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Thought Customer Service At The Beginning Of The Pandemic Was Rough? Just Wait For The Busiest (Digital) Holiday Season In History

A CCW (Digital) Analysis

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Matt Wujciak
10/02/2020

April 29th, Deloitte Insights writer, Kristen Pettersen accurately states in the Wall Street Journal’s CMO Today:

“COVID-19 has brought extraordinary challenges worldwide. For contact centers, it started with a recipe for chaos: Many were forced to close their physical workplaces at the same time that call volumes skyrocketed. As the crisis has unfolded, customer service has taken on new meaning and importance, as representatives respond to customer concerns against a backdrop of uncertainty.”

In a Q&A, Deloitte Consulting LLP’s Andy Haas, service transformation leader, and Tim McDougal, contact center offering leader, interestingly talk about the pandemic’s effect on contact centers and how marketing leaders can support unprecedented digital transformation. 

McDougal: “Initially, the increase in call volume was unprecedented across industries, with some experiencing exponential growth almost overnight. In travel and hospitality, volume was so overwhelming that some contact centers were forced to post messages for customers to call back in 72 hours. At the same time, capacity at many contact centers dropped dramatically… Even under normal circumstances, a good deal of art and science goes into figuring out capacity and workforce. Now, contact centers can’t use past data to predict call volume, which remains high, particularly in health care, government, and financial services. The net result is long wait times for customers.

Haas: “The rapid transition to virtual workplaces has been difficult and has exposed critical shortcomings in older technology and business continuity plans.” 

“…Though contact centers are still squarely in response mode, leaders are planning ahead so they can generate revenue as they enter the recovery phase. They are rethinking fundamental strategy decisions about automation, technology, and complex service delivery models that are the norm but not necessarily the optimal solution.”

The correlation between remote work, digital communication, and consumer behavior

Fast forward five months and many customer service companies, marketing agencies, and legacy tech companies have filed for bankruptcy or closed the doors indefinitely. However, from a futuristic, macro perspective, there’s a much less pessimistic side to the pandemic’s impact on customer experience that we’ve been talking about from the beginning. 

For example, it’s estimated that the work from home increase has expedited companies’ digital communications strategy by an average of six years, with nearly 97% of enterprise decision-makers stating that the pandemic sped up their company’s digital transformation – remote work playing a large role. 

As CommunityWFM CEO, Daryl Gonos told me in a recent CCW Digital podcast: “We saw it coming… we knew that virtual agent environments where a large majority of employees would be working from home was in the future. We saw that back in 2005, but it doesn’t mean that the distance should splinter the communication and collaboration companies need to thrive.” 

He's right. The pandemic merely sped up many existing trends. 

According to CCW Digital research, now nearly 75% of contact center, customer experience, marketing and customer service leaders are looking to make remote work a more permanent option. And according to KPMG, 68% of CEOs said they will downsize their office space. It is not hard to see why.

Other than the obvious leasing cost/factor of traditional corporate offices, 72% of CEOs believe working remotely has widened their talent pool. In addition, countless studies have shown the productivity increase of flexible working environments. As a result of the pandemic, now nearly 60% of consumers care more about the customer experience and 82% of consumers are more comfortable on digital channels such as chat, messaging, email, and chatbots. (Spoiler alert: these trends are only going to increase). 

We know that customer experience has gone digital, e-commerce and m-commerce trends have been expedited, remote work has increased digital communication exponentially and proven viable for many, and most importantly (or frighteningly – however you want to look at it), consumers are beginning to demand more. 

In fact, a whopping 35% of consumers are now less willing to tolerate typical customer service problems such as long wait times and multiple transfers, according to CCW Digital’s August consumer survey. I despise the (cliche) phrase, but digital customer experiences and exponentially increasing consumer expectations really are “the new norm.” 

And the next few months will tell us a lot about it. 

A consumer holiday frenzy is coming – and it’s worth paying attention to

I wrote back in December 2019 something that I think holds true now more than ever:

Cultural shopping surges centered around holiday discounts like Black Friday and Cyber Monday obviously don’t constitute typical spending behavior for customers. However, as consumers capitalize on deals, temporarily emptying their wallets because they can, there are large quantities of actionable customer data collected and consumer trends worth observing, giving analysts insights for 2020 purchasing trends.

If businesses can identify emerging purchasing trends, they can target consumers at the right touch points to deliver fast and convenient purchasing experiences sparked by strategic advertising and emotional reactions. 

Fast forward again.

SAN FRANCISCO, Oct. 1, 2020 /PRNewswire/ -- Salesforce (NYSE: CRM), the global leader in CRM, just announced new consumer insights and predictions for the 2020 holiday shopping season. 

The company expects digital sales to hit all-time highs and lead to strained shipping capacity as retailers grapple with the impact of the COVID-19 pandemic.

The pandemic has quickly forced many companies to operate at Black Friday and Cyber Monday levels of operational efficiency every day as people moved to digital commerce. As this trend continues, Salesforce forecasts:

  • 30 percent year-over-year growth in overall global digital commerce this holiday season (up from 8 percent growth in 2019) 
  • Total digital sales are expected to reach a new record high of $940 billion globally and $221 billion in the U.S.
  • The surge will likely result in an acceleration of digital commerce to 18 percent of total retail sales globally and 30 percent of total retail sales in the U.S. during this holiday shopping season.
  • Overall holiday sales are expected to be flat despite this digital growth, with an expected $5.1 trillion in global holiday sales and $730 billion in U.S. holiday sales.

 

With the pandemic impacting how retailers will sell and ship gifts, influence the popularity of retail categories and affect delivery timelines, Salesforce predicts:

Fulfillment concerns will overshadow brand loyalty

Shoppers' priorities will be availability, shipping and delivery times, and of course general customer service. Efficient contact centers will have a competitive advantage like never before

Two converging pressures from traditional carriers are expected to arise from the spike in online orders:

  • The overall volume of packages that need to make it from a retailer to a customer's doorstep will likely exceed shipping capacity by five percent globally, potentially delaying up to 700 million holiday packages.
  • Approximately $40 billion of COVID-19 delivery surcharges are expected between November 15 and January 15 globally, as shippers prepare for a massive shift to digital commerce.

Growth in online shopping means an earlier shopping season - and surge in product returns

The combination of Amazon's Prime Day event in mid-October and consumers eager to ensure their packages arrive on time will lead to an earlier start in the holiday shopping season. This earlier demand is expected to shift up to $6 billion of November's Cyber Week volume in the U.S. and $26 billion globally to the month of October. However, Cyber Week digital traffic is still expected to grow by 28 percent year-over-year—a trend accelerated by nearly ubiquitous access from mobile phones and the fact that fewer people will be rushing to stores on Black Friday.

More digital purchases will mean an increase in returned merchandise, customer service inquiries, digital traffic, and call volume. In total, $280 billion in online purchases are expected to be returned globally—30 percent of all purchases made.

To reduce return rates, retailers should use store associates to help guide online buyers to the right purchases. This will be a huge opportunity for live digital support (i.e. live chat and messaging) as well as automated customer support (i.e. chatbots and IVR). Commerce websites should also be revamped to provide comprehensive product descriptions, FAQ pages, video support, etc.

Consumers are predicted to engage 30 percent more with service agents this holiday season. Retailers are equipping traditional service agents and store associates with the tools and skills required to quickly address consumer requests, particularly regarding product availability, shipping visibility and status.

Are you ready?

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For media coverage, lead gen, and digital marketing inquiries, (or to say hi), contact me at matt.wujciak@customermanagementpractice.com, or connect with me on Linkedin.

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