Since 2020, 18 major retailers have added Chief Customer Officers (CCOs) to their executive leadership teams. It’s a trend worth unpacking. After all, customer-centricity isn’t new to retail. Why is it suddenly getting a seat at the executive table?
The answer to that question actually has a lot more to do with the customer than it does the retailer. When we look at this from an e-commerce lens, how consumers shop — and their expectations around shopping — has changed significantly and quickly. In just a few short years, we’ve seen new customer behavior trends across different areas:
- Social shopping: Nearly half (48%) of social media users have bought something after seeing an ad.
- Payments: Nine in ten younger consumers prefer self-checkout and contactless payment.
- Conversational commerce: A January 2023 report from Square found that 25% of Gen Z consumers are interested in shopping via chat or text. How will that number rise as generative AI gives way to more sophisticated chat experiences?
The rate of change is only accelerating as technology offers more possibilities. Yet historically, there’s been a very siloed view of that change. Businesses saw the customer in the context of specific channels — marketing, on-site, in-store and so on. Even when they adapted to customers’ changing demands in one channel, retailers didn’t always reflect those changes in another, creating a disjointed shopper journey. With the rise of the CCO, more businesses are acknowledging that they must pivot toward a holistic, end-to-end view of the customer if they want to keep up.
Customer-centricity may not be new to retail, but it is far harder to achieve in this era of commerce. How do you put the customer at the center of your experience when that customer is constantly on the move? While addressing this is likely one of the challenges CCOs face, it’s actually something every commerce team member should be thinking about.
Reconsidering how you look at your customers
Every path to customer-centricity begins with data. According to McKinsey, data-driven organisations are 23 times more likely to acquire customers, six times as likely to retain customers and 19 times likelier to be profitable.
And while nearly every retailer has some sort of data strategy, there are often gaps within them. Some retailers capture too much data (without knowing what’s useful versus what’s not), others don’t capture enough and some can’t make use of that data because it’s in so many siloes.
But in a world where customers’ wants, needs and expectations change by the minute, data is often your most useful source of information. You need to maximise its potential. Even if a “good enough” data strategy has gotten you to where you are today, you need to think of data as the foundation of the house you’re building. The cracks you ignore now will bring the entire infrastructure down later.
As you evolve your e-commerce strategy to keep pace with today’s changing customers, start by taking stock of your plan for data capture.
- What are you collecting?
- What do you need? What do you not need?
- How can you unify disparate data into a single view?
- And critically, do you have the right data to build a lifetime customer view?
While having a 360-degree customer view was once the holy grail of retail, it now falls short in addressing the changing nature of customer behavior that retailers are grappling with today. Instead, begin thinking about the customer in the context of an entire lifetime they experience with the business — not a session, a cookie or a device. This approach includes a robust view of real-time customer and catalog data — the intersection of who your customers are, what they want to buy and what you actually sell.
Another case for AI adoption
Achieving customer-centricity in today’s digital landscape is not a simple task and requires adding customer-focused roles at the C-level. But not every retailer can create a new executive position, which is where AI comes into play.
AI will enable the speed and scale needed to keep up with your ever-evolving customer — even as headcounts and budgets shrink. It will take the data strategy you’ve honed and use it to adapt the customer-facing experience in real time. For example, auto-segmenting customers to target them with the right content based on what they’re likely to buy or personalising an email campaign with product recommendations for items actually in stock. It’s not enough to just deeply understand your customer — you must reflect that understanding back to them throughout their shopping journey. AI can help do that for your millions of customers.
Retailers probably don’t need to hear another case about the importance of AI, but here it is anyway: you need AI to keep up with your customers.
A changing customer means a changing strategy
Shifts in customer demands and expectations have always been the norm for retail. It’s how fast those demands and expectations spark change in e-commerce strategies, like the rise in CCOs. Consider how quickly generative AI, like ChatGPT, upended consumer behavior, shifting expectations for information search and expertise. Who knows what will be next? There is only so much retailers can prepare for, but a solid foundation of data and AI certainly puts them at a greater advantage for managing whatever may come. If customer-centricity is important enough to warrant a seat at the executive table, it’s also important enough to warrant a fresh look at your e-commerce strategy.