I recently encountered a situation that highlighted how important it is for brands to treat their e-commerce enterprises as integrated business units within their overall operations.
As someone who sees more than a fair share of research about the Internet of Things, technology, mobile device use and e-commerce adoption, I see the change happening – digital is a big part of our lives, and it’s only going to get bigger. Many brands are adjusting with the times. They know they have to. That’s why it’s so surprising to see that others aren’t. Some are even resistant.
But resistance is futile. At some point, any company that wants to succeed over the long term is going to have to adapt. Why? Because their customers—or perhaps the customers they wish to attract—are engaging with brands much differently than they did just five years ago. I have a colleague who takes to Twitter any time she has a customer service issue with her preferred airline. Guess what? She gets a resolution much faster than if she calls the customer service line.
At some point, all companies are going to have to operate in ways that are in line with how consumers live their lives. For many brands, that means integrating their on- and offline operations. If they don’t, they’re going to come up short with consumers.
So here’s my example. For a special Mother’s Day gift, I decided to look at crystal. When I thought about well-known crystal brands, I knew of only a small handful. After looking at Waterford and Baccarat, I found a pendant on the Baccarat website that caught my eye. To ensure quick shipping, I placed a call to the number listed on the site. While on the call, the person I spoke to offered to route me to the company’s boutique in New York, which they said would facilitate quicker shipping.
Long story short, my mom was not a fan of the pendant. So she ventured to the New York boutique to exchange it for something else. Unfortunately, she didn’t see anything she liked, so she asked for a refund. Surprisingly, she was denied, even though the company’s website says the company will grant credits and refunds within 30 days of purchase. As it turns out, however, Baccarat, a 250-year-old luxury brand, operates its e-commerce and brick-and-mortar operations separately. While this is absurd, I can accept it. What I can’t accept, is the fact that I was transferred mid-transaction between operating channels—each of which has its own return policy—without being told about the different policies.
Any retailer that isn’t at least tipping a big toe in the e-commerce pool is missing the boat. And when it comes to luxury retailing, the US pool is huge. In fact, management consulting firm Bain and Co. estimates that Americans spent $73.3 billion on luxury goods last year—more than consumers in Japan, Italy, France and China combined. So where does e-commerce fit in? Late last year, eMarketer estimated that worldwide e-commerce sales would hit $1.5 trillion in 2014, up nearly 20% from 2013.
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Ok, we get it. E-commerce is big and growing at a massive clip. But are consumers comfortable with it and willing to forgo brick-and-mortar shopping for anywhere, anytime convenience? Yes. When Nielsen looked at online purchase intent last August, it found that global intention rates for more than half of 22 different product categories doubled—in some cases tripled—between 2011 and 2014.
So what does this tell us? Companies and brands need to be ready, if they’re not already. The other thing they need to do: Make sure they’re explicit, upfront and very visual about their online operations—especially if they’re different from their brick-and-mortar policies (a phenomenon I hope we’ll see decline over time).
As I thought about my recent experience, I rationalized it by thinking about how old Baccarat is and how set in its ways it must be. I really thought my experience was an isolated one. To my surprise, however, it wasn’t. Overhearing one of my several calls to Baccarat customer service, a colleague mentioned she had the exact same experience with Hermes, another French company with an extensive history. But another colleague noted that it’s not just age-old French companies that are locked in yesterday. He experienced something similar when trying to use a corporate discount while checking out of a Chicago hotel that’s part of the Hilton family. Even though he had made his reservation over the phone, the hotel claimed at checkout that he made it online, making his rate ineligible for the discount.
In each of these situations, the big companies held all of the cards. In the long term, however, they’re not going to hold any cards. From a customer experience perspective, I’ll never consider Baccarat for another purchase. And I bet my colleagues would take similar stances after their experiences.
The sad part in all of this, however, is that the issue really has nothing to do with technology or multiple operations for a single brand. Rather, it’s about customer service and one basic premise: The customer is always right. Even though we know this isn’t always true, we do know that it takes a lot less effort (and money) to keep a customer than it does to regain one.