Digital disruption is a hot topic and is high on the corporate agenda right now. Almost half of global business leaders are concerned by the level of digital disruption in their sector according to a new report produced by the technology company Fujitsu. Technology continues to evolve rapidly and if the change is radical enough it can alter businesses and potentially entire industries.
Each customer interaction is unique, with analytics being the backbone of the experience, creating millions of personalised journeys based on individual needs. Because the new interactions are analytics-powered rather than hard-coded, they can be much more agile and responsive to change. Our managing recruitment consultant Nicola, who specialises in marketing analytics and insight explores three main ways digital has affected customer experience.
1. Loyalty Apps
When someone refers to a loyalty scheme, the thought that springs to mind usually is points on an instore account or stamps on a coffee card. According to Investopedia, ‘a loyalty scheme is a rewards program offered to customers who frequently make a purchase.’ Since 2017, the word loyalty has been taken much further than it ever has been before.
Customers choose to be loyal because of the psychological connection to the brand, the rewards gained and the free items received in return. There is no doubt that these schemes increase sales and create repeat customers but could loyalty go further? Howard Schneider, Senior Consultant for Kobie Marketing said “savvy and strategic companies are now looking beyond these rewards programs to delight, create and retain loyal customers. They are looking to solve customers’ problems and soothe pain points.” He suggests that smart companies are investing in new ways to take their loyalty to the next level, some businesses are doing this by providing an app for their customers’ smartphones.
For example, Starbucks is one of many businesses that has developed an app based loyalty model. You can use your Starbucks app (the digital version of the reward card) to make a purchase and to earn stars so that you can gain exclusive rewards such as free drinks and more. Some individuals may argue that there are a few issues with this; what if your battery dies and you cannot pay for your purchase with the money preloaded onto the app? Does the customer really want to go in store and pay for a coffee without guaranteeing a star on the spot? Does this scenario drive people to competitors like Café Nero who still use a reward card and stamps?
Schneider describes apps like Starbucks as lifestyle apps which are created to enhance your experience of the purchasing process. In addition to gaining stars/points, customers can actually pre-order their drinks for a certain time. Do these types of apps sway a customer to remain loyal to them due to the ease of use and benefits? The flexibility provided is clearly appealing as it allows customers to be organised by pre-planning and making the most of the app. It’s likely that more people would prefer to use and redeem free rewards from the app rather than go to a competitor.
E-receipts are the latest method of how you receive your proof of purchase when shopping instore. This is becoming more prevalent across high street retailers like Topshop, New Look and Gap, where you provide an email address and receive your receipt via email. You are then emailed personalised and targeted campaigns with similar products to which you have purchased. Emails are a valuable commodity and this can be beneficial to a lot of customers but so many still view this as ‘spam.’
The benefits of e-receipts are clear in preserving the environment as it is paperless and the fact you can’t physically lose the email receipt or accidentally put it in the wash. However, there have been many situations noted online via The Guardian newspaper, where people have requested a paper copy of their receipt and arguments have been unavoidable with the shop assistants due to the hassle of having to move to another till to physically print it out. But what if you don’t have an email address or if you simply don’t want to give that personal information out?
These e-receipts mean stores can gather your shopping history, both online and offline. The single customer view that is a priority in many businesses is being taken even further and allowing the customer analytics teams to collect additional customer information to analyse. Because of this it is becoming a lot easier to analyse customer behaviour and trends through the multi-channels ensuring more personalised campaigns.
A major concern customers are facing is they may not realise what companies are obtaining their email address and details for. Whether it is for marketing purposes or potentially sharing it with third parties. People need to know why companies are collecting this personal information and how they are using it.
“Retailers are trying to move to a long-term relationship with customers because loyalty as we once thought of it is pretty much dead.” – Colin Strong, Head of behavioural Science at Ipsos
3. Home Dining
Traditionally people would go to their favourite restaurants and enjoy a meal out but digital disruption has changed the way in which we treat the restaurant trade. A new trend has been created - eating in is becoming the new eating out. We have started to use our most favourite places as takeaways, there has been a substantial increase in restaurants using app-based delivery companies such as Deliveroo and UberEATS to stay ahead of the game. Delivery is becoming much more than a simple add-on as there are signs that restaurateurs are tapping into the delivery trend. In 2016, restaurant group Clockjack Chicken opened a delivery-only kitchen that solely offers food in London through Deliveroo orders. Co-founder Jerry Goldberg said he saw the food delivery market start to take off in 2013 and Clockjack was one of the first restaurants to sign up to Deliveroo, with orders being taken from its restaurant based in Soho. This then led to the opening of their delivery-only branch. Mr Goldberg stated that there were many benefits such as a relief of pressure at their Soho kitchen, no flurry of drivers passing through the restaurant and a saving in expenditures. He said “The property costs for a kitchen are significantly lower than a restaurant as you don’t have to have a prime location for a delivery site.”
“Ordering ready-to-eat food for delivery via an app or by phone is growing so fast that eating in is becoming the new eating out. It goes beyond getting delivery of conventional takeaway food because full-service restaurants are offering delivery too.” - Cyril Lavenant, NPD’s UK food service director
The question is will they eventually kill off full-service restaurants? “It’s not surprising delivery companies are doing well, as there is demand, but I’ll eat my hat if deliveries outstrip restaurants.” – David Moore, successful restauranteur best known for the Michelin-starred London site Pied à Terre. According to analysts NPD Group, the delivery sector rose almost 10% (599 million in the UK), while the total number of restaurant and other dining venue visits rose only by 1%. Dining out is not always the better option especially today where it’s common to queue at no-reservation venues, tipping, dress codes and other things that may be considered nuisances of eating out.
Last year the delivery channel was worth 3.6bn, a 6% increase from 2015. Mr Goldberg agrees that the thriving success of the delivery market suggests some in-depth questions about the future of the restaurant industry. He said “this is critical for the whole restaurant market and could have huge implications.”
The results of further digital disruption may be unpredictable and overwhelming but it’s also powerful, motivating and unavoidable. As a result of this there are multiple concerns: will e-receipts put people off shopping in store? Is this an opening for analytics teams to build up their customer movements due to the massive move to online shopping? Will restaurants harness the appeal of home dining by implementing smart tactics to ensure the restaurant experience is still desired? The organisations such as Deliveroo and Just Eat have direct access to personalised buying trends in a way restaurants can only dream of. Therefore, the app market has a significant advantage when creating its vision of customers and targeting its campaigns.