Physical Spaces Find A New Purpose In A Digital World

China is set overtake the US as the largest retail market by the end of 2016, with retail sales approaching $4.9 trillion. In the Customer Experience Takes Center Stage In The Future Of Retail report, we outline the forces that are reshaping China's retail landscape and driving this massive growth. A handful of Chinese internet giants — Alibaba, JD.com, Baidu, and Tencent — are battling to gain dominance in online-to-offline (O2O) commerce and local services, logistics infrastructure and last-mile delivery, fresh food eCommerce, and cross-border eCommerce. Consumers in metro China have quickly grown more sophisticated, demanding consistent, high-quality interactions with brands. To further improve customer experiences and grow sustainably in China's retail market, successful retailers:

  • Fuse the online and offline worlds. O2O strategies draw customers from online channels to physical ones and vice versa. The ultimate goal is to blur channels and create seamless omnichannel CX. Customers don't think in terms of channels, and you shouldn't either. CX pros must work closely with enterprise architecture pros to break down data silos and build agility across systems, processes, and organizations in their company.
  • Prioritize their CX improvement efforts to achieve greatness. Chinese retailers are meeting customers' basic needs more easily and effectively. But a deeper look into Forrester data indicates that these improvements are not enough to move the needle from neutral to positive in terms of how customers feel about the overall experience. In order to increase customer loyalty with CX, retailers need to generate more positive emotions and fewer negative emotions with personalization capabilities, customer service and support, and loyalty programs.
  • Evolve to deliver whole experiences. The retail shift toward digital channels and away from physical stores has created serious challenges for traditional retailers and shopping mall operators. Are brick-and-mortar stores doomed to extinction? Hardly. Smart retailers understand that the explosive growth of eCommerce is not a zero-sum game. The experiential strength of physical stores, with their touch-and-feel experiences and more intimate customer service, is hard to match in a pure online environment. Shopping as a lifestyle experience is already a reality among consumers in metro China, who increasingly engage in window-shopping (known locally as guangjie) and allocate more of their income to leisure and entertainment. Forward-looking CX pros create lifestyle destinations and multisensory experience stores that deepen emotional bonds with customers.

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