In the space of 10 years, smartphones, social media and e-commerce have completely changed the way brands interact with their customers. Consumers have set the bar higher and higher for customer service and user experience, leaving traditional brands (such as high-street retailers) in need of fresh solutions.
From additive manufacturing to last mile delivery, from chatbot-enabled customer service to emotional tracking software, tech startups are allowing incumbents to better meet customer expectations. Below we take a look at four key trends that are driving this evolution and shaping the future of customer-brand relationship.
1.Next level KYC
Before customer access was dependent on strategic shop location, today its on customer data. It’s crucial to be able to manage the weight of consumer data and to extract from this what your consumers want, feel or believe in.
The winners of this change in paradigm are primarily payments players, tech giants (FANG) and multichannel services. While it is increasingly easy to access and leverage data through these parties, it is also a thin tightrope to walk considering new data protection regulation such as GDPR.
The main losers of this shift to data-driven KYC are mainly physical retailers. Indeed it is much harder to collect data in store – but not impossible. Startups such as Two-I, which was highly rated by Early Metrics, are now developing solutions to monitor foot traffic and consumers’ emotions in store, allowing to improve customer service. Again, the use of these types of technology remains controversial, as was evidenced by the recent ban of face recognition in San Francisco.
2. Need for speed
Before you could afford to wait days, even weeks, to respond to a consumer need or request. But consumers have changed and expect everything to happen now, and not later. Chatbots and social media are making it possible to provide speedier and cheaper customer service – with or without human intervention.
Moreover, the time frame from browsing to purchasing and using the product has dramatically shrunk. This phenomenon has been catalysed by e-commerce giants such as Amazon, which have put a lot of pressure on other retailers to match their standard of speed in delivery, payment and customer service.
Last mile delivery is another defining factor in customer satisfaction and a key challenge. It goes to show that customer success goes way beyond marketing and includes all the value chain of a company.
3. Loyalty is king
Acquiring new customers is expensive and it is actually cheaper to retain current customers. Churn rate is, in fact, a crucial KPI for mass market businesses. In this regard, we can argue that the advent of social media is both a blessing and a curse.
Indeed, these platforms reward users for sharing their opinion but also favour extreme statements (of like or dislike) over neutral ones. Unsurprisingly, that is reflected in the reviews that consumers write about products or companies and therefore impacts loyalty.
Therefore it is important to be able to build loyalty and startups can help larger groups give that little extra special service that will make the customer return and leave a positive review online.
Sorry As A Service, for instance, is a startup rated by Early Metrics which allows companies to send physical gifts to customers to make up for a mistake or mishap. One of the largest British telecommunication providers, BT was able to reduce its churn rate and reach 90% customer satisfaction thanks to this service.
- 4. Cookie-cutter won’t cut it
In the past, only luxury allowed personalisation. Nowadays we all expect some form of personalisation of the products and services we buy. We expect to receive promotions for the products we need at the time when we need them the most. Consumers also demand choice in the way their products are distributed to them – next day, on-the-go, at work, in an eco-friendly tote or a fancy leather box…Multi-channel marketing and delivery newcomers are making it possible for retailers to match this demand for personalisation but it remains a segment ripe for opportunities for startups.
Another important factor to note is that fashions evolve ever faster because of the web. We have come to a point where consumer demand changes faster than supply chain can adapt, putting considerable strain on industrial groups. By the time the machines in the production line are changed to cater to a trend, often that trend has already gone out of fashion or will go out in too short a time to make up for the costs.
Personalising B2C products is therefore much more of a manufacturing and logistic challenge than it is a marketing one. In fact, we could argue the digital age has made marketers’ lives much easier as consumers proactively share their likes and dislikes on social media. Matching manufacturing processes to marketing, on the other hand, requires significant time and investment.
Startups can win over traditional retailers as they don’t have to deal with legacy industrial processes and often build their supply chain with the idea of personalisation embedded in their strategy. Moreover, additive manufacturing (such as the rated startup Polymaker) can allow businesses to tailor their products to consumer requests in a faster and cheaper way.
We can conclude that customer expectations for speed, personalisation and support have put increasing strain on traditional retailers and service providers. Startups, therefore, play an essential role in providing new tech for incumbents to meet these expectations, build loyalty and why not even predict future customer behaviour changes.