Data and psychology must work together to create the best CX

Digital retail is more competitive than ever before. Customers are making decisions based just not on brand loyalty, but factors such as delivery, returns, ways to pay and – crucially – user experience. Creating an engaging customer experience at every stage of the online journey has become vital to maintaining a competitive edge.

Retailers have woken up to the fact that data and analytics play an important role in delivering the easy, fast and personal experience that customers demand, driving higher satisfaction and loyalty. But data cannot deliver this in isolation. Only when it’s combined with a deep understanding of customer psychology and behaviour do you truly have all the magic ingredients in place for a great digital retail experience.

At Shop Direct, we use data to create the best possible user experience for Very and Littlewoods customers in two key ways: understanding them better overall and personalising how we interact with individuals.

For the first point, we use text classification models developed in house to extract data from thousands of responses to our NPS surveys. They determine positive or negative sentiment then record specific topics mentioned, such as delivery times or product fit. By tracking these measures over time, and filtering the data for strategic customer groups, we use it to make decisions or monitor how changes to a particular element of the customer journey have affected experiences and brand perceptions.

We also use data to personalise interactions with individual customers throughout their online journey. One example is using machine learning algorithms to make decisions about how to personalise marketing communication, for example what email subject header they’re likely to respond to or what product category promotions would be of interest. We also analyse data to offer bespoke product recommendations on our websites, based on what a customer is currently browsing or has in their basket.

All of this takes place in tandem with extensive work to deepen our understanding of the ways in which our customers think and behave. This is essential to identifying opportunities to improve both user experience and outcomes for customers and our business.

The in-house user experience (UX) lab we launched at our Liverpool head office in 2014 remains central to this. The lab allows deep dive observational research into usability issues and customer behaviour. It features a living room-style space in which customers carry out tasks and a viewing room in which our UX experts and product squads observe customer behaviour then collaborate, debate and innovate. Hundreds of experiments have taken place in the lab to date, testing everything from in-flight delivery tracking to product discovery and creating tangible innovations such as Very Assistant, our in-app chatbot.

We increase our reach through remote studies, sending bespoke surveys out for our customers to answer in their own homes. This allows us to explore attitudes and behaviours on a wider scale. Likewise, customer panels play an important role in our psychology research. Instead of asking customers to come to us, we’ll go to them and where they want to talk, such as virtual panels on Whatsapp. When we need results quickly, ‘Guerilla testing’ comes in useful. This means talking to customers in their natural environment, for example quick fire tasks in a coffee shop, through which we gain instant, same day findings.

When our psychology and behavioural research identifies a change that could improve user experience, we use A/B testing to compare behaviours between two or more different experiences live on site. This confirms that a change we’ve made has caused the impact subsequently observed, and allows us to monitor the value created from a customer and business point of view.

Ultimately, customers will only become more discerning as digital retail continues to grow and evolve. Retailers can’t afford to sit still. Those who combine a focus on data with in depth understanding of customer behaviour will be best-placed to deliver a strong user experience and maintain a competitive edge.