Episode 23: Where retailers are most commonly falling short in CX

In this episode, Amie sits down with Mareile Osthus, CEO and co-founder of Humii

They discuss where retailers are most commonly falling short in CX

Transcript

Amie: Coming up on this episode of Retail Untangled.

Mareile: How can I measure if I'm better? It's not up to me to decide on that, but hundreds and thousands of people out there, if they prefer this retailer, that retailer, if you know the traffic and the amount of orders and so on will slow down your operations will slow down your customer service and so on. Be upfront and again, manage their expectations.

Any decision you take, whether that's in your tech stack or in your overall operations, it might affect your online experience.

Amie: Welcome to Retail Untangled. My name is Amie Larter, and this is the podcast where we speak to retail industry experts and find out business hacks that have helped them succeed. You won't find these gems anywhere else, and we have some stories from the coalface as well as helicopter insights from retail industry leaders. Today I'm joined by Mareile, CEO, and Co-founder of Humii, a platform that essentially X-rays your store's online customer experience. We've recently partnered with the team to launch Australia's first online CX index, powered by real data, and it's certainly been a talking point for the industry ever since.

Welcome, Mareile. What specific gaps in customer experience measurement did you identify that led to the creation of Humii and further down the line, the online index?

Mareile: When I used to work in retail for the Iconic, we used to have the NPS as a North Star. Like that was everyone's metric. Everyone had to drive actions to improve the NPS score, but as a matter. Effect. The NPS score is a very unbiased metric. You just get a, a number thrown at you and then everyone is panicking and say, oh my God, what?

What are we meant to do? So that's what we were really looking at. And Ross would say, we've gotta be better than the competition. But like, I didn't know the NPS score of our competition and. Like, and it's like, well, there, there's no benchmarking for me, so how, how can I measure if I'm better? It's not up to me to decide on that, but hundreds and thousands of people out there if they prefer this retailer, that retailer.

So I guess that was the gap we identified looking at existing customer experience measurements in the market as literally only the NPS score. Now the challenge with the NPS score is. A, there is no benchmarking data. So I know my NPS score, but I don't know anyone else's. And B, it doesn't explain the why behind the performance.

It just gives me a score and then I'm, I'm left alone to figure it out

Amie: Just trying to increase it without any significant guidance as to how. Or

Mareile: And I check money on actions. It probably don't lead to any, you know, increase. Don't worry. It might increase. It might. It might. And then, yeah, thirdly it. The, the NPS score is just polling people who are actual customers. They might have shopped with you already five times, so they, they don't even see anymore what is going wrong.

They're kind of convinced that you, everything's going well. So, and that what really strike me is like the feedback should come from unbiased people going step by step through process. You know, I can look at customer data and ask them, but then it's like, it's kind of, are you afraid of the truth? And that was obviously one of the most important pieces for us for Hume, using unbiased feedback, but then also offering opportunity to ask questions.

You can't ask your customers what would make you abandon the website? Is there anything based on your experience, which would make you never return to this retailer, for example. So that's something you can't ask your customers. Any other metrics out there always come from existing customer data, and that's something we really wanted to change.

Of the people that are on the list, how many times have they been mystery shop? So overall, we have about 1,500 mystery shoppers in Australia. Anyone on the index has been mystery shop for three months. So that's kind of how our data works. Like the scores are basically a 90 days average from the past 90 days.

Mm-Hmm. So if we say we mystery shop them over three months in general, we put out about 10 mystery shops a week. So it's be about a hundred.

Amie: Based on the online CX index data, where are retailers most? Commonly falling short in terms of online customer experience at the moment.

Mareile: Most of the retailers really optimize for conversion. They predominantly look at the website and that's what they kind of consider as customer experience and, and. Many cases, they look a lot at the customer service team. This is. How we provide a great customer experience, but in reality, customer experience is embedded in any single function throughout the whole company.

So if you just, yeah, drive conversion, but don't make sure that the process after checkout is smooth and enjoyable for customers, it doesn't help you at all. Like forcing shoppers through the checkout at any cost won't lead to anything if, if you can't make sure that the journey after that. Is enjoyable.

Amie: So being a little bit too siloed in terms of that transactional sales piece.

Mareile: I reckon it's siloed, but it is also driven by the level of information they have. Obviously it's easier to look at website metrics and convergence and traffic and, and things like that. I feel like it's a little bit unknown of what happens actually. When a customer checks out, then they have probably metrics on kind of how fast they ship, but also that's a bit.

I think a bit dusty in that area, but that lots of issues shoppers encounter after the checkout, they're not even aware of unless someone would probably contact the customer service and say, I had these and these issues, but let's be honest, how many people are doing that?

Amie: It's very reactive as well.

Mareile: It's very reactive. So now naturally they focus on things they think they have a control over, and the rest is just like smoke and mirrors.

Amie: What you've been able to do is really uncover the journey from beginning to end. You guys have, is it 200? Yeah. Touch points.

Mareile: It's up to 200 touch points and going back to the index, we also want to drive awareness of what actually means great customer experience. It's a good reminder that you should not only look at your website, we measure up to 200 data points. We dive a little bit into some metrics in the index, but also we have the opportunity to really celebrate retailers who do an outstanding job and nail every part of the journey.

Amie: Okay, so we've looked at where. Retailers most commonly full, short, but keen to understand what are some common pain points from a consumer's perspective.

Mareile: Very common pain points are, um, any kind of engagement it takes with the retailer to gather information. So it really starts with having FAQs, which explain half of the questions customers have. So now. Naturally, they try to help themselves go through the FAQs, can't find the answer, then they go to the customer service or live chat.

In many cases, they counter kind of a fake life chat, which doesn't manage, and what's the average response time? Is it actually a real person? You get all these articles thrown at you, which probably don't have anything to do with what you actually ask. And that is one of my pet pees actually. Yeah. Lemme just sift through the information myself.

Yeah. And then you get really angry. I didn't ask that. And then it keeps on repeating, I don't want this, I wanna talk to a human now. Yeah.

Amie: Yeah.

Mareile: Oh, maybe try it with this article. Yeah. And then very often, obviously, where is my refund as a very common question. So lots of retailers put on their website three to five business days.

Now it starts with customers are not always aware of when the return has received the warehouse of the retailer, which usually would indicate for them, oh, well, okay, from now on it should take three to five days. And having money in a bank account versus not having the money in a bank account makes a difference.

So then again, they have to contact the retailer and same with, where's my parcel? What's actually going to happen? They exchange products or things like that. So that's a lot of pain points. Just bad expectation management.

Amie: We are moving into. To sort of a peak sales season. You've got a lot of the big sales events coming up as well as you know, Christmas. I would assume that throughout this time, CX would take a backseat to sales and conversions. Not too dissimilar to what we've already mentioned, but on a much larger scale.

How can retailers keep CX front and centre during this busier time?

Mareile: I think first and foremost, I would say it should not fall behind. Imagine that a restaurant is more busy on a Saturday night than they are on a Wednesday afternoon, or it's not like, okay, well we are busy now. We just throw the food on your table and. You know, go and look after yourself. It's not an excuse.

I think, of course, what peak trade does is that there's lots more traffic, but there are also many more opportunities to gain new customers. The most important retailer can do if you know the traffic and the amount of orders and so on will slow down your operations will slow down your customer service and so on.

Be upfront and again, manage their expectations. You know, usually your website would state it takes two to three days to ship to you. Put up a banner and be honest and say, due to peak trade, it might take longer. We have longer response times. From our experience, people don't take it badly if they've been given the opportunity to understand what is going on.

Oh yeah, makes sense. Everyone busy this time, fine. I'll accept that. It takes a bit longer. It comes down to managing expectations. Don't tell them something you can't deliver. And peak trade involves a lot of gifting as well. You need the presents quickly for a Christmas party or God knows what it is, so that makes people really angry.

Amie: When I put my consumer hat on, it seems so simple. There's gonna be in hiccups. Just tell me. Yeah. And I can make an informed decision on whether this is the right thing for me. What we see through a lot of the research, it's not happening. Why is that the case? Are people scared to over communicate? Why do you think that that's such a roadblock

Mareile: Well, I think a couple of things come together. The first thing is probably we'll be fine. We just work through it. We solve the problem once we have it. Mm. You know, that's something you tell yourself sometimes in the startup world, but you shouldn't do that in in, in that specific environment. And then probably just thinking, oh, well they've probably shopped with us before.

They'll be fine. They will accept. That things take longer. You know, not every shopper is aware of all these things. They don't understand the sequence of what it takes to place an order and ship it and so on. Like they don't assume they know everything. And then thirdly, I think it is, they're just like, well, okay, if we tell them it takes a bit longer, we might lose conversions.

But the approach is always like, you know, you get new people on a website, every single person should leave with a good impression. It is super easy to lose a customer if you mess up things. But if you manage the expectation or even say, sorry, we have a lot on things might take a bit longer. People are fine.

Like, don't, you know, blow it up just the first time someone comes to you, because what happens then is you've spent a lot of money on acquiring this.

Amie: And, and I've lost count of how, how many times we've mentioned in this podcast alone, how hard it is to acquire. Yet we are not focusing on that retention piece. That's

Mareile: Probably one of the most overlooked things. We all know that acquisition costs have increased a lot over the last couple of years. Tough. Yeah, it's really tough and people do have a lot of choice. You know, I can buy the same Nike Tides from probably 50 different retailers in Australia. Where do people go back to?

Probably wherever they have the best experience. So that should be always a focus point, like make sure that you impress people by what you can deliver. And it doesn't mean always you have to be best at everything. The minimum thing you can do is be honest and upfront in your communication.

Amie: So let's delve deep. Into the four categories on the CX index, we've got overall experience, delivery, returns, and customer service. So you've sort of allowed us to surface some of that data for people, which has been really exciting. I've seen a lot of commentary on LinkedIn. People are bookmarking this, using it as a really cool resource, which is, which is exciting. Um, if we pinpoint delivery, returns and customer service, 'cause I

Mareile: I think they're the most tangible for now.

Amie: We've identified touch points like. Dispatch. Speed delivery. Speed, communication order, traceability, courier, quality delivery, expectation management under the delivery section.

Mareile: The delivery dimension, we say, yeah, what is,

Amie: Some of the common factors among the top ranked retailers in terms of delivery?

Mareile: What they all have in common is an excellent expectation management. Firstly, they're all very fast. We have a couple of beauty retailers and they, the, the average delivery time probably sits around four days, but like the, the winners are usually half as fast, you know, what's that? Double as fast, you know, how.

Amie: the speed. Yeah.

Mareile: But it starts with the communication. You get a straight communication, your order's placed, then they say your order has been dispatched. Many retailers leave that out so they know, okay, now the parcel is leaving the warehouse. You get a great SMS communication tracking links, which are working. So we get that these comment off when you have, when customer have to copy a tracking link.

Into, for example, Australia Post thing and they're not doing it. And also most of them, they, you know, their walk summer when my pass arriving have their mobile phone. You can't do that, right? So they get accurate tracking links, great communication, really accurate delivery windows. And I always say accurate is the best, even if you want a surprise and be early.

It's not always the best. Because sometimes people schedule to be at home to receive the parcel, so just be accurate. And that also leads me to a point which I always repeat to everyone. It's super important to have authority to leave a checkout that matters so much to people. Because if you can click authority to leave when I'm not home.

It's super important because no one likes to go to the post office. No one wants to see that little card that says, yes, you need your ID and you need to go to the post office between this time and this time. Yeah, it takes so much time. You may as well go to the shop and do it, but like they chose online in that moment for them because it's convenient.

So that's super important. But then also even how the parcel arrives, sometimes little things arrive in a massive over mount. But what is super convenient for them is, is also if you can kind of rip it open without rip the whole parcel apart. And the best thing is if they have like the sticky tape inside.

So you don't have to use your own sticky tape, which probably you just run out of or something, but just make it super easy in case they have to return something. So I guess overall the expectation management and communication is extremely important.

Amie: Mike. It's in a very common theme. I think with what we've discussed today, it seems like natural segue to now focus on returns. I think, and we've had one of the episodes of retail untangled on this. We're all guilty of getting a little bit frustrated when it comes to returns, but I also think it's largely been an overlooked space.

It's not been from a profit perspective either that much of a focus. What does the data show? It's a standout returns experience. And who are some of the best in class examples?

Mareile: It is very important to have a returns portal if people have to wait for returns authorization. Then it's probably not happening that they shop again with you. It's really annoying them, and in many cases, they don't know how long it takes. We've measured these confirmations can take up to six days. Now imagine you wanna return something, you get a return window, and then it takes six days that someone says, yeah, okay, you're good to go.

Then they ask you to add some photos on top and stuff like that. That's just super complicated. So having an easy to use returns portal, which requires two things. Your order number and your email address. That's it. You get to your order, click, wanna return, probably take a reason why you wanna return it.

Then next steps super important. Let people print. They're picture slip at the post office or label? Yeah, the labor at the post office, because not everyone has a printer at home and then they have to do it in an office or at the neighbor's house and so on. It's really annoying and really, I think you're actually identifying my most recent returns experience right now, and I'm still, I'm feeling a little bit triggered.

I know, I, I get that the same. I'm like, okay, I am out. Can't print it at a post office, one print. Never gonna order again. Printer. Yeah. Then as well, tell them. When the parcel basically has arrived at their warehouse, because that's from when they expect their refund being back now, we have really excellent ones in that space.

Bed threats, for example, has a super smooth returns porter, and they're making quite high returns. They're, they're ranking super high. Yeah, I think they're top number one at the moment with three fun experience. But the thing is. They even refund people once they triggered a return. So the parcel has not even arrived at their warehouse, which obviously shows they put a lot of trust in into their shoppers.

But like we got so many comments, people saying, I can't believe this. I already got refunded. My parcel is not even back at their warehouse. So I don't say that has to be the case. But it is a great experience and packaging is reusable. Again, you don't have to roll up your sticky tape and do it yourself.

There's a sticky tape in it. Boom, easy. Go to the post office, beginning to end, beginning to end. It's super easy. Interesting. Bed threads then shape society. Yeah. Seems like. Yeah, and, and for them it works very similar. And then Lululemon has also a great returns process, so. But yeah, just telling people things we've received your order back where you're getting refunded now.

So we had a couple of examples where retailers insisted, well, our refund time is three to five day. That's exactly what we are, we have on our website. And I was saying to them, it's not, we've measured 18 days. And they couldn't believe it and say, yes, that's what we do. So now what happened is when you send back the parcel, it didn't get booked into the warehouse, but booking the parcel or the item back into the warehouse was triggering.

Their returns process. So from that moment on, it was three to five days. But the point is it took them 10 days or something to even To get it into the system. Yeah, getting into the system. So whilst they're looking at their internal statistics saying, yeah, well it's accurate, fabulous. Yeah, that's exactly an they.

They were literally arguing with me. I'm saying, this is just not true. We've had hundreds of people going through this process. This is how long it takes. The customer obviously doesn't know processes like this. Yeah. They only measure from, okay, I've went to the post office today, now I have three to five days, then I wanna have my money back.

So, I mean, that's something you probably don't uncover if you don't have someone really like, Hey, letting you know, jumping into the detail.

Amie: Yeah, and really going through the entire process. And knowing what to look for beginning to end. Interestingly, Aus hair and beauty currently leads the pack when it comes to customer service. Can you paint me a picture as to why and how can retailers really learn from what they're

Mareile: So in customer service, we measure basically pre and post support. That's live chat as well as email function, but also FAQ support function now. Very interesting with them. Commonly, I'd say retailers have FAQs where you have to scroll down, you don't see all the topics at the top. Now, if you look at the Austrian Beauty website, they're basically written from left to right, so in one view you can get to see all the topics, and it makes it super easy to click on the topics.

Navigate. So persists probably. That person is great, and it's similar to go to skincare for example. They all have this format and great layout so you can see the topics. You probably don't have to contact the customer service because people could find it, but then if you do, there are super fast. Now, this is also important with the live chat.

Be upfront. What are your available times when you can respond, like manage again people's expectations. Be upfront of are you talking to a bot or are you talking to a person? So what Ossan Beauty does as well is if they're not available and they clearly state that they still can send you articles and help yourself.

And I mean, let's be honest, they their bots and bots, right? Like their board is really good. We haven't identified pretty much a single question. This bot could not answer. They can answer five questions. Some of them, yeah. So they're really good with that. And then post purchase support. I'd say an average like email response time is about 28 hours.

In Australia, they have less for sending an email, and beauty has less than 20 minutes, and that's surprising because when we send online mystery shoppers through, we send them not always at the same time, can be 10:00 PM at night. So this is actually the shortest response time we've ever measured for a retailer that's really outstanding.

So all in all, firstly, they make sure you don't have to contact the customer service if you have well sorted and well structured FAQs. But if you do, your expectations are managed really well, you feel heard right away. Yeah. As opposed to that reading game. And that's another level of uncertainty. Yep.

Okay. Awesome. Is there anything else you wanna add in terms of the online CX index? Okay. Firstly, we've obviously checked in lots of segments and it's not always exactly comparable beauty versus pet versus electronics, so you know, see it as a guideline. There's always a lot of movement to make sure you go and check it out, because any decision you take, whether that's in your tech stack or in your overall operations, it might.

Affect your online experience, and that's obviously what we see and that's why scores are changing over time. Yeah, I did notice as well, like if you look at delivery and then returns and customer service, there's usually a category close to the top with a little bit of like close competition. Yeah. Yeah.

Why Is it because they know they've gotta keep up with the competitors' experience in that space? Probably, I guess, you know, like. What we got a lot of questions. I'm like, why am I better or worse than my competitor? And that's obviously fair enough. You know, that's what people see as a benchmark. You compare yourself to someone who offers a similar service, similar product, and so on.

Surely DJ would sometimes look at Maya's website and say, what are they doing? And other way around. Right. So I guess there's a natural orientation point. Yeah, and, and possibly, you know, when. When they're great things people talk about, you kind of wanna copy it. Or I think I once posted that Princess Polly had the best rated FAQs.

Now that's the format I was talking about earlier. Now I can actually see more and more people using a very similar format. Yeah. Oh, that's awesome. And in terms of the overall category, yeah. What are you seeing? Currently we have a door beauty ranking at the. Top and that really speaks to their dedication, putting effort into every single bit of their journey.

Obviously, they're predominantly online. They are really nailing every single experience, and that's not just the ones we've spoken about, but it's like making sure that the whole entire end-to-end journey is super smooth, that it's easy to even find the product. Search navigation we haven't really touched on, but that's super easy to find the level of product information, the level of product reviews every single team.

In their organization really works towards goal, and you can obviously see they also have a dedicated team looking after cx. So yeah, congratulations. They're doing an outstanding job and they rank pretty highly across the board. If you look at delivery experience, customer service in times of economic uncertainty, why would, what's the business case here?

Yeah, for CX. Especially when resources are tight. I always think, why does it need to be a business case at all? If you run a restaurant, you don't just chuck spaghetti on a table and then you know, you obviously present the overall experience with that, the atmosphere in the restaurant. Your staff needs to be nice and friendly and maybe funny and so on.

I guess like to cut it very short in order to run it. In like successful business, you need to have great products. And when I say great products, products fulfilling a certain need for certain target group and as well, great experience. If you just sell great products with a shit experience, no one is coming back.

If you sell shit products with a great experience, no one is coming back. You know, it's we. We touched on acquisition costs. They're skyrocketing at the moment, and it's really hard to gain attention, especially in peak trade where everyone gets flooded with edms and offers and so on. That's incredibly hard.

So first and foremost, you should always focus on. Keeping the customers and your existing customers make them happy. And of course, over time, if you wanna grow your business, you need to find new customers. But I think it's common sense that the experience is a huge part of a purchase decision of a shopper.

Amie: It, it should be. It's just, it's, it's almost just a cost of doing business. It needs to be something that sits there permanently and shouldn't really be seen as an investment,

Mareile: It should just be there. It's just really hard. Obviously businesses are really driven in terms of ROI like, you know, you're doing retail. Yeah. Linking a certain action to the, the financial outcome. That can be a little bit hard with online experience, but I guess like even looking. At people returning, coming back, like there's usually a huge share of customers coming once and then you never see them again.

That depends on that share. That is an indication that there was something wrong either about your product or your experience. You don't always get to ask them. Putting yourself into customer's shoes and like really running people through the process, what is going wrong here? That's super essential.

Amie: Thank you Mareile from Humii, and we hope you have enjoyed listening to this episode of Retail Untangled Catch episodes as they land by subscribing wherever you listen to your podcasts. I. Looking to stay ahead of the curve in the retail industry inside retail's got you covered with in-depth coverage of the latest news and insights Inside retail is the go-to source for retail professionals. Stay informed and connected. Read inside retail today.