Have we passed the digital tipping point? Accenture says, ‘yes’

SUMMARY:

All that money being spent on digitally-enabled personalisation by retailers and banks could be something of a waste as consumers see in-store experience as the preferred option.

Are we being served? And how?
Are we being served? And how?

So, you know all that money that’s going into omni-channel strategies in retail and finance and so on so that the digital consumer has every possible customer engagement mechanism open to him or her?

Well, it seems that said consumer isn’t that bothered after all – or at least not according to the findings of new research from Accenture Strategy. The Digital Disconnect in Customer Engagement report finds that 83% of US consumers prefer to deal with humans rather than use digital channels to address customer service issues.

It’s the same story in the UK, where 76% of respondents make the same point, while 71% want to talk to real person in order to get advice or to answer questions. In the US, 77% of respondents want to seek advice from human beings, not online information sources.

The report is based on Accenture’s eleventh annual Global Consumer Pulse Research, which gauges the experiences and attitudes of 24,489 consumers around the world about marketing, sales and customer services.

The top line findings chime with comments from a number of executives in recent months. For example last week the CEO of retailer Urban Outfitters argued that the death of the offline shop was greatly exaggerated:

I envision the bricks-and-mortar store as an equal partner with the virtual store in this new omni-channel world. There’s no better proof of this than the current rush by most pure-play retailers to open their own retail stores.

Sean Gilchrist, managing director for Commercial Digital at Lloyds Banking Group made a similar point last October when he said:

I started my life as a branch manager with Lloyds. We need the industry to move back to the kind of conversations that in my day a branch manager would have had with their customers. If you talk to customers and clients , that’s what’s missing.

So I think that pendulum that has happened across industry where we’ve de-skilled the branches, actually moving back and seeing more branch managers and people with that credibility just having that kind of conversations with their customers, shaped around how we help people to manage their finances.

Accenture’s research suggests that consumers still hanker for the physical, in-store experience with 65% of US respondents and 56% of those in the UK stating a belief that the best way of getting a tailored customer experience is by being in the store, which may be worth bearing in mind when discussing digital personalisation strategies.

And in an age of up-sell and cross-sell, respondents on both sides of the Atlantic claim that they’re more likely to respond to being sold new products face-to-face than online – 46% in the US, 36% in the UK.

The overall conclusion from the study is an uncomfortable one – digital has reached a surprisingly early tipping point and that far from empowering personalisation can, if not used with care, lead to alienation. The report makes the bold claim:

Many companies are approaching a tipping point where the expense associated with digital exceeds the value of digital benefits. The lack of a balanced approach to digital and non-digital experiences comes with a significant cost.

It adds:

Many customers like [the] intensity of digital connection. But a sizable number throw up their hands, too overwhelmed by the inundation of choices to make any choice at all. For them, too much digital interaction is an annoyance—and a deterrent to sales. Also, when multiple providers bombard customers with digital promotions, customers don’t feel special or unique. All offers and communications blur together in an undifferentiated way. Customers feel like companies have used digital not to tailor their experiences, but to commoditize them.

Robert Wollan, senior managing director, Advanced Customer Strategy, Accenture Strategy, argues that there’s a need for organisations to examine their customer bases in search of the appropriate balance between offline and digital:

Companies have lost sight of the importance of human interaction and often make it too difficult for consumers to get the right level of help and service that they need. Companies wrongly assume that their digital-only customers are their most profitable, and that customer service is a cost. Consequently they over-invest in digital technologies and channels and lose their most profitable customers – multi-channel customers – who want experiences that cover both digital and traditional channels.

To redress the balance, Accenture makes a number of key recommendations:

  • Put the human and physical elements back into customer services such that the focus is on delivering satisfying customer experiences, methods of interaction.
  • Make it easy for customers to switch channels to get the experiences they want, so that consumers can move from digital to human interaction to get the outcomes they desire.
  • Hunt down the most toxic customer experiences across all channels and use those insights to guide an investment strategy.
  • Guarantee personal data security in ligjht of the fact that 92% of respondents say it is extremely important that companies protect the privacy of their personal information.

My take

It’s striking the balance that’s the tricky thing, of course. I buy a lot of clothes from Banana Republic. I like going into their stores, but find myself just as likely to purchase online as I know the cut and sizes well enough to be confident of getting something that fits me without having to go into the shop. Equally I don’t object to the frequent offers and sales promotions that come into my in-box.

On the other hand, I long ago lost patience with several other retailers – including Marks and Spencer – whose attempts at digital personalisation were just appalling, but with whom I will engage offline.

Equally I was happiest doing my banking online when I was with Lloyds, fed up of the experence of going into the local branch and waiting around for some semblance of decent service. Since moving to Metro Bank, the in-store experience is so much better that I find myself increasingly splitting my activity between online and offline.

It’s a challenge I don’t envy the buy-side having to meet. As we’ve seen from so many retailers playing catch-up, omni-channel investment is unavoidable, but it’s not advisable to become overly-focused on digital at the expense of the physical.