Amanda Reekie | Founding Director | ovatoyou | mail me |
E-commerce, e-tail or online shopping – whatever you call it, its adoption among South Africans has almost reached ubiquity, sitting steady at 6% of the total retail pie (on and offline purchasing), with 86% of online consumers (49% of which have a household income of less than R10,000.00 per month) reporting that they have purchased online. This is according to the sixth annual South African Customer Experience Report.
Together with Rogerwilco’s CEO Charlie Stewart and CX Professional Julia Ahlfeldt, we have been tracking the impact of Customer Experience (CX) on online shopping since 2018 to better understand what moves the digital needle and how consumers and businesses alike are responding to an ever-changing virtual world, while still getting what they want.
Delivering the wow factor in a winner takes all world
This year we spoke to both consumers (2,000 of them via our survey) and businesses (75 via a separate online survey) and found that businesses face a challenge when playing in the online space.
The nature of the online game is that scale is hard to beat and there tend to be fewer winners, think Google, Amazon and the Meta platforms by way of example. If you combine this with the fact that consumers tend to have smaller repertoires online than they do offline – largely due to the avoidance of multiple delivery fees – it’s clear that smaller e-tailers or even those second in line, have their jobs cut out for them.
There are also those international competitors who are eating our local brands’ lunch. Love or hate them, one cannot underestimate the impact that Chinese brands like Shein and Temu have had on the market. And what Amazon could do too.
Positively, Shein, Temu and the like have been taken to task by South African Revenue Service (SARS) for undercharging on import duties, making them far more competitive than local rivals. But, when their prices increased to what they are meant to be earlier this month, their scale means that even with the additional tariffs they are in many cases less expensive than local retailers and I posit that consumers will continue to buy from them.
This as, in our 2024 Report, Shein was ranked third for the name of a brand that consistently delights customers with a great experience. And Temu, while newish and still small in mentions, was loudly called out for delivering efficiency – and they’re sending goods all the way from China!
Locally, Takealot and Sixty60 are ranked first and second respectively when it comes to delivering the local wow factor in this year’s study and have been game-changers in terms of creating a deep love affair with their customers, who in turn remain loyal.
Consider Sixty60. At its core, it’s a very smart App and a person on a motorbike who delivers goods to customers within the hour. It has been so well executed and become so popular that it’s rare to drive anywhere without seeing a branded bike or two or three zipping past. They are also adding functional features and improvements weekly and appear so entrenched that it feels hard to imagine them losing their lead in this space.
But how did they get there and what does it take for the competition to truly compete with these kinds of local and international examples of excellence?
Difference in opinion – businesses vs consumers
When we asked consumers what makes them buy from the same brands again and again online, reliability trumped all factors with 71% of the sample selecting this as the reason for shopping repeatedly. On the face of it, it is hard to make sense of.
We are after all living through one of the toughest cost of living crises that we have seen in decades. You would expect that price, deals and value would surpass reliability as the key reason for supporting a brand, yet price ranked in second place, at 63%.
I believe the explanation for this lies in understanding what consumers see in the word reliable. It is a ‘suitcase’ concept if you like as it includes every aspect of a brand promise: the overall offer, the value, the promised quality, etc., while delivering on all these factors simultaneously.
Provided consistently, these are the qualities that make a brand ‘reliable’ and it is this that the 2024 consumer cohort want – over the best price.
If only it was that easy to make a brand promise and keep it (it should be)
What businesses believe in terms of why customers buy from them differs from why consumers say the same.
The businesses we polled rated their brand (55%), trusting them (71%) and personalisation (43%) as far more important than consumers did and reported that ‘reliability and price’ were less important than what consumers consider they are.
There is a misalignment between what business offers and what consumers require to keep going back to a particular brand.
While the notion of brands is often mistaken for something soft and fuzzy, at its core a brand remains great because it delivers on its promises and, as this year’s report shows, the promises that are being sought in the current financial environment by consumers link directly back to reliability and value.
Differentiate your CX and brand through moments of delight
CX has gained ground over the past few years, and most larger companies have a CX team or lead in place. But, whilst it used to be enough for CX winners to smooth out the kinks in the customer journey by exceptional navigation, on and offline integration, fast resolution of problems, going the extra mile for their communities and engaging their customer tribes – today, this is not necessarily enough. 32% of businesses surveyed this year said that their organisations spend an equal amount of time addressing pain-points as they do integrating moments of delight into their CX.
Encouragingly, there is a significant increase in businesses this year (19% vs. 2023’s 4%) doing the latter, but the majority, 49%, are still focused on getting the functional experience right and are mostly addressing issues.
Going back to the on-demand grocery sector, even if Pick n Pay can catch the moving target Sixty60, will they be able to beat them at their own game?
Delivering a functionally ubiquitous and uniform experience is not enough as it will only get competitors to where the existing winners currently are. If you are a business trying to catch and beat brands that are consistently reliable, delivering value and innovating their CX, providing the same homogenised “same-same” experience might not be enough to switch them out of an offering that already functionally works well.
Businesses – don’t ignore the delight factor in your customer journeys
Fortunately, there is a small window of opportunity for brands to create an exceptional and delightful CX that goes above and beyond the norm that delivers a little bit of magic, causing the till to ring and consumers to start talking about the brand favourably – as our research shows. But it’s not necessarily easy.
It is easier to sell functional journey improvements than “delight” to most CEOs. But creating delight or providing memorable moments of exceptional CX might be just what is needed to differentiate a second-in-place player provided there are a required minimum level of functional boxes that are ticked. After all a brand’s app must work and the products need to arrive on time, at the very least.
This said, using surprise and delight strategies might just be a secret weapon for those not quite there in the race. In these challenging economic times of high costs and less money in consumers’ pockets, brands must respond to customers’ needs, cut where they can, deliver as promised while offering a good dose of delight.
Related FAQs: Customer experience and loyalty
Q: What is the importance of customer experience in enhancing customer loyalty?
A: Customer experience plays a crucial role in fostering customer loyalty. A great customer experience ensures that customers feel valued and understood, which leads to increased customer satisfaction and a higher likelihood of repeat business. By focusing on understanding customer needs and improving customer interactions at various touchpoints, companies can build lasting relationships with their customers.
Q: How can companies measure customer satisfaction effectively?
A: Companies can measure customer satisfaction by employing various metrics such as customer feedback surveys, Net Promoter Score (NPS) and Customer Satisfaction Score (CSAT). Analytics can help businesses understand customer behaviour and perceptions, allowing them to identify areas for improvement in the overall customer experience.
Q: What role does a contact centre play in improving customer experience?
A: A contact centre is a critical touchpoint for customers, acting as the primary channel for customer interactions. A well-functioning contact centre enhances the customer experience by providing timely and effective support, resolving issues efficiently and ensuring that customers feel heard and valued. Improving the employee experience within contact centres also positively impacts the quality of service delivered.
Q: How can customer feedback be utilised to enhance customer experience?
A: Customer feedback is invaluable for understanding customer needs and pain points. By collecting and analysing customer feedback, companies can gain insights into what customers feel about their products and services. This information can be used to make informed decisions on improving customer experience, thereby driving customer delight and satisfaction.
Q: What strategies can be implemented to create a seamless customer journey?
A: To create a seamless customer journey, companies should focus on integrating their channels and ensuring consistency across all touchpoints. This involves understanding customer behaviour, utilising customer data, and leveraging technology to provide personalised experiences. By mapping the entire customer journey, businesses can identify and optimise key touch-points to meet customer expectations.
Q: How does understanding customer needs contribute to great CX?
A: Understanding customer needs is fundamental to delivering a great customer experience. By gaining insights into what customers expect and desire, companies can tailor their products and services to meet those needs effectively. This customer-centric approach not only enhances satisfaction but also fosters customer loyalty.
Q: What are some common pain points that affect customer experience?
A: Common pain points that can negatively impact customer experience include long wait times, lack of personalised service, unclear communication and difficulty accessing support. By identifying these issues through customer feedback and analytics, businesses can implement strategies to address them, thereby improving overall customer satisfaction.
Q: Why is employee experience important for great customer experience?
A: Employee experience is directly linked to customer experience. When employees feel engaged and satisfied in their roles, they are more likely to deliver exceptional service to customers. Investing in employee training, support and well-being creates a positive environment, which translates to better customer interactions and enhanced customer delight.
Q: How can companies ensure they meet customer expectations?
A: Companies can meet customer expectations by actively engaging with their customers and soliciting their input through surveys and voice of the customer initiatives. Additionally, businesses should continuously monitor market trends and adapt their offerings to stay relevant. This proactive approach helps ensure that customers’ evolving needs and expectations are met effectively.
