Forrester: Traditional retail on pace to beat digital in customer experience

Dive Brief:

The Forrester Research report “Global Customer Experience Trends, 2017” taps its Customer Experience Index for insights and found tight competition in the retail sector and looming changes. Key findings include that great customer experience (CX) is very rare with a vast majority of worldwide brands only scoring in the “OK” range, per a report provided to Marketing Dive. Only 18% of U.S. brands ranked as “good” or “excellent.”
Looking specifically at the retail sector, digital and traditional retail are close with digital edging out traditional based on better-performing lagging brands rather than standout leaders. The noticeable change from 2015 to 2016 was 40% of traditional retailer’s CX scores rose compared to only 18% of digital retailers.
Given the recent trends, Forrester expects traditional retail to take over digital retail in CX within two years because traditional retail is actively pushing for better CX while digital retail remains relatively complacent.

Dive Insight:

The report helps explain, in part, why Walmart is racing to buy online retailers at the same time that Amazon is making a major foray into physical retail with its acquisition of Whole Foods. As consumers continue to expect strong omnichannel experiences, those who can integrate both physical and digital retail to provide a strong experience may have an advantage.

Broken down by the eight countries covered in the report, digital scored higher than traditional in six. However, when comparing the top digital and traditional companies, the leading traditional retailers actually average one point higher. The results underscore a key advantage of traditional retailers over digital in customer experience who can provide a much more high-touch, personalized experience through in-person experiences compared to e-commerce which relies more on ease-of-use and convenience.

Illustrating how close the scores were for the two areas of retail in this year’s report, digital retail’s average score across the eight global markets covered was just two points higher than traditional retail’s. One area where digital did hold a more significant lead was in emotion, with 57% of customers reporting emotionally positive experiences for digital compared to 50% for traditional retail.

Another finding was CX competition in digital and traditional retail is tightening, with the difference between the highest and lowest performing brands in both narrowing by four points from 2015 to 2016. The competition in the digital retail subset was tighter than for traditional result, reflecting that there are fewer factors impacting e-commerce customer experience while traditional retailers’ CX will bring factors like location, parking and store condition into play.