How Cloud Technology Helps Retailers Reenvision Their Customer Experience
How can retailers retain loyal customers and attract new ones? The answer lies in cloud technology.
By Lily Hicks
A matter of months ago, this happened:
- A customer bought shoes, in a store.
- The customer received rewards for their purchase in near-real-time.
- The customer turned around to shop some more with their newly earned rewards.
Today, this is happening:
- A consumer has fewer people to visit, places to go, and occasions to wear shoes.
- One of the consumer’s favorite shoe retailers invites them to call its service agents just to chat.
- The consumer has a 45-minute conversation with a service agent. It ends in finding the consumer a local grocer with flour in stock so that they can try the agent’s homemade bread recipe.
The first scenario is a real-life outcome of our work with one retail client. It shows the in-store impact that cloud technology can have on customer loyalty. The second scenario is also a true story, but refers to the free service that Zappos is offering consumers during — and possibly after — the COVID-19 pandemic. Loyalty, Zappos seems to be saying, is just as much about customer experience and relationships as it is about rewards.
And Zappos might be onto something. Don’t get us wrong: Reenvisioning your customer experience doesn’t have to mean turning your service agents into on-demand homework helpers. But that level of innovative thinking around customer experience could be exactly what’s required for retailers to retain their loyal customers.
Technology has a place in this customer-experience reenvisioning. Modern, cloud technology can make the difference right now between walking ahead of your customers, clearing their paths to purchase of any obstacles, or watching from behind, hoping your customers will find their way and trust you enough to persevere. When it’s hard enough finding flour.
It’s time for retailers to revisit their technology
Reenvisioning your customer experience can also mean rapidly rebuilding your predictive analytics to ensure fewer customers order items that end up being out of stock. That’s what Instacart did in March, when it faced a 30 percent drop in ordered items being found. Because Instacart already had a solid data foundation and IT infrastructure, it was able to quickly adapt its analytical model to the times, running it every hour (instead of every two) and limiting the historical data it considers to one week (previously 30 days).
What about retailers without the infrastructure for advanced analytics? Their customer experience — and therefore customer loyalty — is under threat. Two-thirds of consumers have tried new brands after sheltering in place, with 79 percent saying they did so because a product was unavailable or out-of-stock.
What if those abandoned brands had been able to:
- Forecast demand with greater accuracy?
- Provide their customers an assortment of personalized recommendations, with viable alternatives to their first pick?
They might have kept their customers. And that’s the power of technology. Forecasting services and recommendation engines are at our virtual fingertips, thanks to cloud technology. With pay-as-you-go pricing and built-in security features (and without a deep bench of IT professionals), cloud technology gives retailers the building blocks to execute their customer experience strategies quickly, securely, and cost-effectively.
3 cloud-enabled capabilities to improve customer experience
In May, Forrester released a list of the top retail tech investments of 2020, starting with the “hot” and ending in the “hype.”
Each of the first three investments has the potential to improve customer experience:
- Advanced analytics/data analysis tools
- Omnichannel capabilities
- Personalization technologies
Each is also enabled, accelerated, and optimized by cloud technology.
The 60 interviews that informed the list took place in January and February 2020, before COVID-19 officially became a pandemic, but the authors explain that they, “expect that retailers and brands will ultimately make most of the investments they prioritized during their interviews; however, they will more likely occur in 2021 (barring a wide-scale COVID-19 resurgence at that time).”
Here at Slalom, we also expect that retailers will make most of the investments they prioritized. And we expect that retailers who don’t wait until 2021 for their digital transformations will emerge from this crisis readier than ever for retail’s new normal.
So, what could investments in 1, 2, and 3 start to look like? These real-world stories might give you an idea. They all feature retailers or the companies that serve them, and they all include cloud technology. Slalom works with all of the major cloud providers (and some smaller ones, too), but to make this picture more complete, our examples will focus on AWS: the cloud chosen by at least one company that has made loyalty its business.
1. Advanced analytics
Instacart’s analytical reset is a good example of leveraging advanced analytics to improve customer experience. Recently, we worked with a children’s clothing retailer to help build its ability to pivot that quickly. For this retailer, that meant migrating two years of point-of-sale, marketing, and inventory data from its on-premises environment to the AWS cloud.
After setting up, configuring, and securing the retailer’s AWS environment…
- For the first time ever, the inventory team has a truly historical view of key product in-stock rates. It also cut processing times by 99 percent—from three weeks to two hours.
- The pricing team provides dynamic pricing on its e-commerce platform using 400,000 new machine learning models, one for each product line. Built in Amazon SageMaker, the models also help the team optimize prices for in-store promotions at daily and weekly frequencies.
How it improves CX: Customers find more of the products they want at the right times, at the right prices.
2. Omnichannel capabilities
“Omni” literally means “all,” as in “all channels.” How can anyone’s omnichannel strategy possibly be good enough with a definition like that? Like it or not, this is the word that’s used to describe the ability to track and deliver experiences across channels. All channels. Or maybe just the ones you’re using? We really don’t know, but 40 should count — that’s how many marketing technologies LiveRamp united inside one data lake on AWS.
LiveRamp is the creator of a leading data connectivity platform used by companies such as Macy’s, Lowe’s, and REI. LiveRamp wanted a 360-degree view of its own customers, and to get it, it needed to connect its own data. So, we formed a data lake on AWS and then reached across the customer journey — from Salesforce to Marketo to Pendo — to pull data into it.
- To work with the data, we built a data warehouse in Amazon Redshift.
- To piece together what’s working and with who, we created universal customer and prospect IDs.
- To visualize the data, we built Tableau dashboards that can draw from the warehouse in real-time.
Now, LiveRamp has a true omnichannel view of marketing performance across channels, accounts, and industries.
How it improves CX: Customers and prospects receive more cohesive, less duplicative marketing from one channel to the next.
3. Personalization technologies
Today, personalization technology transcends basic text replacement. Customers can now receive the right messaging and the right product recommendations for them at that moment. When an electronics client sought to implement machine learning and start with a high-value use case, it made sense build a recommendation engine.
Using Amazon Personalize, we co-developed a ‘customer also bought’ recommendation engine to drive sales on the company’s website. Personalize, a real-time personalization and recommendation service from AWS, allowed us to quickly register the company’s ecommerce interaction datasets, establish data feeds, and then build and optimize a machine learning model.
Today, the client’s customers get personalized recommendations in real time, based on products that are currently in their carts. The company is also leveraging the engine to introduce new packaged offerings to customers at lower prices.
How it improves CX: Customers can effortlessly discover the products — and deals — that interest them most.
Get poised for rebound
We have no crystal ball (although Amazon Forecast comes close to one), but we’re optimistic about what’s ahead for retailers. May 2020 saw better-than-expected results for the retail industry. At their reopened stores, American Eagle Outfitters and Abercrombie & Fitch reported respective sales of 95 percent and 80 percent of normal levels.
Consumers are coming back. So, brush off the welcome mat. At your brick-and-mortar stores, don your masks and make other precautions. Most importantly, give your customers a reason to stay or return by providing them personalized, cohesive, cloud-enabled experiences. And maybe a favorite recipe.
Want to learn more about improving your CX with AWS?
We’ve packaged up these insights and more in one simple brief. Get your brief here.
Watch this joint webinar with AWS and Slalom on demand: Raise the Bar on Customer Experience: Unlocking Insights Trapped in Customer Conversation. You’ll discover the potential blind spots of traditional customer insight methods and learn how advances in AI and machine learning can help you unlock a treasure trove of customer insights with the data you already have.
Lily Hicks is a writer on Slalom’s AWS Global Growth Platform team. She turns bright ideas from Slalom’s great minds into stories with actionable advice for technology professionals.
Special thanks to:
Michelle Dennen, Managing Director of Client Service, San Francisco Bay Area
Jordan Wells, Sales Executive, Client Leadership Team, San Francisco Bay Area
Sameer Karim, Practice Area Lead, Products & Innovation, San Francisco Bay Area
Joe Zehnpfennig, AWS Strategic Area Director, San Francisco Bay Area
Up Next: Power to Your People
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