Retail & customer experience

Customer experience in retail, is the overall journey of the consumer from the moment he or she sees your store to the moment he/she leaves. Due to the prevalence of social media and e-commerce, this journey now includes your website, reviews left on the internet by your previous consumers and online customer service experience.

According to a recent Price Waterhouse Cooper study, 73% of shoppers said retail customer experience is more important to them than price, or quality. Not only did they value positive customer experience, but they found that it influenced their decision on where and what to shop more than advertising did. More than 40% were even willing to pay more for a better customer experience.

No wonder retailers are paying attention to customer experience and there are several start-ups in this space.

Historically retail execution in FMCG (which we’ve covered in previous blogs starting with retail execution, continuing to the first and most important P, Product and ending with Proposition) ensured great customer experience in store. These days, while this still generally holds true, there are more elements that influence customer experience.

So how can you improve customer experience?

Your customer experience strategy should be based on your customer’s journey from when they arrive at one of your stores all the way through to post-purchase. Are there opportunities to interact with your products and services? Is your store inclusive and accessible? How customer friendly is your customer service team and the customer service process? What is the online experience of your store/e-commerce site like for your consumer?

Contactless as well as range customisation for location are key aspects for retail customer experience these days. Ever noticed that the range in each Zara store you step into is different from the rest? By analysing the products most relevant for each store location and stocking products that customers seemingly want at a local level, you can dramatically optimise operational efficiency, reduce returns and increase sales. Now, more retailers are following the trend Zara has set including Sephora and H & M. By customising assortment for each location, retailers can boost brand loyalty and provide a streamlined & relevant customer experience.

Social responsibility & Convenience

These days, supermarkets (ASDA, ALDI, Morrisons, M & S Food, Waitrose) and convenience chains (notably, SPAR with their Eat 17 collaboration) with stores that have packaging free aisles, have also seen an increase in new customers. And now with the increase in prices of day to day groceries, packaging free options may prove to be more affordable than packaged versions due to lower price increases and so may appeal to larger groups of people than just eco-conscious consumers.

Location (for quick impromptu visits), fast delivery and timing of delivery slots have been key drivers of convenience, which has emerged as a very important element of customer experience post pandemic.

Timing of delivery and availability of delivery slots is one of the key reasons Walmart is partnering with Drone Up to deliver grocery orders to parts of Arizona, Arkansas, Florida, Texas, Utah and Virginia.

Social & live sales in e-commerce and in store

Another emerging trend is live shopping. An increasing number of retailers are looking at implementing live shopping solutions on their e-commerce sites. We have now come full circle from door to door salespeople selling FMCG brands to self serve supermarkets and now back to sales people presenting their brands and SKUs online for sales. Not only are several retailers developing homegrown solutions for this, but they are also partnering with start-ups like Shoply and Vurdere.

There are several FMCG companies that have partnered with retailers to display their marketing/sales content on screens below/next to the shelves with their SKUs taking online sales/marketing content to its logical conclusion. For example, Muller partnered with ASDA to display their marketing content on screens close by/below the shelves displaying their products.

There are several CX initiatives by supermarkets that we haven’t covered in this blog. These are simply a few that stood out. If there are any supermarkets or convenience stores in particular that have grabbed your attention with their CX initiatives, please email me with details at veena@salesbeat.co so we can include them in another blog or cover them in our podcast.

The changing world of customer experience in FMCG

Forrester Research defines customer experience as “how customers perceive their interactions with your company.”
Customer experience in FMCG starts with how customers become aware of a brand/company and ends with any interactions with the company’s team for returns, damaged products etc. This includes any activities the brand team or company may undertake to increase awareness and encourage intent to buy. Eg: sampling campaigns, surveys, free product, in-store promotions etc.

Customer centricity aka customer experience aka CX is becoming an increasingly important business KPI in FMCG companies and retailers.

Why is CX becoming increasingly important in FMCG?

When customers (consumers) have positive experiences while interacting with a brand, they tell others about their experience. They do this through reviews on retailer/brand websites or on their social media accounts. This is free word-of-mouth advertising for the brand. Positive customer experience can also encourage brand loyalty and repeat purchases. 

But how do you improve CX if you don’t sell to the end consumer?

This is the case for many FMCG companies that sell their brands through distributors, supermarkets & convenience stores. For these companies, retail execution is key to unlocking superior customer experience. They employ various strategies including ‘shop in shop’ concepts, interactive brand discovery on screens, samplings/tastings, product experiences and brand videos. In-store brand ambassadors (sales people) who are knowledgeable about the brand who consumers can talk to and learn more about the range are extremely effective. Brand ambassadors can not only sell effectively to consumers, but they can also act on/pass on to relevant brand teams any feedback the consumer gives.

However, the pandemic has accelerated change in how consumers/shoppers buy and experience brands. Previously, it was important to have a great brand website and an e-commerce portal. Now it is vital that consumers are able to access the brands without travelling to a store.

A few recent CX stratagems employed by brands

Below are a few examples of superior CX which have generated considerable interest from consumers and have translated to sales in these challenging times.

‘Lumi’ by Pampers:

The Pampers team came up with Lumi as a way to address the plentiful worries a new parent has. The goal wasn’t just to sell Pampers. They understood the worries that new parents have about their baby’s sleep routine and created an app that acts as more than a baby monitor. Lumi monitors their baby’s sleep patters, tracks diaper wetness to alert parents and provides actionable insights on how to sleep train their baby. Lumi is all about the baby and providing the baby’s parents with peace of mind.

By making the baby’s comfort and development the core of the Lumi app/monitor, Pampers has delivered a truly superior customer experience that will encourage new parents to buy Pampers diapers. The ones that work with Lumi are only 4 cents more expensive per diaper than regular ones.

To top this all off, the Pampers website is all about expecting mothers and the baby. While there is a section on ‘products’ that lists the Pampers range, most of the website is about the various stages of pregnancy, and about babies and their development. You cannot get more customer centric than that!

Heineken Silver in the Metaverse later launched in real life

Brewed with pixels, Heineken Silver is the world’s first virtual beer. Heineken launched its ‘digital’ beer inside the company’s virtual brewery. According to the company, the beer is made of the finest, 100% computer-generated ingredients, brewed with Binary Coded Hops grown by NPC (non-player character) farmers.

Heineken partnered with self-taught street artist, J. Demsky to design parts of the virtual brewery. According to several attendees, the launch event was (intentionally) bizarre, later confirmed by Heineken.

Bram Westenbrink (from Heineken) said, “We know that the metaverse brings people together in a light-hearted and immersive way but it’s just not the best place to taste a new beer.

Our new virtual beer is an ironic joke. It is a self-aware idea that pokes fun at us and many other brands that are jumping into the metaverse with products that are best enjoyed in the real world.”

In an ironic twist, Heineken took Heineken Silver from the Metaverse and launched it in real life last month.Taking this further, Heineken unveiled a series of FRTs – For Real Tokens – collective art pieces by Spanish artist, J. Demsky, poking fun at the NFT culture during the launch event.

Heineken was not afraid to poke fun at themselves with the launch of Heineken Silver in the Metaverse. By sharing this experience with their loyal consumers and providing an unforgettable experience for new to Heineken consumers, the brand built strong rapport with their consumers.

Launching Heineken Silver in real life showed they listen to their consumers and is a key element of CX.

AB Inbev’s digital horses and their vision of Metaverse beer which can be delivered in real life

AB InBev moved into the virtual Ethereum based game horse racing platform Zed Run. According to Lindsey McInerney, “brands should parallel in the metaverse what they do in reality”. 

With its history of sport sponsoring, especially horse racing, AB InBev was eager to be among the first to start one in the metaverse. They moved into the virtual Ethereal based horse racing (game) platform by an Australian start-up. The virtual horses on Zed Run are ‘breathing non-fungible tokens’. While users are able to name their horses, how their horses behave on the track is defined by algorithms based on characteristics such as their bloodlines, just like in real life.

According to Adformatie, Stella Artois created a set of unique horse breeds for Zed Run, with Stella Artois-themed skins and a 3D racetrack. According to Forbes, these unique horses were sold for millions of dollars for the digital races.

This creates an entirely unique customer experience for the target consumers for Stella Artois and Budweiser. They have created a new of way of reaching their target consumer and providing them with an unforgettable brand experience.

According to McInerney, the vision is to some day have people from different parts of the world attend the races together, buy a round of beer at the races and have them be delivered in real life, so friends can virtually attend an event and have a drink both virtually and in real life.

By creating new ways for people to get together and bond, AB Inbev is providing its existing consumers with an unforgettable experience that they are unlikely to forget. Also, they have created an innovative channel to reach their target consumer and encourages trial.

There are several other brands leveraging technology to create unique customer experiences. If there are any brands in particular that have grabbed your attention, please email me with details at veena@salesbeat.co so we can include them in another blog or cover them in our podcast. The next Salesbeat blog will look at how retailers are leveraging technology for superior customer experience.

A timely example of VUCA

A ~1min video on how to sell more effectively in these times

This week started off hot for those of us in the UK, for March that is. Monday temperatures reached 22degrees and Tuesday was the warmest day in March that UK has seen in 53 years (Sky News) at 24 degrees.

Would you have expected this for March in the UK?

As weather influences beverage sales quite significantly, I decided to check out a few supermarkets on Monday to see how they were doing. Monday was also the day lockdowns eased.

I saw more people at the beer & wine section in the supermarket than I have seen in a while now! When asked about whether they were buying for Easter or for immediate consumption, all of them said that they were buying for immediate consumption. Some of them were going to the park, so they had some fruit and snacks as well and a few were buying for dinner on their patio at home.

Rosés and White wines are already going out of stock/out of stock in the chilled section

As you can see, brands and products were already starting to go out of stock and some already were. Tuesday was also a warm day and we expect that availability of brands would have decreased even more by end of day Tuesday. The manager of a wine store that I walked into, said that she sold more White wines, Rose wines & Sparkling wine/Champagne on a Monday than ever before.

We expect quite a few brands and products would have gone out of stock by end of day Tuesday and there was quite a bit of revenue ‘left on the table’.

This is a classic example of VUCA, when demand for Beer, Wines, Water, non-alcoholic beverages & ready to drink beverages increased significantly when compared to March in previous years.

Applying the framework we described in our previous blog, sales teams for FMCG companies should be monitoring weather forecasts and playing close attention to variances from ‘normal’ weather for the month so they can adjust sales volumes accordingly.

In the absence of a sales prediction model, optimal volume levels will be a matter of trial and error. But paying attention to these fluctuations would go a long way toward preventing the significant loss of sales we see now.

If you’d like to discuss how a sales prediction model can help or understand what factors influence each FMCG category, feel free to email me on veena@salesbeat.co

Top reasons why Food & beverage start-ups and NPDs fail (continued)

So last week we spoke about what could go wrong with new product launches and we are continuing that theme this week. You’d be surprised how many things can trip you up close to launch date, after launch or even well after launch.

  1. Bad customer experiences: Your customer has been very specific about the configuration of the cases and pallets of your brand. But unfortunately, your manufacturer has not heeded instructions and delivered your first order the way they have always done things, which is quite at odds with your customer requirements. They do this a second time. They get this sorted out the third time, but by then your customer has made a note of this. The next time something goes wrong, they delist you. 
  1. Bad consumer experiences: Your first two weeks of launch have gone great. Your brand has been flying off the shelves. You know the third week may not be great, as your first two weeks have gone splendidly. Your fourth week should go well. But it doesn’t. Your sales drops. Your fifth week sees almost no sales and in the sixth week, the category manager tells you that unless your sales rebound, they are considering delisting your brand in favour of a competitors. So what went wrong? Your brand obviously fills a gap, but consumers just did not come back to buy more. It became difficult to drive trial too. Did you look at whether you were getting bad word of mouth? Did you get feedback from any of your consumers from the first two week? Anything can go viral these days and all you need is one or two people who dislike the product to start a social media campaign. Maybe someone got a bad batch or just did not like the taste.
  1. Weather and seasonality: ‘The weather, really?’ you are thinking. Yes, the weather and the season play a very important role in the success of seasonal or weather dependent foods. For example, the best time to launch an ice-cream or frozen dessert brand is during the summer, when your consumers will be open to trying new brands and products. During winter, if a consumer is buying ice cream, he/she already has a favourite and she/he’ll go for that brand/flavour. The same goes for beer in winter and mulled wine, mince pies and winter soups in wummer. Any of you who launched your ice cream brand during unseasonably cold summers will know what I am talking about!

Top reasons why Food & beverage start-ups and NPDs fail

So the stars have aligned and you are ready to launch that new food brand that you’ve been developing for the last 6 months. You have the funding, you have found the right manufacturer with the right licenses and you have a national listing. What could possibly go wrong?

Congratulations, you have a national listing!
  1. Consumers don’t want it: Now you are thinking about the sampling sessions you/your agency held when everyone loved your product and brand. Well, it turns out that unless the product is that bad, your sample group will tell you what you want to hear. After all, you are paying them to be part of the group and they feel obligated to give you the answers you want to hear. Consider speaking to random people at your corner grocers outside of their stores to get honest feedback about your product. Or speak to your kids, they’ll be honest!
  1. Cultural nuances: Brand names, packaging and the right ingredients are so critical to the success of your food product. They can make or break your brand if not done right. Did you get enough feedback from your target consumers in the target market? Did you check whether the ingredients raise any red flags for your consumer group? What about the brand name? Does your brand name mean anything different to your target consumers than to you? More on this subject in a later post.
  1. Pricing is all wrong for the customer segment: Your brand/product is targeting a very specific segment of consumers. It could either be too expensive for the consumer to buy or too cheap for the target segment. Keep in mind that for certain products, price also acts as a signal for quality. So when you work up the pricing, take into account what your consumers should be paying for it. Do your homework and look into what competition is doing and what similar products or even complementary products are priced at for those consumer segments. Then work back the numbers to your selling price to the customer, taking into account retailer/customer margin, warehousing costs, logistics costs and any additional costs the retailer/customer needs to bear. 

Stay tuned for more next week!