Retail execs struggling to grow and retain customers: survey

Customer trust and loyalty is the top priority for the next two years for 33 per cent of the 526 consumer and retail executives who responded to the Global Consumer Executive Top of Mind survey on “Think like a start-up: How to grow in a disruptive market”, conducted by KPMG International and The Consumer Goods Forum (CGF). Nearly three quarters (74 per cent) say customer trust and loyalty is “very to critically” important to their short-term success.
The survey results suggest that many consumer and retail executives leading the largest businesses from around the world lack the capabilities and know-how to attract and retain customers. About 39 per cent admit that when it comes to personalising the customer experience, their companies’ capabilities are poor to fair.
“Consumer and retail executives recognise that, in this age of disruption and volatility, customer experience is a primary differentiator and the key weapon in the battle for their loyalty,” says Willy Kruh, KPMG’s Global Chair, Consumer & Retail. “Many executives now see that new business models could disrupt them and that, in a marketplace of unparalleled access to information, loyalty is not as strong as it once was. Recognition is one thing, but action is another. To get closer to their customers, consumer and retail companies need to use customer data to not only make them wiser but also to translate it into a better experience. Personalisation needs to be founded in deep customer insight.”
“More importantly, customer experience also depends upon the total experience that customers have had. Customers are more likely to remember either an unexpectedly enjoyable experience or a completely bad impression on products or services,” says Nittaya Chetchotiros, Head of Consumer Markets, KPMG in Thailand. “In order to provide the most delightful customer experience, companies need to first truly understand their customers’ needs.”
“Of the many disruptions in the consumer industry right now, arguably the most fundamental is the impact of Millennials and Generation Z. This report highlights how established businesses still have a long way to go to meet consumers’ changing needs – for products, channels and relationships – and most particularly the underlying importance of authenticity and transparency in everything they do. The CGF’s members believe that collaboration has a big role to play in responding to these disruptions,” adds Peter Freedman, managing director, The Consumer Goods Forum.
The majority of the consumer and retail executives responding to the KPMG/CGF survey are looking at technology to improve the customer experience. They are using some of the more familiar technologies such as social media, mobile apps, e-commerce/digital payments, and mobile commerce/wallets. Indeed, the survey respondents report that enhanced customer experience is the primary benefit of their investment in and use of these technology tools.
Looking ahead, the adoption of newer technologies such as artificial intelligence (AI) is still relatively low – only a third of respondents say they will invest in AI over the next two years. However, 41 per cent of those who plan to adopt AI say the primary motive will be to improve customer service.
“While some are using or planning to use AI to improve customer service, there is so much more that can be done both in terms of execution and strategy,” says Kruh. “Used in conjunction with customer data, for example, AI can provide deep data and analytics [D&A] capabilities to understand and predict customer preferences, make recommendations and ultimately drive sales.”
However, when it comes to D&A, over a third of the consumer and retail executives responding to the survey say they have relatively low D&A capabilities. But then 62 per cent also say D&A will be “very to critically” important to their short-term success (with another 30 per cent saying it’s at least moderately important). In addition, D&A capabilities are the top area of investment currently in use by 65 per cent of respondents, and expected to be in use of 90 per cent by 2019.
“D&A is the cornerstone of success for today’s consumer and retail companies. Deep, real-time insights can unlock a company’s ability to earn customer trust and loyalty by enabling them to understand and serve them exactly when, where and how they want. It can fuel and drive agility and efficiency throughout the supply chain – from manufacturing to distribution, and it can inform a dynamic and competitive price and product strategy. Very soon, consumer and retail companies without advanced D&A capabilities will no longer be competitive,” Kruh concludes.
“In the age of industry 4.0, with Thailand being driven by technologies, consumer behaviour of Thais has rapidly evolved in different dimensions as a result of new technology and innovations. For example, more Thais are shopping online, they now spend more money on services than buying actual products, and trends in healthcare spending have significantly increased among Thais. 
“Consumer and retail executives now have more information at their fingertips. To understand the customer journey and create more personalised customer experiences, this is where technology will come in handy for providing deep D&A capabilities,” Nittaya adds.