The digital revolution gives retailers greater influence on the customer’s decision journey, but also increases the customer’s requirements.

It goes without saying that buying is a lot more than a single transaction between the customer and the merchant. In fact, buying is only one step on journey that the marketing pros at McKinsey call the consumer decision journey (CDJ).

One may pass the stages in an instant, or it can take years. Regardless of the walkthrough speed, the consumer’s journey always consists of five steps.

  1. Consideration. Preliminary information is collected and an initial set of brands or products selected for further consideration.
  2. Evaluation. Brands or products are compared based on the data collected.
  3. Purchase. The buyer decides what to buy, where to buy and how to receive the delivery.
  4. Experience. The buyer responds to the purchase and interacts with the product or brand.
  5. Loyalty. The buyer decides whether they will select the same product or brand again.

In the past, the stages of this path were hard to follow and influencing users was expensive and not always very efficient. This was simply because retailers lacked the suitable technology. Basically they could buy ads in the newspapers on and television, print product catalogs and hope for the best.

Digital revolution has had a huge impact on all of this. Suddenly people are walking around with smartphones and tablets, and things like NFC payments have become a reality in stores. Commerce has become truly multi-channel, or omni-channel, or whatever the latest buzzword happens to be.

Digital technology affects everything

Let’s consider the customer path we defined from the perspective of digital tools. Let’s start from the first phase – consideration. How is the preliminary information collected nowadays? Mostly through search engines, of course. And the search engine rankings are something that brands can affect by utilizing search engine optimization and marketing.

The next step is to compare the brands based on further information. Basic source for this information are, of course, the product pages in the online store. Important factors influencing the purchase decision are reviews and recommendations other people have posted online. The features and prices of products can also be compared through several online services dedicated to this purpose.

Purchases increasingly made online and picked up from a physical store. According to McKinsey, in France, for instance, more than 30 per cent of consumers buy products online and pick them up from stores. The response to the purchase occurs also more publicly than in the past. In France, nearly 25 per cent of consumers write product reviews or comments on the retailers’ social media sites.

The success of the company’s multi-channel approach dictates whether the customer will choose the same company next time. For retailers, the new tools and services provide excellent opportunities to strengthen customer loyalty and to increase sales doing, for instance, targeted after-sales marketing.

CDJ in practice

McKinsey provides an interesting example of modern CDJ in practice. A woman sees a nice looking bag at a party and decides to buy one. She takes a picture of the bag with her smartphone and uses Google to find the brand website. The site features a virtual showroom that she uses to add the bag to her pictures to see how she would look with it, and then she shares the photos on social networks to get the comments from her friends.

The woman can still choose to customize the bag on the website. After this, she places the order, selects a delivery point nearest to her apartment and pays the order online. In the next morning, she walks to the delivery points and picks up her brand new bag. As a final step for her CDJ, she writes a comment about the purchase and bag to Facebook. The brand approaches her within a few weeks by offering a personalized hint about some clothing that would go perfectly with the bag.

New kinds of risks

As we can see, digital technology and multi-channel shopping place great demands on business, but at the same time they offer enormous opportunities. The companies that will succeed are the ones that can make things work cost-effectively and offer a unified brand experience to customers across all channels.

There are also risks. The biggest one is perhaps the fear that multi-channel approach is too expensive and will eventually eat up the benefits gained from it. A lot of money will go, for example, to the continuous renewal of IT systems, training and recruiting new staff, as well as developing stuff for endlessly changing mobile devices.

In addition, consumer behavior combined with social media brings great risks. Studies have shown that in the UK the multi-channel customers spend more money than the customers who buy from the store. The downside to this is that when customers get used to the easy multi-channel approach, they can get easily disappointed if things don’t always work perfectly. Nowadays, disappointment is often not just a private matter between the consumer and the retailer, but something that is shared in the social media to the whole world.

Integrations are the key to success

How to succeed? First what is needed is information – information about customer behavior. Money and resources should be focused on where the potential buyers spend their time. Information can be used to target marketing and hence improve conversion. There is no point in spending large sums of money on, say, ads in television or print magazines, if people can be better reached online.

The company needs a clear strategy that prioritizes the different channels, their relationships, the process connected to each channel. Strategy for each channel should take advantage of the whole CDJ. For example, a furniture company can offer on its website a service that allows users to design virtual rooms and choose their furniture (consideration phase). Then the user has the opportunity to easily create shopping list of the products they have selected for room, and proceed to checkout (purchase phase).

It is essential that all business systems (e-commerce, ERP, CRM, etc.) work together smoothly and cost-effectively. From the consumer’s point of view this means that product information is up-to-date in all channels and they receive only the right kinds of messages at the exact right time. This all requires an agile and intelligent e-commerce platform that is integrated to the company’s business processes.

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