How the New Normal Impacts Retail

How the New Normal Impacts Retail

How the New Normal Impacts Retail

Contact center customer service issues, best practices, and trends

Since the dawn of direct-to-consumer retail, customer service has separated leading retailers from laggards.

As retail matured and transitioned from brick-and-mortar to online, the contact center’s role in the customer lifecycle gained increasing importance.

In today’s post-COVID-19 pandemic world, the contact center continues to be the “front office” for brick-and-mortar and online retailers.

Pandemic-Driven Retail Challenges

Retail customer service contact centers have always experienced challenges. Implementing consistent omnichannel strategies, hiring for seasonal ramp-ups, staying abreast of new technologies, and wowing customers to build brand loyalty are just some of the long-term matters they have to cope with.

COVID-19 introduced an entirely new range of issues, impacting various industries differently. Some, like travel and hospitality, suffered deep cuts.

Conversely, volumes soared for digital-first retailers and IoT (Internet of Things) companies like Amazon, Uber Eats, Instacart, and many others.

One study found that customer support requests for industries such as retail and eCommerce increased by an average of 48% since late February 2020.

Hold times increased as well — as much as 50% — as contact centers were overwhelmed by both high inbound call volumes and staff shortages, forcing frustrated customers to call back multiple times to reach agents. Calls were also more complex, as customers attempted to resolve all their issues in one interaction, exacerbating these problems.

Meanwhile, companies struggled to keep employees safe by sending them home while at the same time hurriedly implementing security and compliance protocols. And many organizations rushed into stopgap solutions.

The reasons for these disruptions are easy to understand.

The world suddenly faced an unprecedented global crisis, leaving nearly everyone, including retailers, ill-prepared to deal with the fallout.

Now that we have crossed into the post-pandemic stage, retail has entered what many are referring to as the new normal.

Several questions linger:

  • What issues remain from COVID-19’s onset?
  • What best practices can contact center leaders employ to address them?

Finally, what trends can contact centers expect to encounter going forward (see box)?

The New Normal Issues

Customer service issues in retail today center around the following six factors.

1. Supply Chain Delays

The supply chain issue started during the pandemic with the shutting down of ports and factories, drastically slowing the movement of goods.

However, these problems continue due to stronger than expected consumer demands. And they are getting worse, not better.

Ultimately, the supply chain crisis is a customer service problem.

According to Project44, which tracks global supply chains, shipment delays between China and major U.S. and European ports have quadrupled since late March 2022.

The supply chain is also being stricken by environmental conditions and by traffic congestion as people returned to offices and stores.

The Russia-Ukraine war is also having an effect due to blocked shipping lanes, although it’s too soon to know how it will impact retail.

Ultimately, the supply chain crisis is a customer service problem. Shipment interruptions have resulted in an uptick in WISMO (Where Is My Order?) customer inquiries about delivery delays, product availability, and returns.

2. Labor Shortages

As if the shipping crisis isn’t enough, labor shortages are rampant.

Hiring and staffing in brick-and-mortar retail stores are abysmal. Look around your average retailer today. What do you see? Long lines at checkout and customer service kiosks.

Businesses have been forced to cut back hours or temporarily close locations to offset the imbalance. Many have added self-service checkout options in response.

Delivery carriers are also understaffed, causing “last mile challenge” shipping and delivery delays. Business Insider says that FedEx reroutes up to 600,000 packages daily because there aren’t enough staff to process them.

Retail contact centers have also fallen victim to labor shortages to the point that workforce staffing company Salem Solutions called agent attrition the “biggest threat” to contact centers in 2022.

Salem attributes the problem to record low unemployment, a job market friendly to job seekers looking for better pay and benefits, and the gig economy’s lure of flexibility, autonomy, and advancement opportunities.

The problem is not going away any time soon. Salem expects high turnover rates to continue for the foreseeable future.

Agent attrition is not a new issue. CustomerServ dives deeper in this article from January 2019.

3. Longer Hold Times

Combine supply chain delays with increased customer demand and the contact center labor shortage, and what do you get? Continued problems with extremely long hold times as agents try to resolve increasingly complex customer issues. Bloomberg says hold times have as much as tripled in recent months.

4. Rising Inflation

Consumers are experiencing price shocks everywhere, from the gas pump to the grocery store and to retail shopping. Rising costs force companies to reprioritize needs with everyone looking hard at ROI.

A new study from Invoca, an artificial intelligence (AI) technology company, finds that as inflation increases, so do customer experience (CX) expectations. Although people are shopping mainly based on price, the study says that 63% of consumers are willing to pay more for great customer service.

5. Technology Shortfall

Despite the industry’s avid adoption of AI and automation, technology isn’t a panacea. Problems remain.

Call deflection strategies using AI and bots are designed to deflect calls to live agents. But is call deflection working?

According to Mindful, a CX technology company, deflecting voice calls can appear to reduce call volumes and workloads in the short term but damages the predictability of contact volumes and customer sentiment over the long haul.

Alternative contact channels — email, chat, SMS — also suffer from service level issues and longer than usual response times.

And even though customers can benefit from technological advancements, many still prefer speaking with someone to handle their problems.

6. Customer Service Apathy

There is a general sense that the customer doesn’t matter anymore, and companies are doing a subpar job of delighting customers and ensuring repeat business.

With inventory shortages, shipping and logistics challenges, rising costs, and evolving consumer behavior, retail brands can’t afford such apathy; consumers have more options than ever.

The cost of poor service is high, too. According to Zendesk, roughly 61% of customers say they would switch to a new brand after one bad experience.

Retail Customer Service Best Practices

Identifying retail customer service contact center problems is like opening the proverbial Pandora’s Box. Closing it requires industry executives to pinpoint a broad range of solutions as no single answer will provide a quick fix.

While retail customer service contact center execs can do little to solve the supply chain issue or curb inflation, they can do their best to ensure customers receive a high standard of care. These seven best practices will help.

1. Replace Apathy with Empathy

One silver lining from the pandemic is recognizing the importance of empathy in customer service.

Perhaps because people sheltered inside for weeks and craved personal interaction, customers chose to engage on a more empathic basis. Average handle time became less of a priority as conversations about shared COVID-19 disruptions preceded the initial reason for the call.

This attitudinal shift needs to continue, accompanied by an intense focus on CX excellence. Serving a customer well in normal times is expected; serving them well during a crisis takes on an entirely new level of importance.

2. Hire and Train the Right Customer Service Agents

Replacing apathy with empathy starts by hiring agents who demonstrate patience, good listening skills, effective communication, and empathy. Coupling these innate abilities with suitable training will prepare agents to independently handle customer inquiries much better.

3. Collect Feedback from Customers After Every Interaction

Collecting customer feedback following each support session is critical for determining customer satisfaction with the contact center.

Furthermore, gathering feedback demonstrates that you value their thoughts and actively listen to identify improvement areas.

4. Lower Agent Attrition

Lowering agent attrition, a perennial problem before, during, and post-pandemic, is easier said than done — but severe labor shortages leave contact center executives with no choice but to find ways to reduce attrition and increase retention.

Prioritizing employees by providing proper training, tools, resources, and proactive management support, enabling them to do their jobs well are steps in the right direction. CustomerServ addresses the agent experience and best practices for agent retention in this article from February 2022.

5. Reduce Hold Times

Reducing long hold times is also a persistent challenge. Keeping an updated knowledge base and giving employees quick access to relevant information is one way to move calls forward. Recording calls to identify inefficiencies and finding examples of well-handled and poorly-handled calls to use in training is another, as is using call reports to track performance.

Of course, the best way to reduce hold times is to staff internal and outsourced operations appropriately, scaling to support seasonal swings and peak times. That demands tracking and analyzing data to identify such periods, then adjusting agent schedules accordingly.

If mitigating hold times isn’t possible, use automated systems to let customers know how long they can expect to be on hold and/or where they stand in the hold queue. They can decide whether to wait or call back later.

6. Offer Self-Service Options

Offer self-service options that augment, not replace, human interaction. Customers want convenience, and brands crave the efficiency self-service achieves. But it is only half a solution; customers still want to interact with human agents.

7. Get Rid of Silos

Too frequently, customer support agents are not connected to other departments, leaving them unable to know where to send the customer or resolve the issue themselves. Customers are consequently passed back and forth without resolution.

Retail Customer Service Trends

What is the future of retail customer service contact centers? The trends revolve around five areas.

1. More Proactive Customer Service

As the number of customer interactions grows, customer expectations rise along with it.

The new normal will be adopting a more proactive (rather than reactive) customer service posture. That requires retailers to use AI and predictive analytics to anticipate problems and ensure more positive customer experiences.

The new normal will be adopting a more proactive (rather than reactive) customer service posture.

2. Embracing Remote and Hybrid Workforces

While retailing shifted to a new normal, the contact center industry gained a new normal — the remote call center worker.

Traditionally, agents had to live close to their contact centers. COVID-19 changed all that, making remote work commonplace.

While some companies have instituted a hybrid workforce environment — in-office and offsite — most employees find they like working from home. According to Flexjobs, 58% of remote employees would rather find a new job than return to the office.

Also, with the option to work remotely, a gig economy flourished as people quit low-paying jobs in favor of the flexibility and freedom of working when and for whom they want.

What once was a contact center embellishment has now become a near-necessity. Many of these gig workers are highly trained, skilled subject matter experts that brands can rely on to supplement their in-office staff.

3. Engagement via Social Channels

Customers have used social media for service and support purposes for years. That took on new proportions during the pandemic as customer engagement through Twitter, Facebook Messenger, WhatsApp, and other channels became the preferred method of contacting customer service.

4. Technology Adoption

Retailers relied on BPOs to ramp headcount and become a consultative partner to help create and expand multi-channel and omnichannel contact center support.

Many retailers hadn’t even considered digital transformation strategies until the pandemic forced them to do so because the traditional inbound “voice-only” strategy could no longer support volume and keep up with changes in consumer behavior.

As a result, many retailers have evolved, becoming more digitally savvy (to an extent) with the help and support of outsourced BPO firms.

This technology adoption will continue unabated, taking several forms:

  • Omnichannel support. Customers want to access service and support wherever they are along the buyer journey — the brand’s website, email, chat, and social media. Brands must also integrate channels to prevent customers from repeating themselves (i.e., the left hand must know what the right hand is doing).
  • AI and automation. AI, including natural language processing (NLP), will transform and modernize many tools and processes contact centers use daily, likely becoming a dominant force.
  • Conversational IVR. Traditional interactive voice response (IVR) systems have long frustrated customers. But conversational IVR is growing in popularity. The technology uses AI, NLP, and machine learning to analyze what customers say and route their call to the correct department. This advancement saves time, reduces frustration, and provides a better experience for customers and agents.
  • Cloud-based services. Cloud communication allows agents to work from any location and access the customer data required to execute day-to-day tasks. Cloud-based services can also improve data security and save money on traditional on-premise IT architecture.

5. Unprecedented Outsourcing Demand

The COVID-19 pandemic’s ravages left retailers with no choice but to outsource customer service. Grand View Research found that the global BPO market size, valued at more than $232 billion in 2020, is expected to register a compound annual growth rate of 8.5% between 2021 to 2028.

We learned throughout the pandemic that retail and customer service contact centers are mutually interdependent.

Outsourced and internal remote agent contact center operations were among the few channels that remained open and available when businesses shut down or shifted operating models. They were a lifeline that helped retailers stay afloat during turbulent times, buttressing all the pandemic-borne issues and increased consumer demand.

Nick Jiwa

Nick Jiwa

Nick Jiwa is the Founder and President of CustomerServ, a leading call center outsourcing ecosystem and advisor. Nick is a pioneer of the call center industry, and a thought leader with over 30 years of experience helping companies outsource smarter.

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