Give holiday shoppers a magical experience: 6 key ways to reduce CX friction to increase online conversions

Signs are already pointing to a busy holiday shopping season. Spending on nonessentials is trending up despite higher interest rates, inflation and a cooling labor market.

As a resident of the Potato State, I had to chuckle when I also read that people are eating more French fries, an apparent positive economic indicator of continued consumer spending.

Household spending (the main driver of economic growth) is strong and outstripping 4% inflation, The Wall Street Journal reports. For example, consumers will increase spending by 7% this year, spending an average of $1,530 for gifts, travel and entertainment, with travel-related spending increasing a robust 12% over the 2022 holiday season, according to PwC’s 2023 Holiday Outlook.

At the same time, there is an undercurrent of consumer hesitation due to headwinds like inflation. Called the “zero consumer,” many people are both saving and splurging, McKinsey & Company found. This raises the bar on the value proposition of offering a customer experience that’s more enticing so people actually purchase what’s in their online cart. The choice for brands is simple: rid the customer journey of friction or risk alienating would-be consumers this holiday retail season.

“We see that nearly 80 percent of consumers are trading down—but 40 percent are also finding ways to splurge.” – McKinsey & Company

All this adds up to the need for retail brands to double down on their core differentiation and prepare for what it takes to provide a stellar customer experience. While that differentiation is oftentimes price, quality, selection or availability, it also boils down to the experience that customers associate with the brand.

Enter a world where technology, personalization and innovation come together to make the holiday retail season truly magical. Through adopting these six strategies to reduce friction in the customer experience journey, you can perfect the art of online conversions and transform the holiday customer experience, while providing a seamless and rewarding path to purchase.

1. Reduce the steps to buy

Friction is the ultimate blocker to online sales conversions. Simply put, friction kills conversion. With that understanding, one of the most impactful things that retail brands can do is to be transparent internally about what the buying process is, to start tackling friction.

You need to have unbiased answers to key questions about your online experience, such as:

• What does it take to quickly find information about products or services that you offer?
• What does it take to complete a purchase from your brand?
• Most importantly, do you know who is buying your products, and what their expectations are?

If you can’t look in the mirror and be real about the buying experience you offer consumers today, it’s difficult to articulate how to get better.

Use the right solutions to benchmark performance using the data you have, including website page views, clickstreams, and visitor information to zero in on where consumer frustration and bounces are occurring. For consumer interactions with your people, you need to be able to run analytics at scale and review feedback for the buying process.

Artificial intelligence (AI) that’s purpose-built for CX can find these valuable nuggets that are often buried in your millions of interactions. Similarly, only with a multi-touch, cross-journey feedback solution can you measure satisfaction throughout the buying process, to glean important insights that would otherwise never be known to you if you only surveyed customers who call in.

When given a choice, consumers will take their dollars to brands that provide similar goods that offer an easier and better overall customer experience, even if they have to pay more. This is especially impactful for brands that lack a one-of-a-kind product differentiation.

At the end of the day, reducing online buying friction (often directly tied to how many clicks or pages it takes to buy something) is one of the most fundamental things you can tackle to make a major difference for customers.

2. Be proactive in a personalized way

Being proactive and delivering personalization should be concurrent CX strategies, yet many retailers are struggling with even doing one of these at a time.

An overwhelming 71% of consumers expect companies to deliver personalized interactions, and 76% get frustrated when this doesn’t happen, according to a McKinsey & Company report. Personalization drives more revenue and more consumer stickiness. In fact, McKinsey found companies that grow faster drive 40 percent more of their revenue from personalization.

Personalization helps remove friction from the buying process. Imagine having the technology to send a consumer an offer that reminds them they bought a pair of soccer cleats last season, and lets them know that there’s a new design this year they might be interested in—before the season starts. With one response from the consumer, the new cleats could be shipped automatically. As international buying habits become more prevalent in the US and younger Americans used to social buying drive more of the spending, this kind of frictionless buying will be a must for every retailer. Not only does this show the consumer that the brand remembers them, it helps get mindshare before the consumer starts shopping around.

In the example above, we also see the brand being proactive, helping capture consumer mindshare as early as possible in the purchase cycle. Additionally, it can also help with heading off potential issues that would end up costing more to resolve and reduce customer satisfaction. In this way, brands that are personalized and proactive in their engagement help consumers see the elevated experiences that result in leveraging data in a powerful way.

Many challenges that brands face with personalization emerge when they choose to focus only on “known buyers” and personalizing service for only that segment. One should keep in mind that it’s possible to be proactive and personalized even with unknown prospects: those who haven’t bought from you yet, especially on digital channels.

For example, brands can use technology to better gauge what an anonymous website visitor is interested in, such as dwelling on a particular new sweater. Being able to read behavioral signals on digital channels can be used to effectively provide proactive guidance specific to what that visitor is doing at that moment in time, even if they are completely unknown and new to the brand.

These capabilities can help reduce friction for the shopper, wherever they are in the buying cycle. Brands that work with NICE have seen an average of 6% increase in conversion rates and a 3% decrease in returns, according to The Total Economic Impact of CXone Guide study by Forrester.

For example, MoneyGram, a worldwide consumer financial services retailer, drove a 17% conversion rate on a large holiday campaign, many times higher than traditional conversion rates. In addition, MoneyGram was able to boost their loyalty program enrollment by 87% during the initial rollout of the technology.

3. Strengthen self-service

You’re likely familiar with “traditional” self-service capabilities in the market—ranging from digital FAQs and knowledge portals to virtual agents (chatbots) deployed on voice or digital channels. These are fantastic technologies, but only if consumers engage with them.

To maximize the impact to the consumer, self-service options need to have the technology to be as contextual and targeted as possible so that consumers do engage with them.

Knowing the context about where the consumer is in the journey or what they’re doing on your digital channels helps you to provide the right self-service options to remove friction.

For example, rather than pushing a generic “May I help you?” type of question from an FAQ or virtual agent, you can deliver content specific to what they’re looking at. This maximizes the chances of the consumer engaging with the self-service technology, while also decreasing frustration that leads to consumers bypassing self-service and asking for an agent.

In this way, brands can enhance the strategies and technologies they may have already deployed to make them more effective. Ultimately, successful brands can drive 90% or more of the total incoming engagements to be resolved and contained by self-service capabilities, with the remainder intelligently elevated to human agents. This helps provide an outstanding experience for the consumer and top-level operational efficiency for your brand.

4. Optimize for resolution delivery

I can’t stress enough again how much friction thwarts your brand’s chances of online sales conversions. This friction can appear at any stage of the online buying journey if you fail to put the right tooling in place.

Let’s look at how friction can continue to be a blocker after a consumer has purchased from your brand. When a customer engages with you to answer questions or inquiries about their purchase, keep in mind that the buying cycle never ends; what you do post-sale directly impacts their further loyalty and repeat business. The most common friction here is an inability to provide the customer with an answer or resolution in a timely manner, based on how they prefer to engage. This can include not having the right self-service options or not on the right channels, and not knowing when to elevate specific questions immediately to a human agent without being prompted to.

Contact center staffing can present another avenue of friction. The challenge is that traditional staffing or forecasting models tend to overstaff by a sizeable margin; in many contact centers, 6% overstaffing has been commonplace in the industry, which leads to a significant labor overspend. Adding to the mix is the rise in digital channels, many of which are asynchronous. This makes it exceedingly challenging for service teams to even know how to forecast staffing for omnichannel operations.

Retail brands can also spend an inordinate amount of money on seasonal agents, adding to operating expenses (OpEx) and eating into margins. While this type of seasonal agent swing has long been the “norm,” it doesn’t have to be this way. By leveraging AI to help with forecasting and planning, brands can drive a big cost and satisfaction impact. For example, NICE has helped customers improve occupancy by more than 10%, reduce overtime hours by 80% and decrease staffing variance by 75%, leading to lower costs but still higher customer satisfaction.

For interactions that escalate from self-service to an agent, it’s important for your customer service team to engage quickly with the consumer and resolve their inquiry faster. This is especially true during the holiday season when seasonal changes or policies need to be top of mind, and when seasonal agents need to be effective faster than normal.

This time-sensitive balancing act requires empowered agents who have the latest purpose-built AI for CX in their toolbox. Agent-facing automation can be critical, ranging from simple knowledge presentation to full desktop guidance on what they should do or say. AI can put your agents on solid footing with the skills and know-how to adeptly handle the most challenging customer needs events.

As a result, with NICE, brands have seen improvements including 50% reduction times in average handle time (AHT), 50% reduction in issue triage and 30% increase in first contact resolution (FCR). More details are here.

5. Get to ‘whole lifecycle’ customer feedback

Many brands still measure feedback at very specific and limited points during the lifecycle. This might be right after a purchase or right after a service call. Additionally, the feedback request often comes in on a very limited set of channels (email or text).

All of this leaves significant parts of the customer journey unmeasured, especially in the top end of the shopping funnel (such as before a consumer becomes a customer). This can leave your brand challenged in having the right information to finetune the customer experience.

By selectively gathering customer feedback across all phases of the customer lifecycle, in context of the channel the consumer is engaging on, brands can get the full picture of what needs improvement. This can paint a picture as to what really is causing friction, which often turns out to be a different cause than assumed.

Additionally, consumers will share valuable signals in one part of the process that they won’t in another. For example, an anonymous visitor browsing a retail site might not find everything they are looking for and abandon their cart. The brand might normally simply reach out with a reminder for them to complete their purchase; however, that visitor may not be inclined to buy at all if they can’t get everything they need. The brand has no visibility into the actual root cause of why the visitor isn’t buying, so they can only guess that it’s the price point or some other factor.

To address this, weave in relevant feedback points contextually across the customer journey. This is where the same behavioral triggers we talked about earlier can come in. If a visitor is showing friction at checkout based on their behavior, engage contextually, and make it possible for them to give their feedback in one click. When visitors see a sincere attempt to collect feedback (especially when it’s optional and more subtle), response rates also dramatically increase. As the brand you will get more feedback by demonstrating that you are truly wanting to eliminate friction from the journey.

Brands that embrace a “whole lifecycle” mindset around customer feedback can see astounding gains by addressing things holistically. This includes a 33% reduction in complaints to the contact center, a 91% reduction in call waiting time, and a 27% reduction in operational costs by using feedback to improve efficiency. Read more about NICE results.

6. Safeguard consumers, and comply with new and evolving consumer data privacy laws

Prioritize data privacy and security, especially during the holiday season when cyberattacks and data breaches can be more common. A lack of brand trust is the ultimate friction to customer loyalty.

To keep consumers safe from cyberfraud, data privacy laws and other consumer-related compliances are finally commonplace worldwide. For example, a number of US states are enforcing data privacy laws with penalties that can quickly add up. With trust at the center of many consumers’ buying decisions, brands can quickly become overwhelmed if they fail to put guardrails in place.

The ability for consumers to have control over their personal information, including requesting access, correction, deletion, transfer and blocking use of, can result in a huge increase of effort internally for many brands under these new laws.

For example, a consumer might first request all the data a brand has regarding them, which can include internal teams manually searching across multiple sources of internal data. Even brands with a dedicated data privacy team must often collaborate with many others such as e-commerce or customer service to fully satisfy the request, adding to the total work effort.

The holiday retail season also involves brands doing business with an expanded consumer base, and brands may experience more requests coming in around data privacy. Additionally, as laws continue to be rolled out and more consumers learn about their rights, this will naturally add to the volume of requests.

Brands should ensure that they have good internal processes in place to handle these new laws, as well as secure ways of collaborating on requests. Beyond making sure your customers’ data is safe, putting into place best-in-class technology specifically for compliance can be a boon. Brands that do have seen big outcomes, such as cutting labor time spent on compliance by more than 50%, as well as reducing the total cost of archival and data retention by 30%. Read this NICE case study for more results.

As a new Metrigy retail report, Pushing the Retail Experience to the Utmost report, said, “Don’t give short shrift to fraud prevention, identification verification, or other security-related initiatives. If you aren’t using state-of-the-art means of protecting customer data, make that a transformational priority in the short term.”

Eliminate CX friction to gift consumers with a magical holiday shopping season

The stakes are too high this holiday season for retail brands to adopt the status quo in their customer experience plans.

Metrigy’s Pushing the Retail Experience to the Utmost report found consumers will allow a company three bad experiences on average before they’ll stop doing business with it. That’s a big enough problem on its own, but they also found that many consumers will also spread the word about their negative experience by telling friends and family—44.4% in each case. More than a quarter will leave negative reviews on ratings websites, and 12.4% will post on social media.

Leveraging the latest CX technology to take friction out of the customer journey is one of the most important move brands can make to reduce the steps between somebody browsing your website and making a purchase this holiday season, sparking the joy of customer loyalty in the future.