Retail struggling to keep up with the modern consumer

For Kantar TNS

Research released by Kantar today shows a gulf between the perceived customer experience delivered by businesses with slick online experiences and traditional retailers.

Customers say businesses that are purely online (such as Spotify and Mighty Ape) or that are increasingly digitally focused (such as banks and travel agencies) are delivering the best all round experiences. At the other end of the scale, liquor and fuel retailers are performing worst of the sectors considered.

Kantar executive director Nigel Green says while the personal touch is often thought to be an advantage of retail, in practice it is being left behind by technology that is increasingly able to delight customers. “We’ve found that online chat and apps are up to twice as likely to deliver an ‘enchanting’ customer experience that is both effective and emotionally engaging (20% vs 10%),” says Mr Green.

“We see these findings as opening the door to an acceleration in the use of technology in retail. Customers are likely to embrace rather than be put off by in-store technology. However, a human face will remain essential and we see the most successful future retailers being those that free up employees from routine tasks to provide a greater level of assistance to customers.”

New Zealand companies chasing global giants in customer experience

Spotify topped the study of brands for providing all-round excellence in customer experience, with several New Zealand brands hard on its heels. Spotify achieved a score of 66 on Kantar’s index of customer experience, edging out Air New Zealand (64), Flight Centre (62), House of Travel and Mighty Ape (60, 4th=).

The highly placed travel businesses have developed business models that allow them to thrive despite the challenge posed by online-only ticket buying sites.

A key to their success is providing the digital tools for customers to easily do things for themselves while allowing staff to focus on tasks requiring a personal touch.

Flight Centre and House of Travel took out the top two spots in employee empowerment, one of five key drivers of customer experience success.

Netflix came in 10th place, with Southern Cross, Kiwibank, AA Insurance and ASB all edging ahead of the media giant.

“It is no secret Air New Zealand is a leader in customer experience, but we should also shine a light on the other New Zealand brands in the top 10, which have shown they are world class given the competition they are up against,” said Mr Green.

“These brands show customer experience excellence is not about soulless efficiency. All of them have a finely tuned digital experience and deliver to a clear brand promise, engage their customers emotionally and empower their staff to delight customers.”

CXi five pillars

Kantar’s findings are based on the CXi index, a globally developed and tested framework for understanding customer experience leadership. The index goes beyond traditional measures by bringing together all facets of brand and customer experience, including clear brand promise, memorability, empowered customers and employees, and exceptional delivery.

Spotify, like many leaders in the Kantar CXi study, excels in all five areas that define successful customer experience. From a customer perspective, Spotify leads New Zealand in delivering an exceptional experience as well as providing lasting memories.

Other businesses stand out in different areas. New Zealand’s banks stand out in empowering customers to easily do what they want especially in their apps or online, with ASB leading, closely followed by Kiwibank and BNZ also in the top five. Flight Centre and House of Travel both excel at empowering employees to assist customers, while Southern Cross Health Insurance takes top position in having the clearest brand promise.

Survey method

Kantar surveyed over 2,000 New Zealanders about their opinions on over 100 of New Zealand’s top companies in financial services, online shopping, media and entertainment, telecommunications, energy and retail.

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