Given that billions of people and devices are now online, and the internet of things continues to grow explosively, it is no surprise that consumers' preference to do their shopping online rather than actually going into a store has increased dramatically in recent years.
Consumer buying behaviour has changed and is now evolving in such a way that retailers are having to approach how they engage in a completely new way. As a result we've witnessed a huge rise in online-only retailers, meaning the days of actually walking into a store to purchase goods are increasingly distant, and with recent reports that by 2018 £1 in every £7 spent in the UK will be online, growth is on the horizon.
This change in behaviour is putting retailers in a challenging position as it is driving a disconnect between them and their customers – resulting in some inherent flaws in the customer service model.
This is because retailers have struggled to keep up with the trends of the modern day consumer. We have entered a period where more often than not, consumers have better technology than a retailer and are more informed than the person they are buying from. In addition, consumers are, now more than ever, turning to social media channels like Facebook and Twitter to air their grievances, often with mixed results.
The customer service model has become fragmented by technology and retailers are trying to piece it all back together. Some retailers have done so successfully and been quick to implement viable customer service solutions in their offering but others, often those with smaller amounts of resources, have struggled.
But, it doesn't end there. Online retailers are facing the uphill task of actually resolving customer issues as they don't have the solutions in place to deal with the process after the enquiry stage – driving further flaws and gaps in the consumer relationship. Just look at eBay, which last year had over 60 million unresolved disputes – that means a lot of unhappy customers in the marketplace.
By implementing the right solutions in the back end and giving consumers the right channels to engage, retailers are in a prime position to help bridge the gap and correct the current flaws in the customer service model.
By delivering an end-to-end customer service model that is reactive to consumers' needs and proactive in making sure issues are resolved, retailers are able to build stronger relationships with customers and brand reputation will increase as a result. Issues being dealt with in a quick and efficient manner keeps customers happy and all retailers will tell you that a happy customer is usually a loyal customer.
Retailers should also be aware of the EU-wide legislation which comes into play in 2015 which will make online dispute resolution (ODR) compulsory for retailers, so whilst business growth financially might be a short-term goal, implementing a viable service to manage online disputes will be something that retailers need to address very soon.
If European retailers address the existing flaws that are appearing in the online customer service model, they have a huge opportunity to increase sales by decreasing customer churn, and they can keep their current customers happy whilst also adhering to impending EU legislation.
- Karl Reindl is Managing Director of Youstice and has over 20 years of international experience in IT, sales, consulting and management.