The cultural challenge in retail digital transformation – my unexpected case study

This Christmas I moved into the 21st century and did my shopping online. In a two-hour period I ordered presents from three online companies – Amazon, Booktopia and a storefront retail company who sell online.

This Christmas I moved into the 21st century and did my shopping online. In a two-hour period I ordered presents from three online companies – Amazon, Booktopia and a storefront retail company who sell online.

A large focus of my current role is enhancing capability of our sales teams, but lately I’ve developed an interest in the wider end to end customer experience – customer journey, empathy mapping and touch point mapping. I’ve also been working with a team at the forefront of digital innovation – both interesting areas for me.

So – this Christmas – unbeknownst to me, when I placed those online orders my two relatively new interest areas – digital transformation and customer experience and my long-term interest in change management came together. I had a real life case study. I have to admit the plan at the outset wasn’t to write the case study… but as the saga continued I could not help myself… it is an honest account warts and all (including my warts).

I outlined the customer journey of the traditional retailer and one of the digital natives. Then I listed the touch points with some recommendations. I sent my journey and recommendations to the traditional retailer. Not that I’m holding my breath to hear back. Happy to share if you are interested.

I’m going to say that if I was not shocked, I was at least surprised at the difference in the customer experience between the two digital natives and traditional retailer selling online. I had made the assumption that being a large and well-known retailer the shopping experience would be similar. This turned out not to be so. There was a failure at almost every customer touch point – and there were a lot of touch points (at last count 17 interactions across seven touch points) – culminating with me being asked four weeks after I placed the order to drive to a store 20km away to receive a refund for my undelivered online order.

When I looked at the interactions, there seemed to be some supply chain, IT, documentation, process and ownership problems. But underlying all of these – and I’m the first to admit this may be a big jump based on the analysis of one purchase (though I suspect I’m right) – is a cultural issue.

The Robin Report article Why Cultural Transformation is the Ultimate Retail Strategy suggests that “the underlying story behind any retailer failure goes beyond being a casualty of changing shopping habits. Rather, it is often centered on mismanagement, misalignment, technology gaps, politics among a chain of merchants, digital marketing and commerce teams, finance processes, store operations, and sales associates.” The article goes on to say while some improvements have been made recently, most retailers still have a fundamental culture problem. Too often, factions within the business are still fighting yesterday’s battles and losing sight of the consumer.

So how does this relate to my experience with the traditional retailer? My experience provides a beautiful case in point for the Robin Report article. The politics amongst the chain of merchants were not hidden from me. I initially lodged my non-delivery complaint by phone to the online team. My case was handed over to the store that shipped my order. I was told by the store manager that they would refund my money out of the store’s own account ‘even though it’s an online order.’ I was also told several times that ‘we can’t do anything till we speak to the online team. This is an online order.’

I was regarded as an online customer, not a customer of the wider business – and certainly not a customer of the store. And because I wasn’t a ‘real’ customer of the store – my problem was an inconvenience forced upon them.

So it would appear:

  • the store really had not bought into the transition
  • there was some friction between the online team and the stores, and
  • some finance processes made the store unhappy – no doubt exacerbated by the franchise model.

And somewhere in the middle they lost sight of the customer.

The retail chain has some store cultural gaps to address. But is this isolated to the stores or indicative of a wider, more fundamental cultural problem?

Again – I’m making a large assumption here but I suspect it is indicative of a wider cultural problem. There were fundamental problems in the supply chain and documentation processes that indicate a lack of understanding of customer expectations going well beyond store employees.

For example, when I received my shipping confirmation it said “Leanne your order xyz is shipped. Your order is complete.” In fact it was far from complete. It may seem semantic – but these four words are quite symbolic. When a customer has paid and leaves a physical store with the goods, the order is complete. When an online order leaves the warehouse or store – the most important part of the order is actually just starting – shipping it seamlessly to the customer.

For traditional retailers – customers that walk in the door are part of the DNA. Processes, procedures and underlying values are based on that one customer type. It’s a tough ask to transition a company that has focussed solely on walk-in customers since inception to an omnichannel environment. It requires not just the customer facing teams – but all teams from leadership down, to understand why the company is making the transition, what’s expected and to really understand the needs and requirements of the new customer type. And buy into it.

The cultural challenge is further exacerbated when most of the revenue is generated initially by store sales… How do you transition people to believe that other channels are just as important to the brand and the future? It’s not easy – the cultural change first needs to be recognised, and then addressed.

It was fascinating to me to compare and see the difference. I’ve ordered from two companies who live and breathe online. Ordering from the store retailer felt like I had ordered from a company who has been forced into the online space but really doesn’t want to be there. The difference was that stark.

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