Prior to COVID-19, digital transformation for many organizations was a long, complicated and often frustrating journey. Orchestrating the many disparate digital projects running across the various functions within the organization posed difficulties and it was often confusing who was actually driving the digital transformation agenda, resulting in delays and unclear ROI of initiatives.
Enter COVID-19, when the entire world was sent online overnight. Out of necessity, organizations had to innovate quickly to replace traditional in-store or in-person experiences with online equivalents. Simple activities like going to a grocery store, shopping for clothes and dining out became dangerous or prohibited. Online services surged, such as Instacart, which reported a 300% year over year increase in consumer demand. The company had to hire 300,000 additional “shoppers” to keep up. Amazon ecommerce numbers ended up totaling $88.9 billion, marking 40% year over year growth. Growth was especially impressive for grocery sales, which tripled after Amazon increased its grocery capacity by 160% amid the pandemic.
With the acceleration in digital engagement, leading companies have innovated quickly to replace or complement traditional, in-store experiences. Digital experiences will continue to grow increasing online competition. Companies with highly personalized, relevant experiences will win the hearts and minds of consumers. Now more than ever, we are truly in an experience economy.
Behaviors Have Changed as the World Moves Online
Behaviors have changed dramatically as a result of the pandemic. People’s daily routines — whether their job, living situation, school, shopping, travel and many other aspects of their lives — have now been completely rewired, maybe forever. This has been a huge catalyst for driving more digital engagement. For instance, UBS estimates that ecommerce will increase to 25% post COVID-19 as opposed to 15% in 2019, potentially resulting in the closing of over 100,000 retail stores in the next five years.
More than one third of consumers are now shopping online weekly since coronavirus hit. Consumers spent nearly $212 billion on ecommerce between April and June 2020 according to new data from the US Department of Commerce, marking an increase of 32%.
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Click and Collect Goes Robotic
Recognizing the need for users to shop online, the retail industry quickly implemented practical online solutions such as Click and Collect to meet changing customer needs. The click and collect concept allowed shoppers to purchase items online and do curbside pick-up at the store or schedule at home delivery. While Click and Collect was technically available before the pandemic, sales increased by 63% during COVID-19 with an increase of 33% of households leveraging the service. As anticipated, the largest segment of new adopters were senior couples and adult couples with large families. But what’s most impressive is that 83% of users overwhelmingly enjoyed the experience with 87% of users indicating they would use the service post pandemic.
Consumers enjoy this new flexibility and enjoy being able to define how they're serviced and how they receive goods. Brands should continue to expand their products that are eligible for Click and Collect. Click and collect is bound to persist, especially for routine shopping, long after the pandemic subsides.
But the future of click and collect may be in a new generation of touch-free robotic pickup lockers. A new wave of young tech companies are pushing solutions that are compact, unmanned refrigerated lockers using automation to serve up grocery orders in the style of an ATM. These units can be deployed in any variety of locations such as store parking lots, drive-up kiosks and community-based hubs like train stations. Retail Robotics has launched its product Arctan, which provides an efficient click and collect solution for e-grocery retailers, reducing delivery costs by 70% and increasing effectiveness by three times by reducing space and labor costs.
Payments Cash in
The increase in online shopping and commerce is driving huge upside for payment processors like PayPal. PayPal’s second quarter 2020 results indicated Total Payment Volume (TPV) increased to $222 billion, growing 30%. Payment transactions were up 26% to 3.7 billion payment transactions. And it reported a 137% year over year increase in net new active accounts setting a record of 21.3 million active accounts in the quarter. Venmo, PayPal’s social payments platform, reported a 52% increase in TPV to $37 billion.
This increase in online activity is also driving consumer expectations towards more integrated, simplified payments. The line between commerce and payments is blurrier than ever. Especially with ordering increasing on mobile devices, the need for streamlined payment options is greater. Companies must also build safety into the customer experience. Rethinking contactless commerce to promote safety across products, services and processes will be critical to put customers at ease and increase their satisfaction. There is no question that contactless payments are a cleaner alternative to other payment means such as cash, credit card or checks. Businesses that create seamless commerce and payments experiences will gain significant competitive advantage.
Related Article: Financial Services Ride the Disruption Wave
Mobile Is Now the First Screen
Even before the crisis, mobile was growing in dominance as the go-to digital device in any decision making journey. However, COVID-19 changed consumer behavior on mobile forever. The change is being driven by more daily use and tighter integration with services such as payments, fulfillment, etc. Mobile has now become the “first screen” for many users.
So far in 2020, users have spent 1.6 trillion hours on their mobile devices with daily usage peaking at 4.3 hours. In the first quarter of the year, mobile ecommerce traffic grew by 25% across all industries. In the US, mobile activity grew by 28%. In fact, mobile phones represented 56% of total order share and 71% of total traffic in the first quarter. Mobile advertising is also on the rise with 70% increase in ad placements during the pandemic.
In addition to mobile commerce, mobile gaming is also driving higher mobile usage. Mobile gaming spend exceeded $20 billion in the third quarter 2020, with mobile games sustaining 1 billion downloads per quarter as lockdowns continue to drive consumers to seek at home entertainment.
According to App Annie, ecommerce boomed in the first half of 2020, achieving growth that normally would have taken between 4 and 6 years — and mobile was central to this growth.
Mobile usage will continue to rise. And according to mobile phone sales statistics, the percentage of the global population that will have a smartphone is predicted to reach 37% by 2020.
Related Article: The New, No-Touch World of Commerce: Reimagining Customer Experience
Chatbots Are Back in the Conversation
Chatbots have made a comeback during the COVID-19 pandemic. The rudimentary, often frustrating digital assistants have found their place, assisting customer service agents with increased workloads by automating the answering of basic questions and processing of transactions. The health crisis created a massive challenge for consumers, and thus for brands, causing a flood of contact activity. Late deliveries, cancellations or rescheduling orders, cancelling travel plans all generated high volumes of activity to call centers and websites.
The use of the IBM Watson Assistant increased 59% between February and May of this year, and organizations in 25 countries and across multiple industries have used it as part of their COVID response. Google launched a special version of its Contact Center AI chatbot called Rapid Response Virtual Agent to allow organizations to quickly deploy chatbots to answer questions 24/7 across voice, chat and social channels. The Rapid Response Virtual Agent lets customers use Dialogflow to customize chat conversations with customers looking for COVID-19 information in over 23 languages. One of the leading conversational platforms, iAdvize, reported nearly 24 million transactions and more than 39 million messages have been exchanged on their platform during the early phases of COVID-19.
The Healthcare industry in particular benefited by the early deployment of conversational technology. The main goal of deploying chatbots was to help screen patients for COVID-19, so the healthcare workers can deal with more severely ill patients rather than screening folks with mild conditions over the phone. Institutions like the Centers for Disease Control and Prevention (CDC) and the World Health Organization (WHO) utilized chatbots to share information. The CDC named theirs “Clara” which was built on a Microsoft Azure architecture and utilized artificial intelligence (AI) to help free up doctors, nurses and administrators so they could focus on critical care. The chatbot quickly differentiated between individuals with high risk factors that might need immediate attention versus people who were looking for more generalized information.
This increase demand has had a positive impact on helping rapidly mature conversational technology (and chatbots) significantly, especially over the past few months as the COVID-19 pandemic has spread. Companies can now more aggressively deploy chatbots as a viable complement to their customer service agents to handle peak volumes and offload routine service requests to allow service agents to handle more complex or unusual issues.
Related Article: What Makes a Chatbot Tick?
Authentic and Emotional Connections Build Loyalty
The pandemic forced consumers into a digital-only experience with brands. It’s important for businesses to infuse their virtual experiences with a human touch. Emotional connections hold the key to achieving customer experience differentiation. Brands that pivoted to become sensitive to customers changing needs gained significant benefit. Forrester research reported that when it comes to stand-out customer experiences, leading brands rely on emotion to build loyalty.
Companies should resist the temptation to maximize wallet share by overtly selling to their now captive online consumer base. Instead, making meaningful offers that are sensitive and assistive will go a long way in building loyalty. In the new normal, people want to be seen and understood. They are extremely sensitive to tone and motive. Your outreach needs to feel authentic not self-serving. The impact of your actions today will determine the loyalty of your brand and products well past the pandemic.
PWC research reported that 59% of global consumers felt companies had lost touch with the human element of customer experience. and 75% of the customers surveyed preferred to interact with a human versus an automated experience. Brands that consider embedding human interactions into their experiences will be positively surprise their customers. A customer who contacts a call center might be delighted to have the option of a video call with a real person who’s also working from home and is willing to take the time to address the issue or concern.
Big Penalties for Bad UX
There soon will be greater consequences for delivering bad experiences to your customers. Back in May of this year, Google announced it will be enhancing its search algorithm to now consider the users’ experience. If Google’s algorithms determines that your website provides a sub-optimal experience, it will be ranked lower.
Google has created an entire measurement framework for what it calls the “page experience.” In its developer’s document it describes several “signals” that will be measured to ascertain the quality of the page experience. This will include core web vitals such as page load performance which needs to happen within 2.5 seconds, interactivity which should be within 100 milliseconds, and visual stability which measures the amount of layout shifts occurring on the page. Additionally, attributes such as mobile friendliness, safe browsing without malicious content such as malware and no intrusive interstitials to ensure the page is easily accessible to the user.
While a great page experience doesn’t override having great page content, in cases where pages have similar relevance, page experience will play a role in the search ranking and ultimately the visibility of your page to the user. While this new search algorithm won’t be live until sometime in 2021, now’s the time to get serious about your page experience.
Creating a Winning Experience
Customers will not tolerate outdated technology, processes or communications when it comes to your brand experience. Outdated technology is a signal to customers that the overall experience might not be a priority. Brands need to continue to invest in their technology platforms to deliver best in class, frictionless experiences.
Brands also need to become more human by reducing the jargon, red-tape and complicated processes. Brands that behave, reply and interact in a more human fashion will ultimately win their customer’s loyalty.
The new normal is here and it’s all about the experience.