Digitisation in 2016

Customer support and customer loyalty is changing drastically as we become ever more reliant on the convenience of the web.  Businesses no longer have to staff hundreds of operators on phone lines or wait for customers to send back questionnaires via ‘snail mail’ to gather insight into how their business is performing.  Digitisation of customer support is creating a world where the ‘virtual experience’ is paramount. In this ‘new age of the customer’ consumers can find answers online without having to endure long hold times and they can complete customer satisfaction surveys online without having to be pestered at 6pm just as they were making dinner. In this data-driven culture, we are fast approaching an era where businesses are much more capable of listening to their customers, providing on the spot support and improving their internal processes.

Did you know? The U.K.’s e-commerce market is the strongest in Europe and the third strongest in the world.

According to an IMRG report from February 2015, visits to e-commerce sites via smartphone and tablet devices accounted for 45% of all e-commerce traffic in the UK.

The digitisation of customer support originally came about for two main reasons: data collection and competition.  The internet has brought customers a plethora of options and about a million different places to buy the same item or execute a particular service.  The need to keep customers engaged has vastly graduated from putting out a cute commercial or radio ad; businesses now have to have constant one on one interaction with their clients to keep them interested and engaged with their brands.  Data collection was originally where companies dove head first into digitisation because cost wise it’s much cheaper, and the sheer amount of data that can be collected about consumers’ online, blows in-store data collection out of the water.

The UK retail industry is sacrificing £6.6bn per year due to lack of investment into its mobile offering, according to research by Centre for Retail Research (CRR) and VoucherCodes.co.uk

In the study conducted in January 2015 and consisted of 1,012 consumers in the United States who bought online within the past 12 months, online shoppers were asked how often they shop online. In total, 60% of respondents reported shopping online at least once a month. Nearly one in four of us shop online at least once a week.

Though digitisation has brought about an easier way to create long lasting relationships with clients, the competition in this digital world can be tough.  Getting lost in the mounds of data and advertisements online is incredibly easy for companies who do not take a robust and bold push with their digitisation processes.  Web sites offering products to customers are showing a higher and higher rate of having on the spot chat options, some offering chat without initiation. Customers are more likely to buy a product from websites that engage them digitally than those that don’t because in today’s society, being heard is one of the most important parts of consumerism.

Mobile shopping: not just the youngsters’ prerogative

The use of a smartphone technology for shopping is traditionally considered to be age-specific. It’s no secret that younger people are more likely to use a smartphone for online purchasing. In fact, two-thirds (65%) of consumers in the 18-24 age bracket, both the UK and the US, have purchased via their smartphone. However, the behaviour isn’t limited to millennials only. The older demographic is also becoming increasingly comfortable making mobile purchases via this technology, which for businesses makes providing a smooth mobile experience, an absolute must.

Mobile purchasing across almost all age groups is expected to increase even more. With advancements in smartphone payment technology and retailers streamlining their purchase process, smartphone conversions will become as easy and as natural as the offline shopping experience.

Some have even predicted that with device technology becoming an increasingly crucial part of everyday life, consumers of all age groups will become less reliant on desktops and laptops to make a purchase.

  • 66% retailers consider investment in mobile necessary for successful growth and 88% believe it will bring more customers to their store.
  • 73% of UK shoppers predict they will spend more on mobile this year, and 15% now use mobile as their primary shopping device
  • Almost half of consumers (40%) find the mobile experience could be improved

Many companies are weighing the pros and cons of digitalising their customer service processes. In today’s market, it is almost impossible to increase your profitability without having some sort of automated processes within your customer service strategy. Increased consistency and improved productivity means increased sales, lower operating costs, and improved customer satisfaction. Not to mention the part it plays in winning over dissatisfied customers. It is much easier to reverse their mindset when your company is right there at the touch of a button to handle any issues whereas, in the past, these customers would often sit there and stew waiting for a situation to be fixed. During this period of frustration, these very same customers will be out there telling others about their bad experience; already making up their mind that your business is not worth coming back to.

Goodies Across the Borders

Importing and Exporting goods is big business as we know. In the UK, new research would suggest that 80% of online shoppers would consider buying from a retailer beyond the UK – and 44% have already done so. So what about Exporting? Shoppers worldwide seek British goods, especially cross-border consumers from the USA (21% of cross-border purchases) and China (15%).

Respondents from the UK estimate that on average 30% of cross-border purchases are made via a smartphone or tablet. Despite this fact, only 17% of US Merchants with their own website, offer any kind of mobile optimisation with only 54% having a specific mobile version of their website.

The right payment methods are a deal-breaker for consumers, and different payment methods are preferred by shoppers from different countries. Merchants could increase accessibility by tailoring methods they offer to different markets.

The two main reasons for buying outside the UK are 1. unique merchandise (62%) and 2. More competitive prices (50%).

Other common reasons for cross-border purchasing were safe online payment methods (28%), good quality merchandise (22%), gift-giving (13%) and owning something different from friends and neighbours (12%).

Most retailers were conscious that shipping and a lack of clarity can lead to cart abandonment. However, these same retailers were not so aware that consumers may also have been put off by concerns over website security.

Barriers to Buying from Countries Outside the UK

  • Shipping cost – 62%
  • Hidden cost (e.g. added taxes) – 37%
  • Distrust of online payment methods – 32%
  • Security concerns – 32%
  • No free returns – 31%
  • Long delivery – 31%
  • Not knowing the exact amount to pay (e.g.  bank charges for foreign currency?) – 25%
  • Language barriers, confusing instructions – 23%
  • Having to register personal data with the site – 21%

Amongst the British ‘domestic-only’ online shopping demographic, 6% intend to begin shopping cross-border in the next year. Merchants based outside the UK might see these shoppers as an attractive new market. British retailers, however, need to realise that they are now competing on a global rather than national arena.

Buy Local and Fresh

Nearly 23% of UK digital shoppers bought groceries online at least once in 2015. This number is expected to increase as fulfilment operations get adjusted to this relatively new market. Online grocery sales accounted for almost 12% (or £9 billion) of the total e-commerce market in the country, third only to electronic goods and apparel. The market is predicted to reach total £21 billion by 2020.

In June 2016, Amazon launched a new food delivery service, ‘Amazon Fresh’. This service promises fast delivery, a vast product range and great service. Some of the larger UK supermarkets are already facing pressure from Aldi and Lidl so ‘Amazon Fresh’ will surely only add to this. The online retail giant signed a deal with British supermarket Morrison’s and various local artisans. This service has been up and running in the US for more than 8 years now but it hasn’t been all smooth sailing. It has received mixed reviews: 40% of American customers on the AmazonFresh website granted the service a five-star rating, while 22% gave it just one star – quite the difference. The British launch didn’t go without a glitch either. According to Retail Week magazine, some goods were listed on Amazon.co.uk at ridiculous prices, e.g. four pints of the grocer’s milk listed at £68.75 and five bananas costing £27.99. The imagery was also muddled-up. Apparently, the website was in test mode with customers unable to buy the pricey groceries. Despite potentially causing a bad customer experience, customer criticism will undoubtedly spur Amazon on to greatness, one only needs to be reminded of how much money Amazon initially lost launching their first Kindle. Cut to 2016 and millions of their e-readers are sold weekly.

Whether you are a small company or a huge conglomerate digitisation of customer services is the future. No matter what size or service you offer, you will immediately cut costs and increase profits by being there to collect the needed information on the spot from customers and make their voices heard. Always make sure to set out a sound plan to switch to the digital system for customer service and enlist the help of professionals if your business is multi-faceted.

Looking at your digitising your customer service processes, make sure to take a look at what Logicalware can do for you today! 

Sources – Country Meter, eCommerce News (EU), eMerketer, Forrester, Worldometers, The Telegraph (U.K.). Bronto