The ancient Chinese sage Lao Tzu could not have foreseen the complexities of 21st-century retailing when he said, “A journey of a thousand miles begins with one step.” Every retailer needs to understand that this venerable concept describes today’s customer journey.
Understanding the customer journey has a sense of urgency in today’s retail environment of constantly evolving customer research and purchase patterns. And it is most compelling when viewed in the context of the customer experience (CX). The customer journey creates an experience. Everyday retailers face the challenge of understanding how customers make decisions and how to build a customer experience from a customer journey perspective. That journey should provide customers with the information they seek to carefully entice them to choose the product or service they desire. The journey should also create opportunities to attract, retain, and engage more customers. In short, it’s the journey that gets the customer to the experience.
It’s important to delineate the differences between the customer experience and the customer journey, and how they relate to one another. Let’s start by defining CX as “the cumulative impact of all interactions that an individual has with a brand, its community, products or services, anytime, anyplace.” A single customer journey is comprised of three steps as customers form impressions (both positive and negative) of a retailer based on their experiences. The customer’s perceptions are either built up or eroded with each contact. Those customers who have high levels of engagement usually benefit from the cumulative effect of positive experiences through the entire purchasing process or successive purchasing occasions.
These three steps can help clarify the daunting process for retailers to analyze the customer journey.
Identifying needs, exploring options to meet those needs, comparing possible solutions, and seeking other opinions to build confidence in making a decision. A customer can go through various iterations of the Consider phase before actually transacting.
Finding the product or service that the customer wants to purchase, making a final selection, and payment.
Receiving delivery, using the new product or experiencing the service, and sharing their experience with others.
The overall customer journey and its individual steps occur in varying time frames, depending on the product or service being bought. As demonstrated in Figure 2, everyday purchases such as milk often take place based on immediate needs and are therefore completed quickly.
However, more complex purchases involve more time to Consider, Shop, and Enjoy. Discretionary purchases may involve greater financial commitment or emotional engagement. The customer will therefore spend more time in the Shop and Consider phases, for instance, when buying jeans (for most customers the fit matters). Shopping for, and enjoying a vacation involves greater emotional and financial investment. These customers will make longer journeys, involving extra steps in the Consider phase such as taking time to decide their destination before choosing their accommodation. Then they may post reviews about their hotel in the Enjoy phase.
One Customer, One Journey
Customer journeys are customer specific. The nature of the purchase will also vary by market, as different customers in various markets approach purchasing the same products in different ways. For example, meat may be regarded as discretionary in certain communities, but a commodity in others. The key point is that customer journey impressions are customer specific, so that different customers will have varying levels of engagement with the same retailer.
In order to improve the CX at each point of the customer purchase journey, retailers should use customer journey mapping to identify all the possible options for customers to capture information, make a purchase and share their experiences. Here are some key principles to take into account in mapping a journey:
- Support with data-based analysis.
Customer journeys can be mapped using sophisticated data analytics, examining each step so that the different journey options are ratified and quantified according to their relevance to each customer segment. Customer journey mapping then clarifies which customer touchpoints are most important and therefore have the most leverage, enabling the creation of customer plans, investment decisions, and performance indicators.
Data analytics can also be used to diagnose the most basic CX issues. For example, live monitoring of the number and frequency of tills that open and close against the total number of transactions expected in a given hour on a given day can illustrate and quantify customer queuing times.
- Offer channel agnostic customer journeys.
Customers will value the option to interact with retailers across each of the Consider, Shop, and Enjoy phases on their own terms, frequently using information from sources outside of the control of the retailer (e.g., by accessing online reviews). One challenge for retailers is to combine channels to create one seamless journey for the customer, irrespective of which channel they are using. Customers use all channels as a means to an end—often researching online and buying in store to get the true shopping experience that they seek. Online or mobile behavior is easier to track, and generates more information about the customer than the in-store experience, yet customers need to be satisfied across all channels, and not isolated to one or the other. Therefore, retailers need to integrate their data into a single customer view to allow them to visualize and understand how customers combine their use of digital and physical channels for different purposes.
When data is combined with a live, integrated view of inventory, enabling customers to know if their chosen product is available and when it can be delivered, the combined use of digital and physical channels greatly enhances CX.
- Use technology wisely to address real customer problems.
By mapping each customer journey key target segment, retailers can gain a deeper understanding of the problems and barriers that customers face. As a result, retailers can design solutions and employ technologies to deliver new services based on actual customer needs. Figure 3 illustrates how this works in practice: MasterCard Advisors created two solutions for two different European department store customer segments. One group was provided with a digital solution exploiting those particular customers’ propensity to use mobile and online channels. The other segment was responsive to more conventional, face-to-face service.