Amazon and Alibaba capture customers with experience-centric business models
From car vending machines to checkout-free shopping – businesses are pulling out all the stops to deliver exciting new customer experiences that are more convenient and personalized than ever. Those doing it best are finding new ways to capture their customers’ attention and keep them coming back.
In a Seattle, Washington, convenience store, shoppers pick up snacks, groceries and toiletries and simply walk out with them. No, it’s not shoplifting. It’s the latest Amazon experiment in giving customers what they want – a quick, wait-free, brick-and-mortar shopping experience.
Cameras and sensors track shoppers’ activity as they browse and pick up items, creating a virtual cart. When they walk out of the store, the app calculates their total bill and charges it to their Amazon account.
The concept seems to be hitting the mark with consumers. The store has a 4.6-star rating on a 5-star scale on Google reviews. Customers have called it “the future of retail,” praising the “unique, seamless” shopping experience. “The future of highly advanced, convenient, and affordable grocery shopping is here!” one reviewer posted.
Across all industries, businesses are scrambling to keep pace with rising consumer expectations by developing new customer experiences (CX) that are personalized, innovative and disruptive. In a 2017 Forrester survey, “Pivot to Person-First Personalization,” more than two-thirds of the firms surveyed said that delivering tailored experiences is a priority. The reason is obvious: as Forrester’s 2016 report, “The CX Transformation Imperative,” observed: “CX leaders grow revenue faster than CX laggards.”
One business that understands the importance of putting the customer at the heart of its strategy is German orthotics and prosthetics manufacturer Mecuris, which has digitalized its fitting processes and automated it’s design process. Digitalized designs are output to 3D printers, which make devices custom-designed to each patient’s anatomy and movements – in a matter of hours.
“What we want to deliver, above just mobility, is a custom design,” said Felix Gundlack, the company’s CTO. The result is superior customer experience: prosthetics made to fit and look exactly how the patient wants.
Mecuris CEO Manuel Opitz recalls making a pink prosthetic for a 3-year-old girl and putting a unicorn design on the side. When she put it on for the first time, she said: “This is my foot.”
“In the past, we have tended to hide away mobility impairments,” Opitz said. “[But now] we want to create entirely new feelings about so-called patient aids and use them, more like other devices. We’ve seen this in eyewear. In the past it was something which you didn’t want to show off. Now it’s a statement – an accessory. We want to go the same way with prosthetics and orthotics, so that people are proud of them."
Like Mecuris, business leaders across the spectrum are realizing that new, automated technology means that personalizing at scale has become affordable. Austrian-based global automotive equipment manufacturer 3CON, for example, is using new technology to collaborate more effectively with its customers and simulate customized solutions, cutting design time by 30% in the process.
“Designers now have the freedom to add custom-made individual components to existing part designs to create new ones that are customized, yet cost efficient,” 3CON CEO Hannes Auer said.
An increasingly popular way to create customized experiences is to involve consumers in designing them, a practice called “open innovation.”
“Open innovation is about involving all of an organization’s stakeholders in its innovation process: employees, suppliers, startups, universities, and customers,” said Martin Duval, founder and co-president of French open innovation consultancy firm bluenove. “Companies are usually involving the customer too late in the innovation process, only when they have almost ended the design of a new product or service, or to get the reaction to a final test. ”If new ideas or objections to the product are discovered at this stage, rather than at the initial concept stage, the cost to address them can be prohibitive.
The payoff is twofold. Businesses are able to solve problems and identify new opportunities and, at the same time, create a more customer-centric culture because the customers are involved in decision-making every step of the way.
Forrester’s 2017 report “Improving CX Through Business Discipline Drives Growth," found that companies with a superior customer experience score grew revenues five times faster than competitors with an inferior score.
In the automotive industry, these centers around loyalty. According to J.D. Power’s annual US Customer Service Index (CSI), customers who are satisfied with their experience are more likely to recommend using a dealer for service or sales; it also affects their loyalty intentions toward a particular brand or model.
“Satisfied customers tend to stay with a brand and bring others with them,” said Chris Sutton, vice president of the US Automotive Retail Practice at J.D. Power. “Anything less opens the door for customers to shop elsewhere.”
To keep customers coming back, companies are finding new ways to improve the experiences they offer. For example, French grocery retailer Intermarché and cheese manufacturer Savencia recently surveyed customers and discovered that they would prefer to shop for cheese according to how they would actually use it, as opposed to its type – hard cheese, soft cheese and so forth. Working together, they planned out new display strategies.
“We’ve had really positive customer feedback,” said Marie-Noelle Lefebvre, manager (franchisee) at Intermarché Buc. “And when we looked at the figures, we saw a 4% sales increase. This is pretty good at our point of sale, especially as we have many fresh food and dairy products.
”Other businesses, including online marketplace Alibaba, are building new businesses from scratch. Alibaba’s “New Retail” concept – using technology to seamlessly merge the online and offline shopping experiences – aims to consistently engage the customer at every step of their journey."
Current consumers live very rich digital lives, but they also require a lot of the experience in the offline world,” said Jason Ding, a partner at consulting firm Bain & Company’s Beijing office and author of a joint report with Alibaba’s AliResearch unit on New Retail. “Brands need to follow the consumer to really provide an integrated experience."
In Guangzhou, China, Alibaba unveiled a new kind of car shopping experience in partnership with American carmaker Ford. Customers can browse more than 100 car models on an app, choose one they want to test and then pick it up from a giant multi-story vending machine, which dispenses their chosen car in less than 10 minutes. They can drive it for as long as to three days before making a purchase decision.
“WE ARE LOOKING FOR WAYS TO SIMPLIFY CUSTOMERS' LIVES AND GIVE THEM THE ULTIMATE TRY-BEFORE-YOU-BUY EXPERIENCE.”VICE PRESIDENT OF MARKETING, FORD ASIA PACIFIC
In the future, bluenove’s Duval believes that progressive businesses will go beyond shopping experiences to tackle social issues in partnership with their customers, as well. “The next thing will be for brands to open democratic debates through a massive collective intelligence process, to mix their ability to merge customer needs with citizen aspirations,” he said. “The most innovative products and services will also be the ones which are most in line with our social issues.”Back to top