CX Expert Talks

Patrick Werdehausen: Steven, as you know, we’re living through extraordinary times. The pandemic has definitely changed our world. It’s taking longer than we expected to get over it. 

At least from Freshworks’ perspective - which I can talk to - we’re used to dealing with a lot of companies that have really high interactions with their customers. For example, the travel and event management industries. They have been badly hit by the pandemic. The retail space is no different. So I picked out a few data points, primarily on the brick and mortar stores out there:

 

 

Patrick Werdehausen: Total sales – if you look at the EU region – has dropped around 4% during the pandemic in 2020. People were in lockdown at home. Physical stores were closed. In general though, it seems as if, even in 2021, the eCommerce market is expected to be really strong. Steven, what are your thoughts on this? How did the pandemic change the landscape of retail for you?

Steven Giuffre: No doubt 2020 was an especially challenging year for retail overall. But despite that, we’ve seen that eCommerce growth really exceeded pre-pandemic expectations. The ability to purchase goods online with the option to have these items picked up or delivered was already growing significantly prior to last year, but the pandemic further accelerated the digital transformation of brick and mortar operations. 

Digital-native disruptors, as well as many large established retailers, were recording unprecedented growth. In fact, we saw double-digit growth worldwide for e-commerce. And Europe has three of the top six markets led by the UK, Germany and France. It’s important to note, however, that because digital transformation was pulled forward to 2020, worldwide ecommerce growth may be slowing down a bit this year. Nonetheless, there is continued consumer enthusiasm for ecommerce. And even with overall decline in retail, we’re seeing online shopping continue to grow as an overall percentage of the retail market.

Patrick Werdehausen: One thing I’ve definitely observed is a lot more people have tried out online shopping. My mom, for example, would never have bought anything online before. Now, not only does she know how to use the technology, but she also feels comfortable using that kind of technology. And that is a big, big shift.

If I were to think about myself, I started buying items that I previously, perhaps, wouldn’t have bought online things that are a lot more expensive. I bought an engagement ring online, for example. I would have never risked doing that online before. So what we’re definitely seeing is that a lot more people are online. One stat that I found was that two-thirds of service leaders expect their contact center volumes to rise even when the stores open again. So there’s a lot more people going online. As this happens, some companies handle it better than others. So some companies, if they don’t increase their workforce and change their setup, they’re going to struggle to offer the same level of customer experience as they did before. And of course, there’s a risk of certain things falling through the cracks.

 

“One observation that the market seems to be seeing as well, customers are flocking to companies who are able to offer reliable service. That’s one of the main reasons they would pick one company over another. “

 

Patrick Werdehausen: You can drill a little deeper into these changes in customer behavior –  tell us a little bit about what you’ve experienced as well.

Steven Giuffre: The expectation is that digital transformation and expansion will continue. As you mentioned, many consumers new to online shopping will continue with online shopping. eCommerce will continue to constitute a larger percentage of overall retail shopping. But as brands continue their digital transformation, consumer expectations are evolving. It’s important to recognize these expectations in order to stand out and provide a differentiated shopping experience. 

For example, today’s customers expect businesses to interact with them on their terms, on any time, on any device, and on any channel – whether it’s text, voice, social apps, or video. Video chat grew dramatically last year. One of the stats in our global customer experience report, which I’ve referenced on this slide here, is that almost four years of growth occurred from January to August of last year:

 

 

Steven Giuffre: Customers also want their interactions to be easy and deliver value. So examples here are: offering self-service through voice and chatbots, but also being able to connect to a live agent for more complex requests. All of this needs to be accomplished in local languages and again, on those channels and devices of choice. 

 

 “Today’s customers expect businesses to interact with them on their terms, on any time, on any device, and on any channel – whether it’s text, voice, social apps, or even video.”

Patrick Werdehausen: People are definitely moving into digital initiatives. A McKinsey study says that nearly all organizations, no matter their size – whether it's big traditional retailers or even small startups – are completely pivoting their business models to be more digital as a result of the pandemic.

 

 

Patrick Werdehausen: It’s only fair to say that companies are investing in different areas:

1) Omni-channel customer service and inventory management tools

2) Contactless payments and warehouse automation

3) Security: People are a lot more knowledgeable about how they deal with their own data, how much data they’re giving companies. And we’ve seen already, unfortunately, data leaks can have a huge effect on branding, if companies don’t invest enough in this area as well. 

4) Cloud infrastructure and cloud-based solutions: Remote working is here to stay. 23% of all employees want to continue working from home. So if you want to retain your best employees, you need to be able to allow that. So that’s where you’re going to see that investment in the cloud that helps employees engage and communicate with each other. But of course they have to communicate in a much better way with their customers as well. 

Maybe you can take us through some of those changes that you’ve been seeing as well from the budget perspective.

Steven Giuffre: Historically, solutions proposed to ecommerce brands, at least in our experience, have centered more around delivering account authentication, verification, shipping and delivery alerts. But as the online shopping experiences become much more immersive to consumers, the focus is expanding to omni-channel, and for a brand to enable the entirety of the customer journey while also adding personalization and context to the experience. So here are some of the key trends that we’ve seen:

 

 

• Mobility is dominating online sales. With consumers constantly on the move, mobile retail revenue is expected to reach nearly 3 trillion euros this year. A strategy that includes integration with social apps or a branded mobile experience with in-app voice or messaging reaches customers, no matter where they’re located. 

• Personalized experiences are becoming the standard among eCommerce customers. By leveraging a shopper’s previous purchase details and searches, additional relevant products can be easily recommended if that history is compiled across channels. 

• Augmented and virtual reality are making online shopping much more interactive, meaning customers can try on products virtually, arrange furniture virtually within their rooms, and much more. Adoption of this technology has been growing dramatically. I saw a stat that the augmented reality market is projected to have 2.4 billion users in the next two years. Now this in particular is a multi-channel use case where a video API can be augmented with additional imagery and data via connectivity to an AI engine - really any AI engine of your choosing - which can then be sent back to the customer’s device all in real time with rich media messaging.

• Voice Search is growing in popularity. Users of mobile devices or in-home natural language devices have become more and more comfortable with voice searches. Voice shopping is expected to grow to 33 Billion Euros by next year, with almost a third of internet users using voice search to look up information or make a purchase. So here, voice APIs with speech recognition connected to a self-service bot can manage your voice-enabled shopping in real-time. 

Patrick Werdehausen: One objection I've always heard from traditional retailers is that they differentiate themselves from other companies out there because they are able to offer a more personal touch. So they’re unsure about investing in bots. They feel that it could make it quite impersonal, perhaps, this interaction they have with their customers. My typical response to that is, “Yes, if you don’t do it correctly”. 

But I’ve seen really cool ways in which different companies use bots, AI, and chat in a connected way to offer an amazing customer journey. One example I can think of is someone who had looked at bots for handling simple repetitive questions, and it works, I guess. But that doesn’t deliver the kind of RoI we’re expecting here. So one project we then did with them was to then look at what their high-volume transactional questions were – where agents are not offering a lot of value apart from just reading information out from their back-end systems to the customer. A very typical question was, “where’s my order?”. It was really easy to automate that with a chatbot. You could even do that proactively to the customer, so he doesn’t have to approach you and ask you about it. And that’s where APIs come into play as well. 

 

“From a company’s perspective, you then have a lot less work, time, and effort invested by your own agents to give the best possible experience to the customer. If a customer doesn’t have to go to the company and ask about their order, and spend 10 minutes of their time asking for updates, that’s a much better experience. That’s just one example of bots improving CX.”

 

Steven, maybe you can take us through some of the different areas where Vonage successfully has implemented things like this. 

Steven Giuffre: Absolutely, Patrick. There are customers that might prefer self-service to quickly get their questions answered. But ultimately, they may require additional information, or their issue may be more complex. As long as there is a connected journey, you’re providing a good experience for the customer. 

Let’s drill down into the e-commerce journey to highlight this. It’s important to acknowledge that this is just a starting point for your brand’s specific use cases and purchasing journeys:

 

 

Steven Giuffre: I’ll start at the top with authentication of accounts. This is important for registration and transactions. This is achieved with a secure two-factor authentication solution. For example, Vonage’s verify APIs are a patented solution that deliver pin codes with a user’s choice of SMS or voice. And then cart abandonment can be mitigated when shopper concerns can be addressed in real time, with solutions such as messaging within your application, or, if preferred, via email. The important thing here is the ability to reach customers via their channel preferences, whether via social messaging or voice. It keeps customers informed of the status of their order. Together Vonage and Freshworks offer a combination of self-service and live support that is multi-channel, including messaging integration with SMS, and popular social apps such as WhatsApp or Facebook Messenger. 

It's also important to note that video has an ever growing role in supporting e-commerce use cases from product demonstrations to see-what-I-see support scenarios. So the message here is that overall, together, we provide real time self-service and live interactions, as well as enabling AI capabilities that further provide greater context of your customer’s needs, intent, and overall satisfaction. So again, the point here is that these are connected journeys, where you can ultimately provide a better experience to your customers.

Patrick Werdehausen: I’d like to provide a live example. Let’s say I’m an online retailer. I sell bicycles. I’ve got a customer who is pretty upset. He’s already plastered all over the social media channels. Then he gets in touch. He says he’s got his bicycle and it’s got a fault. And he wants to return it. He does that via live chat. So there, you could potentially have a chatbot asking him: “What is the query about?” He says he wants to return an item. There. you could have an inbuilt validation process that checks if this really the person who bought the item. 

After that, perhaps you don’t want to just allow him to cancel immediately, rather, offer the ability to chat with an agent first. Pass him on to a live chat agent, who then quickly identifies that it is not necessarily an issue with the bicycle itself, but the way they’ve set it up. Then you could tell the customer that they can return it and you’ll offer them a full refund. But if they’d prefer, they could video chat with an expert who could help them set the bicycle up. So you could seamlessly hand them over from the bot, to the agent, to your technical expert or store employee, who is then on video chat trying to help the customer set up his bicycle. That’s a really cool customer experience. 

Steven Giuffre: This is a great example. This is a continuous conversation with the customer. So you can start with that bot, you ultimately transfer to a live agent, who can tell the customer is upset, and can therefore, bring in a bot for sentiment analysis, as well as bring in a manager if necessary, who can request a transcript of the call to further gauge the customer’s emotions. 

This all can be done in local languages so that a language bot can be brought in. So there’s a lot you can do within a single conversation to truly enrich that interaction with the customer.

1) How long will the changes in retail continue for? And when will things return to normal?

Steven Giuffre: Online retail or e-commerce is here to stay. It now includes new demographics. People are more comfortable with that experience. It’s just going to build from there with some of the technologies that we talked about. That’s not to say that the retail experience overall is going to be forsaken for this. As a matter of fact, I think there’s quite a bit of demand that’s built up now as things bounce back from an economic and social standpoint. You’ll find that brick-and-mortar retail is a destination as well. It’s a matter of giving customers choices in how they interact, the immediacy, and the personalization that can be had from e-commerce, but also that experience of being in a retail store. Ultimately, you’re giving customers flexibility in terms of how they interact. And in the long run, those are net gains.

Patrick Werdehausen: With the data that we showed, there’s a projected 30% increase in e-commerce sales expected for 2021. As more people learn how to buy online, they want to stay online because they have great experiences. Companies are getting better equipped to manage those new expectations as well. 

 

2) For someone who’s got a very small team, just a few agents in customer support, would it be worth it from an ROI perspective to invest in this kind of technology? 

Patrick Werdehausen: It depends on your business model and the RoI you expect from it. If you have really high volumes of simplistic L1 questions coming in, that’s something a chatbot, which is in deflection mode, can help with, and generate quick RoI. So there are companies for whom it costs 50 cents per resolution, if handled by a bot. If your cost per interaction is 4~5 Euros, then that makes it quite attractive as an investment. Otherwise, if you’re a little lower in volume, you have more complex solutions, and other costs to also take into account, it’s probably quite expensive, and if you can reduce that by offering better adoption of your products, better overall conversion rates as well, you can convert more people on your website the first time around. And that can lead to RoI.

Steven Giuffre: And I completely agree with that, Patrick. And I do think that it goes back to my answer to the first question in terms of the business challenges that you want to solve, as well as the volumes that you’re incurring in terms of shopper interactions and support calls. Ultimately, it could be a chatbot or a video chat application that might be right here. You may want to add things like an IVR as well to address common questions. So again, these are solutions that can be built upon.