Customer Experience Model Analysis Report

                

The aim of this report is to analyse the Customer Experience Model in a digital context. The organisation I chose for this analysis is Warehouse.co.nz.

To derive a vivid picture of the model, the practical and theoretical perspective of this model has been analysed.

The second three months of the current year, April-June, has shown a sales lift in retail business in New Zealand. Overall, “ strong consumer confidence, low interest rates and rising house prices should continue to support spending," said ASB Bank economist Daniel Smit .

I could say, the Consumer confidence in Online shopping has also increased. NewZealanders' use of the internet has "evolved considerably" to a point where more than half the population is now shopping online, according to Statistics NewZealand. "The fact that more than 1.8 million people made online purchases in 2012 shows that the internet use has evolved considerably from sending the occasional email," Hamish Hill, Statistics NewZealand spokesperson. The major drivers for this growth are , e ticket booking, applications, books ,music downloads, clothes,  Electronics, shoes, toys, glasses, video games , and the list goes on to even matrimonial. Those segments like exotic food, canned and preserved food will be gaining momentum in the coming future on online platforms.

The stake holders benefit by the  way of cost saving in many ways like Communication, staff, and various commercial savings .I coined a formula  for consumers benefit- *4C Makes a big  C, Consumer *convenience, choice, comparisons, consumer reviews.

The Customer experience starts when a need arises in customers mind and flow from searching information, interacting with brands, communicate with consumers, try out products and finally own it. This results in sales and customer loyalty.

The Customer behaviour depends on process of the sites he or she visits, mood, attitude, social and functional interactivity, realistic, sense of being there , presence etc.

The report concludes with the findings from the survey among 3 customers real virtual experience in the online shopping platform.

The gender behaviour is tested and found that purchase pattern of  male buyers are goal oriented and information seeking while female buyers are more of experiential and ” feel good factor” style .

These findings can help marketers to find ways to channel their customers online and offline behaviour to trigger sales.

 The Relevance of Online Shopping business

 It is interesting to learn that, 2.18 million New Zealanders are now buying online and will spend on average NZ$1,859 online in 2013 and this is expected to grow by 14.9% compound per annum for the next 3 years. Online represents 5.9% of New Zealand retail sales. It is  predicted that  online spending would rise to $5.37bn by 2016.

The major reasnons are

Greater variety and choice of goods, Customers seeking greater value for money, rapidly increase usage of smart phones and tablet devices, continued strength of the New Zealand Dollar, increasing level of sophistication and digital awareness across all age groups, use of social media such as Face book and Twitter to drive brand and product awareness.

Internet user Profile

Half of all Internet users aged 25–44 years are doing their reading online, and 76 percent of 15–24-year-olds use the Internet to listen to or download music. Social media remains popular, with two-thirds of the country engaging in social networking, a 20 percent increase since 2009. While the young dominate the social networking scene, you’ll find 1 in 6 Internet users aged 75+ there too. These figures come from the Household Use of Information and Communications Technology Survey, which measures the access to and use of the Internet by individuals and by New Zealand households.

Price factor

The world has become a much smaller place for the 21st century consumer. These days, a shirt with a $300 price tag at a Newmarket shop might be picked up for $150 or less from a web-based store in the United States.

Convenience Factor

New Zealanders had to take a trip Stateside, or to Hong Kong or Singapore, where greater economies of scale have benefited shoppers for decades.But the meteoric rise of online stores such as Amazon, which has reported sales of about US$48 billion ($59 billion) over the past year, have made overseas prices available to anyone with an internet connection and credit card, changing the face of retailing forever.

Global Market

About 34 per cent, or $910 million, of Kiwis' online purchases are expected to be have been made on overseas websites last year, according to research by Price Water Coopers and Frost & Sullivan.

Experience brings customer onboard :

In recent years a number of technologies that permit consumers to search for information, interact with brands, communicate with other consumers, try out products, and buy real and digital products over the internet have emerged. Some examples of these types of technologies include online product simulations (e.g. test driving automobiles, virtually trying-on clothing), avatars [“animated representations of the user”; see Holzwarth et al. 2006]

In South Korea , Tesco has created a virtual store in the subway where customers can order their groceries from a virtual wall . This innovation and convenience has contributed to making Tesco the no:1 grocery brand online in South Korea. It has been suggested that consumers may behave realistically in a virtual environment when the environment has a high degree of realism [Suntornpithug and Khamalah 2010], Brand experience has recently been defined in the marketing literature as the sensations, feelings, cognitions, and behavioural responses evoked by brand-related stimuli that are part of a brand’s design and identity, packaging, communications, and environments [Brakus et al. 2009]. Brand experience has been shown to have a significant effect on consumer perceptions of the brand and purchasing decisions [Brakus et al. 2009]

 The digital is moving into the physical

 Built in collaboration with IBM, the Jaguar Land Rover Virtual Experience is an example of how the physical and digital worlds are merging to reshape the consumer shopping experience. The Jaguar Land Rover Virtual Experience begins with a customer signing in with a tablet device and selecting a car, which is projected on a nearby screen. Motion-sensing technology enables the customer to use his or her body to  control the image of the car and inspect its features, such as opening the driver’s door to examine the interior.

Brand experiences have a significant impact on consumers' offline purchase intentions and behaviour

Recent research from Play Network has revealed that luxury retailers are investing the most into digital technologies in their bid to enhance the customer experience. The research found that the focus for higher-end brands was overwhelmingly geared towards enhancing the in-store experience, with almost all of them (90%) offering in-store video, compared to less than half (44%) of high street retailers.

By staying ahead of the curve, luxury retailers are offering their customers a ‘wow factor’ shopping experience, which sets them apart from the rest of the market.

These virtual environments may offer important advantages over traditional, two-dimensional websites through increased functional and social interactivity, and can provide valuable brand experiences that lead to increased customer loyalty and sales.

Know your customer behaviour

Today’s shoppers have an increasing appetite for new ways of shopping, and all retailers need to adapt in order to remain relevant.

 With Burberry’s sales rising 13% in the second quarter of 2013, they understood their customer behaviour – customers are tech- savvy .They introduced radio-frequency identification (RFID) chips were tagged onto items of clothing to allow customers to interact with videos of said items being worn on a catwalk. Full-length screens and live-streaming hubs were also fitted throughout the store, creating an entertaining and engaging customer experience.

Ted Baker, on the other hand, has identified its core audience to be young and quirky, with plenty of disposable income. Ted Baker’s sales booming by 31% in the five months to June Positioning itself as “no ordinary designer label”, the company has carefully developed its brand’s distinct and quirky style. When asked about the reason for its continuing success, Ray Kelvin commented last year:  “Better product, better design. It’s that simple.”

Virtual environments serve as potential platforms for retailers in understanding and influencing offline purchasing behaviour, in addition to promoting the company's brand and products. It has been suggested that consumers may behave realistically in a virtual environment when the environment has a high degree of realism [Suntornpithug and Khamalah 2010], and when consumers replicate their real identity and existence into the virtual world. Studies have shown that brand experiences and consumer behaviour in an online channel may affect consumer decision making in other marketing channels [Kwon and Lennon 2009]. An understanding of consumer behaviour across multiple marketing channels may provide further insights into how consumers view their multichannel shopping experience and the relationships they develop with retailers

Consumer Real Virtual Experience :

The concept of real virtual interaction is the interlock between Virtual Interaction, Marketing Relationship Strategy, Real Interaction and Consumers Experience.The survey among 3 consumers’ are done to understand the real customer experiences that propel shopping behaviour   in real virtual world, in the context of  ware house .co.nz. The respondents have been asked to define the process ( real interaction) and service brand ( Virtual Interaction ).

Ware house (WH) were able to deliver their brand promise.

Warehouse promise- Everyone gets a -bargain /discount and Making the desirable affordable .To an extent they were successful in creating the wow factor among their online customers .

Enclosed below is the comment from one my respondent, I categorized him as information seeking and goal oriented male customer.“Yes, I think this is a very good site. Plenty of information provided and always shows something which is cheap/on sale” Ash, a frequent online buyer.

Another comment by the second category customer:Female buyer with experiential behaviour .About Briscoes “ Duplicate links to departments (shop by department and the category above in the beginning of same  page ) Instead they could have highlighted some deals based on categories like Top Picks, Great Bargain like Warehouse done in their site , Anisha, Occassional online buyer..

Theoretical Implications:

The experiences and behaviour exhibited by the customers were supporting the theories  suggested and proved by several authors   from the marketing fraternity

The e commerce site that delivered the promise made in the virtual platform in the real world has succeeded in the game. The answers for the theoretical questions like:  why consumers consume? What value the customer got from the brand  are answered practically .The real value is the experience the brand( WH) has delivered by way of Online experiences ( Product Display ), service attributes( filter, sort, Track)  experiential images(Recipes) , functional consequences (payment safety), symbolic images(review comments), etc.

Managerial Implications:

                                                            

These findings can help marketers to find ways to channel their customers online and offline behaviour. For example ,in Briscoes /Warehouse sites if the deals are displayed based on  one’s  previous search history (as both sites have log in) it will help to create tailor made virtual experience in online  platform  .

The goal oriented customers should be provided with distinct search options , educational tool for  information seekers, involvement generating options , positive feeling ,productive experience, required amount of  challenge to provide a memorable  experience .Then only the customer gets the speed or the Convenience factor for his/ her  purchases. Managers need to assess the level of customer satisfaction. The involvement with a particular brand or site also increases when all the above factors are considered by the e commerce designers of organisations.

Conclusion:

The report concludes with the findings from the survey among 3 customers real virtual experience in the online shopping platform.

The gender behaviour is tested and found that purchase pattern of  male buyers are goal oriented and information seeking while female buyers are more of experiential and ” feel good factor” style . Further more , we can conclude that the experience and usage of e commerce is affected by the affective state and the process/ technology embedded on it .