CX20
Retail Has a Customer Experience Problem: Discover Retail’s Top CX Gap
Businesses face a challenge—one growing the longer it goes unaddressed—and Retail is no exception.
The change and pressure in Retail is relentless. Customers’ expectations aren’t just evolving. They’re being entirely reshaped with the rise of autonomous stores, the ever-increasing reliance on e-commerce, and the injection of GenAI into all experiences. With each innovative and disruptive service introduced to the market, the benchmarks for customer satisfaction and value completely reset.
As retailers compete to stand out amongst the noise and the competition, one thing is increasingly clear. Experience is the last competitive edge to capturing more market share. Creating branded, connected experiences that both meet the immediate needs of customers and create enduring brand value at every touchpoint presents formidable challenges for retailers. Retail leaders find their organizations at a critical juncture.
To close in on that edge and differentiate through exceptional customer experiences, Retail must start with its Experience Gap.
When we talk about “experience,” it’s important to note that many have varying definitions of what encompasses customer experience. If you’re among those who equate customer experience with just customer service, call centers, and chatbots, then you’re only looking at a small fraction of the full story—and failing to address the full problem.
So, what do we mean when we say “experience” while talking about the Experience Gap?
“Experience is really the sum of all the interactions people have with a brand and business,” says Taylor Standlee, Stellar Elements CMO. “Whether those interactions are positive, neutral, or negative, every one of those touchpoints defines the overall experience perceived.”
“Whether those interactions are positive, neutral, or negative, every one of those touchpoints defines the overall experience perceived.”
The larger Experience Gap can be broken down into twenty distinct categories—or smaller gaps—which fall into five main categories:
Perceptual Gaps
Communication & Engagement Gaps
Operational Gaps
Technological Gaps
Data & Analytics Gaps
More than what you think goes into creating exceptional and innovative experiences, and the challenges faced are unique to each industry. To capture that competitive edge, Retail organizations must uncover their top gap to discover the hidden opportunities for better experiences.
Diving into the CX Gaps
The Stellar Elements CX20 Global Gap Study incorporates extensive qualitative and quantitative research, with 526 business leaders and 2,013 consumers surveyed worldwide, focused on those key CX areas already mentioned above.
Many see gaps as negative things—and they’re certainly challenges you need to address—but what they really are isn’t necessarily bad. Gaps, once revealed, provide hidden opportunities to differentiate your brand and outpace your competitors.
The CX20 Global Gap Study reveals findings that provide actionable strategies for businesses to transform CX challenges into tomorrow's opportunities.
While there are clear global trends, each industry (and each company) faces its own unique gaps. Let’s dive in.
The Top CX Gap for Retail
Retail has faced several shakeups over recent years, and experts don’t see the rapid changes going away any time soon.
“In recent months a shift is underway, with distrust rising as consumers struggling with the cost of living ask questions about the role of big retail, particularly supermarkets, in driving inflation amid publicity of high profits...”
“In recent months a shift is underway, with distrust rising as consumers struggling with the cost of living ask questions about the role of big retail, particularly supermarkets, in driving inflation amid publicity of high profits, growing government scrutiny and media coverage of the sudden departure of Woolworths’ CEO,” according to market research company Roy Morgan. “As a result, careful monitoring of distrust—and managing it—will be critical in 2024.”
This also shows through in Retail’s top CX Gap—the Service Gap.
Identified as a top five gap in eight out of the ten industries analyzed in the CX20 Global Gap Study, the Service Gap is the gap between the high-quality service that customers expect and the actual service they receive. Failing to provide customers with the high-quality service they expect can erode trust, satisfaction, and loyalty. This gap highlights the importance of human interactions in service delivery.
The Service Gap is the gap between the high-quality service that customers expect and the actual service they receive.
Thirty-five percent of business leaders believe this gap is actively widening, and 44% attribute it to inadequate employee staffing or training.
Closing the Service Gap in Retail
As retail leaders aim to address the Service Gap, many turn to technology and automation. The Stellar Elements CX20 Global Gap Study reveals that 85% percent of business leaders admit that Generative AI/Chatbots will be relevant when it comes to addressing the experience gaps in the next 12 months and beyond, and 98% of business leaders also believe that Predictive Analytics will be relevant.
According to recent research from e-commerce service provider Square, 45% of retailers reported greater employee retention and increased profits thanks to investments in automation.
The two industries with the largest AI investments in coming months will be Banking and Retail.
Prediction by International Data Corporation
In fact, the new forecast from the International Data Corporation (IDC) predicts that the two industries with the largest AI investments in coming months will be Banking and Retail.
Business leaders in retail acknowledge that the Service Gap is exacerbated by disconnected customer touchpoints, leading to a disjointed and frustrating customer journey. A channel-less approach for more seamless customer journey orchestration can help Retail bridge the Service Gap.
“Customers don’t think about the channel; they think about their own core emotional need. Channels are merely a convenient way for companies to understand where and how customers are choosing to interact with their brand,” says Ross A. McIntyre, Stellar Elements Principal Innovation Strategist. “To close the Service Gap, companies should shift their mindset to a customer need framework. It’s only by analyzing, understanding, and addressing core emotional needs that brands can adequately serve their customers.”
For Retail in particular, the contextual service experience is crucial in closing that Service Gap.
“Retail needs to shift their focus from the ‘next best sale’ to the best continuous experience. Without contextual service, the handoff from different customer touchpoints is—at best—disjointed. It’s frustrating for customers to have to explain their needs starting over every single time.”
“Brands are resentful when they’re compared to Apple—but it’s the gold standard. Apple understands that people don’t visit stores to decide if they’re going to buy a product—customers decide that before even walking in,” says Rae Gibbs, Stellar Elements Principal Designer. “Instead, Apple’s customers visit stores to feel confident about purchase decisions and to get expert advice and service from employees who are invested in each customer’s experience from purchase through daily use.”
Closing Retail CX Gaps with a Trusted Partner
Retailers aren’t on their own addressing these gaps. This leading retail shipping store turned to Stellar Elements to create a seamless backend experience for each of their stations. Where, before, customers would have to travel to separate terminals within the stores just to complete transactions like print out a resume, buy a Coke, and send out a package in one visit, now each station is built for a more seamless customer experience in-store and online.
Often, it’s not easy to identify your gaps from the inside. And you can’t really fix what you can’t see.
Retail as a whole sees the Service Gap as its biggest challenge, but that may vary between individual brands.
Apple, as mentioned, excels at meeting service challenges—meaning their top gap likely doesn’t fall under the Service Gap. Each brand has its own unique blind spots.
Stellar Elements developed the CX20 Diagnostic Tool to help you identify the gaps in your own organization. Take the self-assessment to see your top five gaps—and how you can close them.
Find Your Gaps
While trends are clear across industries, experience gaps are unique to each individual organization. Uncover your CX gaps (and subsequent hidden opportunities) with the CX20 Diagnostic Tool.
Take the Self-Assessment