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Omnichannel Entropy from a Customer Experience Perspective: Macy’s Journey

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The traditional (and now universally accepted as outdated) model for multi-channel support looked something like this, with differences primarily between the types or number of channels:

However, as customers became digital and mobile, the model has shifted to something like this:

This model originated with marketers and retailers, where omnichannel means the ability to purchase in the physical store, online, via the phone, or mail order. However, as channel technology matures, as markets are disrupted by new economy brands and, above all, as customers radically change their behavior, the omnichannel relationship between customers and brands has also evolved from this simplified understanding. The current picture resembles a unified environment, allowing fluid migration of customers across interlinked channels, easily switching between self-service and assisted support, live and virtual agent, digital and non-digital channels.  

From Channel Proliferation to Channel Entropy

When, at the end of 2016 and early this year, we conducted our study of multi-channel customer experience, voice search was hardly on the radar. Very few CX vendors were looking to the space and there were no implementations. Today, an increasing number of providers and their clients are planning pilots or already running implementations over Amazon Echo and Google Home. They have recognized that the opportunities of the channel are significant, while its adoption is rapidly growing: from the untapped market of users without ability or skills to operate the traditional GUI of the internet, to the fact that voice search has a captive audience, required to link their account information.

At the same time, when we looked at voice, which had been predicted to all but disappear in the contact center over the next few years, the reality of outsourcing providers and clients shows that, while in steady decline, voice will remain the largest part of their revenues and more than half of their interactions until 2020. As voice calls move to chats and simple, repetitive interactions become automated, calls handled by agents become longer, more involved, and more complex. This entropy is affecting most channels, creating new use cases and addressing new customer needs – and at the same time, making the consistent customer experience across channels more difficult.

Macy’s Omnichannel Journey

In the retail sector, the significant adoption of online discovery, buying, and support, makes achieving this balance even more prevalent. For Macy’s, which manages three separate brands with unique identities and customer focus, the combination of 825 physical and speciality stores, voice and digital channels for sales, customer care, and collections across several service lines and products, the key factor when enabling a new digital channel is making sure it resonates with the customer. The company has had chat support for over seven years and has introduced social media in the last two, but still the majority of the traffic continues to come from voice.

Consistent with the market, Macy’s is seeing an increase in chat and social media interactions, reflecting changing customer expectation. While Macy’s customers may differ in their preferences for self-service or live assistance, voice or digital, they are all having less time to spare, are almost always connected, demand greater personalization, and expect frictionless service. As a result, social media and chat are a big part of the company’s future sales and support strategy.

In addition to customer care, Macy’s currently uses proactive chat for cross-selling and conversion on its websites, and earlier in the year has officially launched a virtual agent. The chatbot was developed with Microsoft, and piloted in June for the desktop checkout web page, answering the top questions identified from live chat data. The bot has now expanded to the mobile version. Although in the early stages, the trial has shown consistent customer effort scores, resolution rates, and acceptance by users. Macy’s is now looking to expand the bot to social messengers and other sections of the FAQs.

Analytics, Automation & AI: Key for the Next 3 Years

Macy’s forward-looking and cautious approach to channel enablement is reflected in many of the client interviews we conducted for our multi-channel and retail and CPG customer experience studies. As shown in the graphic below, clients are predominantly satisfied with the multilingual capabilities of their providers, and their experience in reducing costs, implementing new channels, and creating dedicated centers of excellence for them. However, vendors are not yet meeting expectations in delivering effective benefits in the areas of analytics, RPA, and AI. 

Client satisfaction with a range of CX benefits compared to their future importance 

 

The omnichannel environment creates an enormous amount of data, which a human analyst and traditional statistical tools cannot process. The leading CX vendors realize this change and are actively investing in the space. Ability to use machine learning algorithms, to deliver real-time insights, and to automate contact center processes will be the biggest differentiators in the near future, not just for outsourcing providers but for all CX organizations. From a channel perspective, it means that whether a brand is using chatbots or video or remaining primarily voice, these capabilities are needed to provide a true unified channel experience.

 

On 28th September, Brian Stout, Senior Vice President Omnichannel Support at Macy’s Department Stores, and Ivan Kotzev, CX Services Lead Analyst at NelsonHall, recorded a buy-side webinar: Macy's Omnichannel Journey - from Voice to Chatbots. The webinar is available for NelsonHall’s Buyer Intelligence Group members. For membership details, contact Vicki Jenkins.

 

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