Reshaping the customer experience with tech innovations

Digital Reinvention
02/03/2023 Article

Every business owner knows it: to succeed in an ever-changing world where competition is global, managing to create a meaningful, positive relationship with customers is key. Which many have done by building a quality customer experience and relationship management system.

However, these last decades of technological innovation and global change have also shaken to the core the way companies relate to and communicate with their customers.

The rise of social media and e-commerce have been key players in this transformation, to which some businesses are still adapting, meaning to grasp the details and stakes at the heart of the digital revolution.

With the recent health crisis, the need to understand how the digital and physical worlds interact in customers’ habits has become more crucial than ever. How do businesses adapt? What technologies are called for to succeed from the multiplication of e-commerce and digital experiences? What does the future of customer experience (CX) look like?

These are questions that were asked to Luka Brekalo, Global e-Commerce Director at L’Oréal and alumnus of ESCP’s Master’s in Marketing & Creativity, and Michael Haenlein, marketing expert and professor at ESCP Business School.

Global innovation, global change: a new order for retailers and e-merchants

As the digital world develops, more and more of our everyday interactions are moving online. In that context, social media, customer reviews, online purchasing and all the collectable data that comes with play a key role in the transformation of our communication models.

A transformation retailers and other businesses have to embrace to not be left behind in the customer-centric era.

Players such as beauty industry leader L’Oréal cannot ignore the constant need for adaptation, as Luka Brekalo tells us: “Now more than ever, agility is key to enhance the consumer’s experience online and win the buy box in an increasingly competitive environment. As the category and market leader in beauty, we are constantly reinventing ourselves and optimizing the consumer experience, which we see as every point of contact we have with our consumers and the interactions they have with our products or services. It is undeniable that the pandemic has been a catalyst for changes within the consumer experience, especially with regards to the shift to e-Commerce. ​​To win on platforms like Tmall and Amazon one must decode their algorithms, which has become a real science, and the algorithms are changing as we speak.”

And indeed, new technologies, coupled with the massive change to our global context that arose in March 2020, have created the need for innovation compatible with the customer’s needs and desires.

Innovations that integrate virtual reality or provide reassurance to advice-seekers. “A great example of how we adapted to this new deal is the rise of Social Commerce and successful live-streaming cases in China. With outstanding expertise, we have been delivering live-shopping experiences, involving dermatologists and beauty advisors. Hereby proving that a personal consultation can very well happen online. Furthermore, with our digital services from Modiface we are engaging directly with our consumers at scale, supporting their decision-making process while inspiring them based on their needs, and in this way optimizing the consumer experience.”

Nowadays, even as a small company, you are able to do things that 10 years ago were not even possible for very, very large firms. I think every company should check what is being said on their business at least once a week.

Michael Haenlein

Customers have a say more than ever

In the realm of customer experience and customer relationship management, internet reviews are another game-changer, giving everyone with an internet connection the opportunity to speak their voice and share their experience of a product or brand.

This is something that is determined to shape the way brands interact and communicate, according to marketing expert Michael Haenlein: “Nowadays, even as a small company, you are able to do things that 10 years ago were not even possible for very, very large firms. Information and reviews, from which derive trends, are very easily accessible. I think every company should check what is being said on their business at least once a week.”

However, it seems some companies, even amongst the biggest of them all, have a hard time putting that piece of advice into practice, as Michael Haenlein demonstrates: “In December 2021, Chanel decided to launch a high-end advent calendar for special customers. It sold for something like seven hundred euros, but one of their customers decided to post TikTok videos daily, reviewing the calendar’s content only to find out with the rest of us that all products included were not worth more than 200 euros. Sadly, it took Chanel’s teams as long as two weeks to react to the bad buzz generated by one unhappy customer, and realise the brand was being mocked all over the web.”

The video game industry is now larger than the motion picture industry. There are various ways in which firms try to integrate their products into the gaming experience, whether through online advertising or in-game product purchases. These might well be the premises of in-metaverse marketing.

Michael Haenlein

Super apps, video games and virtual reality: welcome to the future of CX

When asked which innovations will shape the future of customer experience, our experts are both adamant that VR and video games will be integrated into most consumer-centric marketing strategies.

As Michael Haenlein likes to remind us, “the video game industry is larger than the motion picture industry. There is an entire industry surrounding game producers, gamers, streamers, or companies like Twitch, and this whole universe has very specific rules that many firms don’t understand yet. Online mobile games like Candy Crush have created entire universes around themselves. Games are the most downloaded app category. There are various ways in which firms try to integrate own products into the gaming experience, whether through online advertising or in-game product purchases. These might well be the premises of in-metaverse marketing.”

A point of view shared by Luka Brekalo: “We also see an explosion of gaming, as well as of AR/VR. From my perspective, super apps will shape the future in terms of customer experience in a major way. They provide convenience, seamlessness and connectivity. A super app is a mobile app that offers basic services including chat and payments, along with a suite of ‘mini-apps’ from third parties, ranging from stores and restaurants to mobility services. Westerners aren’t familiar with them, but across much of Asia, super apps are the internet. The largest is China’s WeChat, possibly the most used piece of software on the planet. On WeChat, you can pay utilities, hail a cab or book a restaurant, to name a few. A true example of putting the consumers first.”

Even though we are striving to maximize the digital payout, we need to respect human nature and individuals. We make the digital world more human: safeguarding the privacy of consumers, developing responsible AI frameworks based on ethics, values and principles, and avoiding over-reliance on algorithms.

Luka Brekalo

Big data, personalisation and facial recognition: will tech be used to spy on us?

When talking about trending data collection, one might think that companies and brands now have the keys to our minds and behaviours, and, in a certain way, it might feel like firms can now disturbingly spy on customers.

“Technically, thanks to data, some companies know you very, very well. Netflix for example doesn’t need to ask you what you’d like to watch, because they know your tastes very well, but they still do. The truth is that people would not like it if Netflix force-fed programmes, even if relevant. Netflix is able to know when you go to bed and what kind of programmes you like, but the interface doesn’t reveal so because people would get scared. At some point, excessive personnalisation creates negative value for the customer experience,” explains Michael Haenlein.

However, some cases also show that in retail, for example, facial recognition may be used to improve customers’ experiences. “You [companies] can now buy pairs of glasses that embed a camera and a microphone that analyse the facial expression and vocal intonation of the customer, providing information on their emotional state. The facial recognition system can also send information to your CRM database to find out who that person is, and what product they recently purchased. And what you end up with is a message to the salesperson saying ‘Michael is currently entering the store, he purchased a TV two weeks ago, he looks inquisitive’.”

Finally, if tech is playing a major role in the “phygitisation” of our world, L’Oréal expert Luka Brekalo reminds us that certain values will never be obsolete: “At the same time, even though we are striving to maximize the digital payout, we need to respect human nature and individuals. We make the digital world more human: safeguarding the privacy of consumers, developing responsible AI frameworks based on ethics, values and principles, and avoiding over-reliance on algorithms. Consumers are more conscious and demanding than ever, that’s why we need to reinvent ourselves by reinforcing key challenges around sustainability, inclusion and diversity across every touchpoint of the consumer journey.”


This article was first published on ESCP Business School's media, The Choice

Authors

profile picture of Michael Haenlein

Michael Haenlein

ESCP Business School

Marketing expert and professor

profile picture of Luka Brekalo

Luka Brekalo

L’Oréal

Global e-Commerce Director

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