even viewed more frequently than recommendations from friends and family (48 percent). Of those consumers who do all their shopping online, more than half (54 percent) cited social networking sites such as Facebook as their go-to sources for prepurchase research. Clearly, the social Web offers real selling opportunities for retailers. Equally clear is the likelihood that consumers researching purchases on social media sites will be influenced by other customers postings good or bad. 1 Retail Week, Embracing the E-Commerce Market, November 12, Forrester Research, Trends 2010: European Retail E-Business and Channel Strategy. 3

4 SUPPORT METHODS FAVORED DURING AND AFTER PURCHASING Self-service. 36 percent of the respondents used Web self-service during purchasing; 26 percent did so postpurchase percent of the respondents used for support during the purchase process; 34 percent did so postpurchase. Phone. 14 percent of the respondents relied on phone support during purchasing; 18 percent did so postpurchase. Instant messaging/chat. 11 percent of the respondents used Instant messaging/chat for support during purchasing; 9 percent did so postpurchase. Phone plus self-service. 11 percent of the respondents used phone and Web selfservice to obtain support during purchasing; the same percentage used both channels for support postpurchase. Smartphone. 7 percent of the respondents used a smartphone to obtain support during purchasing, 4 percent did so postpurchase. None. 38 percent of the respondents didn t seek support via any online channel during the purchase process; 41 percent did not seek support from any of these channels postpurchase. Service and Support Methodologies and Expectations The study next examined the question of customer service and support, attempting to find out what methods customers employ to obtain service both before and after making purchases. Highlights of the findings include the following: Web self-service from retailers own Websites served as the top prepurchase support selection for survey respondents (with 36 percent indicating this to be their top choice) providing a strong endorsement for Web self-service technologies that deliver quick and easy access to answers, encourage purchases, and replace morecostly customer service interactions. More than a quarter of the shoppers surveyed (28 percent) reported having ed retailers customer care departments during the purchase process. However, postpurchase, that number increased to 34 percent showing that at this point in the shopping process, respondents were significantly more likely to the retailer than they were to resolve their issue via Web self-service. Nearly 40 percent of the online shoppers reported that they had not sought help during their purchases, whereas nearly 60 percent of them reported seeking customer support after completing their purchases. This suggests that retailers could do a better job of engaging consumers at earlier points in the purchase process. These results point to the need for retailers to meet and engage customers in the channels they prefer and at just the right points in the purchase cycle. The range of channels used by consumers likewise underscores the need to deliver a single seamless conversation with customers across all communication points: phone, online, , Web, chat, social media, and brick-and-mortar outlets. In addition to analyzing customer service habits, the survey also investigated consumer expectations with regard to online service. What it found is that those expectations are soaring: almost three-quarters of the online shoppers expect superb service to be included in the overall purchase price. Not surprisingly, these expectations increase with the value of the goods purchased (see Figure 1). Even at the lowest price points, respondents expressed high expectations for customer service and support functions such as Web self-service, , and Web chat: 4

5 QUICK FACTS: NEGATIVE EXPERIENCES AMONG ONLINE SHOPPERS Younger consumers are more likely to have had negative experiences. (28 percent of the respondents under 34 reported having had negative online shopping experiences.) Older consumers are less likely to have had negative experiences. (Only 13 percent of the respondents over 65 reported having had a negative experience.) Women are more likely to share their frustrations on social media sites. Consumers expect to be able to access Websites with searchable help for goods at all price levels (with nearly 50 percent of the respondents indicating this to be a priority). For goods priced between UK 5 and UK 50, the majority of the respondents expected to receive replies to their s within 48 hours. However, these same respondents find it equally important that retailers offer help and support via their Facebook page as well as the ability to chat with agents. For goods priced between UK 51 and UK 250, the majority of the survey respondents indicated that they expect to receive replies to their s within 24 hours. They also expect to have online or phone access to agents. The survey also indicated that as the value of goods increased, respondents were less likely to seek help via retailers Facebook page and more likely to seek that assistance via instant chat. Men are more likely to share their frustrations in consumer forums or online communities. 30 percent of 16- to 24-year-olds have posted negative comments on retailers Facebook pages. Figure 1. Support expectations versus the value of goods A similar picture emerged when consumers were asked what they would be willing to tolerate from retailers. At the very least, for lower-priced goods, respondents indicated they would expect responses within 48 hours or Websites with searchable help. However, the need for retailers to offer instant access to agents increases with the value of the goods. 5

6 This again reinforces that consumers are using a mix of channels during the purchase process, giving rise to a need for contextual support. According to Forrester Research, FAQs related to a product may be appropriate for a lower-margin item. The option of live help interaction may make more sense for higher consideration products. Failing to provide support in context risks forcing consumers away from their intentions possibly to competitors sites. 3 Good and Bad Experiences TOP 5 REASONS FOR BECOMING FRIENDS AND FANS ON FACEBOOK To receive offers (coupons, discounts, and so on) 58 percent To get tips or best practices 27 percent To follow a beloved brand 20 percent To receive service notifications 19 percent To advocate a brand s mission or work 18 percent So what happens when a consumer has a negative online experience with a retailer? And what leads to shopper frustration in the first place? Survey respondents cited the following as the top five reasons behind negative online shopping experiences: Inability to obtain information about delivery charges and/or times before checkout No easy way to ask questions while shopping No fast, simple means for finding product information Unclear return policies Complicated buying processes It s worth noting that although some respondents didn t take further action following negative online shopping experiences, nearly half did airing their frustrations online: The most common way of doing so was via their Facebook or Twitter pages with one in five respondents saying they had done this. Among those who had posted negative comments, 14 percent reported having done so on the retailer s Facebook page. Among the respondents, 7 percent reported having actually joined social media groups opposing a company. The good news for retailers is that a full 60 percent of the online purchasers surveyed reported having had a positive experience with an online retailer one they intended to tell friends and family about. The message here is that British consumers will air their frustrations on a variety of online venues providing a powerful endorsement for integrating social networking sites with wider customer care programs. It also demonstrates the abundant opportunity for fostering positive customer service interactions that build loyalty and satisfaction. 3 Forrester Research, European Online Retail Customer Service Availability Is Still Immature, January 15,

7 QUICK FACTS: RESPONSE EXPECTATIONS FOLLOWING NEGATIVE POSTS 49 percent expected to see a response on the retailer s community/consumer forum. 36 percent expected a Facebook response. 32 percent expected a Twitter response. The New Frontiers in Retail: Mobile, Chat, Social Media The survey also examined the newest channels in online customer service and support revealing a major gap between the way consumers are engaging with retailers and how retailers are engaging with customers. Although more than 25 percent of consumers have used a smartphone to gather information or buy products, only 6 percent of the survey respondents had used a smartphone to obtain customer service or support from a particular retailer. Although mobile adoption levels are still rising, retailers need to develop mobile strategies now to ensure that they can provide customer service in every retail channel. Similarly, 72 percent of the respondents reported that they had not yet initiated a live chat session on a retailer s site even though they expect this resource to be available. Of those respondents who did use chat, the number who went ahead with a purchase was significantly higher than those who had decided against the purchase. And nearly 60 percent of the respondents did not know (or have an opinion on) where chat would be most useful on a retailer s site. In both instances, retailers could do more to make mobile and chat available (and understandable) to potential purchasers. When it comes to social networking sites such as Facebook, Twitter, and community forums, a mixed picture emerges for retailers: Among the respondents who were friends or fans of retailers, 29 percent had communicated with them via Facebook. Among the respondents who had taken action following a negative experience, 66 percent had not been contacted by the retailer despite high expectations for a response. Among the respondents, 75 percent had not attempted to obtain customer service through a social networking site. According to this U.K. study, customers would welcome more social engagement with retailers with 20 percent saying they d be willing to become friends or fans of companies simply because they love their brands. Nonetheless, many retailers are not prepared to set up and provide support to consumers through this medium. Until this situation changes, retailers are missing a major opportunity to foster customer satisfaction and advocacy. 7

8 Conclusion With more and more people going online to shop and consumers engaging with retailers through a variety of purchase points and technologies, retailers need to ensure that they re interacting with consumers via all available media. They also need to provide the contextual support and superior customer experience that keep these customers on their purchase paths. Finally, retailers should reach out to customers via the tools the customers are embracing actively recruiting shoppers with new tools such as mobile, social networking, and chat. Consumers are looking for a closer relationship with their favorite brands, and by listening and interacting with their customers, retailers can do much to build and sustain their loyalty. 8

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