The overlapping characteristics of the retail customer across industries are obvious. This is the age of the mobile first generation, the omni-channel shopper, and the tech savvy, empowered consumer.
Banking and healthcare customers have a lot of things in common with the retail customer – they want convenience, they want choice, they want good experiences – that industry leaders are continually exploring ways to get a bigger share of wallet from their customers.
But there is something more to these empowered consumers than their mobile devices, said Marc DeCastro, Research Director at IDC Financial Insights at a recent webinar.
The reality, he said, is that there is clearly a channel overload even in the financial services sector. Most banks, for example, offer channels to customers that are really robust and require extensive investment and hardware and software support: mobile, online, branch, ATM, tablet, call center and more are in the pipeline. And this is coming into play in an era of flat budgets, doing more with less, and striving for efficiency ratios.
It is also a reality, added Lynne Dunbrack, Research Vice President, IDC Health Insights, that data coming out from IDC’s Consumer Scope 360 shows that of the free smartphone applications offered worldwide, uptake on games (65 percent), social (57 percent), weather (48 percent) and music (45 percent) are higher than shopping (34 percent), health and fitness (28 percent), finance and money (27 percent).
"Of the 100 applications downloaded by users, only 4 will be in use after one year," Dunbrack said, adding that these would most likely be Candy Crush, Angry Birds, Facebook, Instagram and Spotify.
This makes it even harder for retailers to get that desired share of wallet, especially in line with the continuous flood of technology solutions and creative innovations dangled as a carrot stick for the customer in the name of convenience, choice, and control.
In the retail industry, Leslie Hand, Research Director, IDC Retail Insights, said Omni-channel has been a topic of interest for the past five years.
"There is no doubt in our minds that there is general acceptance across industries of the omni-channel customer, but a key thing to remember is that it’s not that the customer knows they are omni-channel, they just want to shop (or to avail of a service in the case of banking and healthcare customers).
Fortunately, Hand said there is also more room for collaborations across industries for the sharing of common experiences in dealing with today’s consumers. In an IDC web conference, entitled "New consumer expectations and impute on banking, healthcare and retail," the three IDC executives shared at least four new ways to woo the retail customer.
#1 View profitability from a customer level, not from a product level
"Most organizations recognize that they must be in front of the customer wherever the customer is – online, social, mobile or physical. That message must be delivered," De Castro said.
This includes mapping out the customer’s current needs and provide an individualized roadmap to maintain growth in the relationship.
"Identify the use cases for each customer and focus on the profitability of the customer, and not the profitability of the product line," he emphasized.
In the banking industry, he said a student may currently need checking, savings account, maybe a debit card or student loan. But as he moves on in life, he may need more access to credit, facility for bill payment, mortgage or even more advanced mobile services.
"The thrust of the organization must be on collecting the correct information, providing the appropriate offer to this individual’s future needs, not just their current or past needs," he said.
Even in the healthcare industry, Dunbrack said they are seeing more execution of multi-channel and multi-platform interactions, particularly as healthcare moves into a retail model.
"We are putting greater pressure now on consumers’ decisions on the type of products they buy and how they consume health," she said.
Consumers’ expectations are actually similar across industries; they want to be remembered or recognized, they want their needs to be understood and to know that the organization cares about them or are willing to collaborate. DeCastro said a targeted marketing campaign on where the customers want to be and on the device they chose is critical in a financial institution.
However, even in healthcare Dunbrack said mobile and social are not necessarily for transactions but a means for consumers to reach out to patients like themselves or other consumers facing similar situations to learn from others.
The customer engagement model in healthcare likewise seeks to deliver the right information, target the right customers, and encourage greater responsiveness, improving customer experience, among others.
"They all have a set of expectations," agreed Hand. "They all want to have access to information – finding the right products at the right price. So what we see as critical include automating the business process, the importance of data and providing consumer convenience.
# Strive to know the customer, but respect privacy
Much has been discussed about the dangers of encroaching into consumers’ privacy as retailers strive to get to know their customers better and to offer more personalized offers or services. However, Hand disclosed that there are actually more consumers today willing to give up personal information if there is something in it for them.
"We did a survey these past holidays that demonstrate how consumers fall into multiple camps – those who are very willing to give up privacy to get a better service or to get a better offer and those that are still very concerned about privacy and security of data," she said. "What we see on a year-to-year basis from 2012 to 2013, the number of privacy willing to give up their privacy doubled.
This, however, means that retailers or organizations must still use caution where privacy is concerned.
"There are great ways to be in synch with the customers’ needs and the tools are available today – being able to utilize big data faster and more efficiently to come up with targeted offers to feel customers feel like winners. A financial institution needs to focus on standing out from the competition, be it in the face of competition yet there must be tack in regard to their privacy," DeCastro emphasized.
# Focus on the last best experience
The proliferation of devices used for shopping in payments is certainly one of the huge impacts of technology on the shopping experience. And everywhere, innovation continues to grow and retailers will be constantly looking at ways to find technologies that are agile and resilient.
Hand said most retailers do not – and should not – look at technology innovation as a one-time project, but rather as a continuing journey to continue to help meet consumers expectations. And as they innovate more and invest more, she said retailers must also focus on what she calls the "last best experience."
"Consumers have an expectation that is set by their last best experience – terrific experiences with integrated capabilities that spanned e-commerce, mobile commerce and physical store commerce. When shoppers get the experience of great service from the stores that resulted in them finding what they need and getting the deal that they thought that they expected, then that sets the bar for experiences to look at from other retailers," she said.
This is fairly consistent with retailers’ push to innovate more.
"The bottom line is technology has fundamentally changed the way consumers want to shop, which forces retailers to take a hard look into what the customers really expect and how they expect to serve in five, 10 or 15 years." Hand concluded.
Taking Stock is Retail in Asia’s fortnightly column dedicated to showcasing opinions from experts in the retail industry.