Tomorrow's experience, today - Retail sector insights - 2018 KPMG New Zealand Customer Experience Excellence Report - KPMG International
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Tomorrow’s experience, today Retail sector insights 2018 KPMG New Zealand Customer Experience Excellence Report
KPMG New Zealand Retail and Customer Consulting Team
Welcome Ian Williamson - Retail Consulting Lead
With an extensive background in global consumer goods and
retail operations, I lead our team delivering accurate demand
forecasting, integrated business planning, and distribution
network optimisation to deliver sharper operational performance,
driving enhanced consumer experiences.
Sharne Usherwood - Operations Lead
I help retailers optimise their supply chain so they have the right
Tomorrow’s experience, today celebrates the global In retail, the leading global organisations such as Amazon, product on the shelf to meet their customer’s needs. Adopting a
organisations that are harnessing a true customer- Nike, Apple, Lush, QVC and Ikea combine mastery of the customer-centric approach to procurement and supply chain is a
centric approach and adapting new capabilities to fundamentals of customer experience with the ability critical competitive advantage for today’s retailers.
create customer experiences that lock in an advantage to command a first mover advantage by seamlessly
today and in the future. integrating technology into customer experiences. Dylan Marsh – Customer Lead
This year’s global study builds on the eight years These organisations are capable of putting new customer Working across a number of sectors I help businesses
of work from our global customer experience centre, experience into practice – leveraging deep knowledge design and deliver relevant customer experiences that drive
which for the first time covers 14 countries (including and understanding of the customer to predict future engagement, and result in sustainable customer relationships.
New Zealand). experience needs and then making these experiences
a reality today. Baxter McConnell – Customer Experience Lead
The leading global enterprises in our study, including
My focus lies at the intersection of business and psychology,
New Zealand’s Farmlands and Air New Zealand, Our study provides insight into the DNA of leading
helping clients to create economic value through customer-
demonstrate how the quality of customer experience practice Customer Experience Excellence across Six
centric solutions. Internationally and in New Zealand, I have
maps to value – the top 50 brands studied deliver revenue Pillars; Personalisation, Integrity, Expectations, Resolution,
worked with global leading brands to gain insights into how
growth that is 50% larger than the bottom 50% and Time and Effort and Empathy. Critically, there is insight
customers feel, what they expect and what they want in the
EBITDA growth that is 202% greater. into how these organisations are creating customer-centric
future to drive top and bottom line growth.
organisations and adapting organisational models for
These global organisations are responding to today’s the future while having the ability to balance commercial
reality where new experiences, new competitors and outcomes and experience expectations. Nicola Owbridge - Organisational Effectiveness Lead
new business models are continuously resetting customer
expectations. They also lead the adoption of a host of Simon Hunter I help our clients gain a detailed view of their customer interactions,
new technologies such as artificial intelligence, machine Partner, Advisory economics and pain points to guide strategic decisions about
learning, bots and predictive analytics, all which radically the effectiveness of their operating model, supporting business
change the engagement and interaction experience improvements and organisational design enhancements.
with customers.
2 3
About this research The Six Pillars of Customer
Experience Excellence:
KPMG Global Customer Research:
8
Personalisation
Using individualised attention years of ongoing
to drive emotional connection. research
KPMG’s Customer Experience Customers were asked to respond to questions relating
to each pillar for each brand they had interacted with in the
Excellence Centre is an international previous six months. Brands were then assigned a score
think tank, dedicated to turning global out of ten for each of The Six Pillars and these were
combined to give an overall customer experience score, Integrity
customer experience best practice
170,000 +
followed by an evaluation of each brand’s delivered Being trustworthy
into effective business results. customer experience. and engendering trust.
Targeted questions enabled a more in-depth exploration
KPMG has drawn on its Customer Experience Excellence consumer interviews
of respondents’ brand experiences when interacting
Centre methodology, supported by the centre’s eight through different channels i.e. online, by phone or face-
years’ experience in the field, in its analysis of the to-face. Customers were also asked to indicate how Expectations
customer market experience. likely they were to recommend a brand (Advocacy) and Managing, meeting
2,300
to repurchase (Loyalty) from them. and exceeding customer
The Six Pillars are the DNA of every outstanding customer expectations.
experience and the fuel that powers fast business growth. This analysis is based on quantitative research data,
As the fundamental components of an ideal customer verbatim customer feedback and various brand interviews.
experience, The Six Pillars are the core structure around Together, these elements offer a detailed snapshot of cross-sector brand reviews
which this research is built. New Zealand’s customer experience performance. The
characteristics of the New Zealand market were then Resolution
Research for this survey was carried out in December Turning a poor experience
compared against global trends identified by the parallel
2 million+
2017 via an online research survey sent to a nationally into a great one.
research of 13 other markets, and incorporated into KPMG’s
representative customer sample. To be able to answer
international, large-scale customer experience study.
questions about a brand, respondents were required
to have interacted with that brand within the previous Research results were channelled to give an assessment
six months. 2504 consumers commented on 124 consumer valuations
of Customer Experience Excellence (CEE) in New
Kiwi brands. Time and Effort
Zealand. This includes a ranking of New Zealand brands Minimising customer effort and
by Customer Experience Excellence score as awarded creating frictionless processes.
At least 100 respondents per brand were required for
by customers. This report presents the top 10 customer
that brand to be included in the final research results.
14
experience brands and shines a spotlight on both global
62 brands made the cut, and KPMG New Zealand also
and New Zealand customer experience insights across markets covered
conducted primary research on selected companies from
key industry sectors. by 2018
each of the sectors during the first months of 2018, to
gather further customer experience insights.
Empathy
Achieving an understanding
of the customer’s circumstances
to drive deep rapport.
4 5
Global 140% The economics of customer
insights experience excellence
Additional amount spent over one
year by customers who had great
customer experiences.
Source: HBR & Medallia
from our 63% Outstanding experiences deliver outsized financial returns
research
The leading companies in our global research demonstrate a clear understanding of the link between the quality of the
experience being delivered and value created. When making strategic investment decisions, leading organisations factor
in the economic and long-term impact of improved customer experience in a way that enables them to understand whether
Of customers stop doing
the customer experience they are delivering is under or over-engineered financially.
business with a brand due to
poor customer service.
Source: Forrester
+$25bn
3.5x
More likely to repurchase for
consumers who have very good
customer experiences vs very bad.
Source: Temkin Group 54 % Bottom
50 brands 202 %
30% The revenue growth of the top 50
brands is 54% greater than the
The top 50
brands generated
The EBITDA growth of the top 50
brands is 202% greater than the
$25bn
bottom 50, at an aggregated level. bottom 50, at an aggregated level.
Higher customer lifetime value
for customers who buy online
and in-store vs those who only
use one channel. more in revenue.
Source: Google/IDC
Source: KPMG International
6 7
Global
US UK Denmark Norway
Rank Brand Top Pillar Rank Brand Top Pillar Rank Brand Top Pillar Rank Brand Top Pillar
4 H-E-B Expectations 1 QVC Resolution 3 Rema 1000 Empathy 2 Specsavers Empathy
customer
5 Calvin Klein Expectations 4 John Lewis Integrity 4 Lego Integrity 7 Apotek 1 Personalisation
6 Publix Empathy 5 LUSH Empathy 7 Irma Integrity 8 IKEA Personalisation
experience Luxembourg Netherlands China
leaders
Rank Brand Top Pillar Rank Brand Top Pillar Rank Brand Top Pillar
1 Librairie Ernster Resolution 1 LUSH Empathy Top 10 Gucci Expectations
6 Amazon Expectations 3 bol.com Expectations Top 10 Dior Expectations
7 Cactus Expectations 6 coolblue Empathy Top 10 Chanel Expectations
The top three retail
organisations by country
Mexico France UAE India
Rank Brand Top Pillar Rank Brand Top Pillar Rank Brand Top Pillar Rank Brand Top Pillar
2 City Market Expectations 2 Nespresso Expectations 3 IKEA Empathy Top 10 Amazon Expectations
4 Costco Resolution 4 Picard Integrity 4 Carrefour Expectations Top 10 Nike Expectations
8 Farmacias San Pablo Personalisation 5 Yves Rocher Empathy 6 Union Coop Integrity Top 10 Adidas Expectations
Italy Australia New Zealand
Global Customer Experience
Excellence (CEE) coverage
Rank Brand Top Pillar Rank Brand Top Pillar Rank Brand Top Pillar
Non-grocery retail 1 Apple Store Expectations 5 Bunnings Personalisation 1 Farmlands Co-operative Empathy
2 Amazon Expectations 6 The Body Shop Empathy 4 New World Resolution
Grocery retail 3 Chanel Integrity 7 Dan Murphy's Expectations 6 PAK’nSAVE Personalisation
8 Source: KPMG International, 2018 Customer Experience Excellence Report 9
The retail world we were
promised has arrived
New retail – the heart of all consumer touchpoints Instant expectations The rise of the conscious consumer
Changing to meet the pace
‘New retail’ is the reinvigoration of in-person shopping, where Customers are now in the driver’s seat – they have the A Global Corporate Sustainability Report published by
of today’s consumer
new technologies are utilised to provide both more engaging power. Apps like Snapchat, Uber and WhatsApp show we are Nielsen indicates that, globally, 66 percent of consumers
experiences and increasingly streamlined and customisable quickly moving toward a reality in which everything happens are willing to spend more on a product if it comes from As customers are now demanding
transaction processes. It’s seen in longer journeys that begin in real time. The natural outcome is that people want instant a sustainable brand. faster speed and greater convenience, department store
before the customer even steps foot in the store, extending gratification, which strongly impacts customer expectations retailer Target has responded by investing heavily in
Millennials gave an even more impressive showing, with 73
well after a purchase is made. Organisations succeeding here while placing strain on retailers. In a Salesforce.com report, supply operations, allowing them to roll out same day
percent indicating a similar preference. Simply put, customers
are strategically managing all customer touchpoints, using 64% of consumers said they expect companies to respond to delivery across its US stores.
want the companies they buy from to practice, and maintain
every brand interaction to build a greater understanding of each and interact with them in real time. The need for speed will only
strong ethical and transparent behaviours.
individual customer. Through innovative store design, smarter increase as technology enables and advances.
packaging, and consistent messaging, the organisation, the Today’s customers have a well-developed sense of what is
product and the consumer can all share a relationship that is authentic and what is solely intended to drive sales. This has
more deeply intertwined. It’s all about the frontline – globally, big players led to a rise in consumers who make values based judgements
are rethinking their labour models about what to buy and where to shop. These consumers believe
their purchase habits have an impact on the world. To win
The biggest talent risk to retailers right now is customer
Nike’s latest store in New York customers today, businesses need to stand for something and
facing staff, whether that presence is in store or online. Large
is an interactive playground reflect that message consistently throughout the entire business
businesses are rethinking their labour models, now focusing
for people who love sports from senior leadership through to front line staff.
on considering talent from the bottom up. Retail employees often
Nike opened a new five-story, 55,000 square foot store in make thousands of customer touchpoints everyday, every one of One third of UK consumers, for example, claim to be very
New York City. It features a mini indoor basketball court, which will impact how a customer perceives a brand. concerned about issues regarding the origin of products. In
a treadmill, a system that simulates runs in different If an employee doesn’t feel cared for, it shows in their attitude another example, a study from YouGov and the Global Poverty
locations, a small soccer enclosure, a shoe bar where and the level of service they provide. We can expect to see Project revealed that 74% of those surveyed would pay
shoppers can personalise a pair of Air Force One shoes, leading retailers’ frontline staff become more empowered, a higher cost for their clothes if there was a guarantee
and coaches who put customers through drills to test more responsible and greater rewarded for positive customer that workers were being paid fairly and working in
out different pairs of shoes. It is as much a place to play outcomes. When staff feel cared for and valued, and when they safe conditions.
as it is a place to shop. Nike is demonstrating that it believe in the brand, it will show and rub off on customers.
understands how brick-and-mortar retail is changing in the
age of e-commerce and also how to create a memorable
customer experience.
10 11
Global retail Lush
Netherlands (1st, Non-grocery retail)
H-E-B
United States (4th, Grocery retail)
Ernster
Luxembourg (1st, Non-grocery retail)
leaders
Non-grocery retailer Lush sees itself as a brand that is defined No store does more; that is the motto at H-E-B. And it Ernster is a small chain of bookstores with a big
by its values and its products. Indeed, many customers view shows. They jumped 12 spots to place #4 on the 2018 reputation. Throughout Luxembourg it is seen as the
Lush as refecting their own personal values and personality, KPMG Customer Experience Excellence list and lead focal point for those passionate about books. Established
bringing a unique level of identifcation. It also sees itself as the grocery retail sector. With high rankings in the areas in 1889, the firm has long known that books can build
a campaigning brand. From spearheading anti-animal testing of Personalisation and Time and Effort, H-E-B’s focus on bridges between cultures and so most staff can speak
campaigns, to working to minimise packaging or using ethical customers is apparent. “Because people matter. We’re in four languages. But it is those that demonstrate a passion
sourcing methods, customers in the Netherlands feel that the people business. We just happen to sell groceries.” for books (“L’esprit livre”) and a willingness to smile that
each aspect of the Lush experience refects the moral code are most heavily recruited. And it is the smile that seems
H-E-B began with one store in 1905. Emphasising hard
that guides the business. to have the greatest impact with customers. Their passion
work and the importance of taking care of customers,
for books manifests itself in numerous literature events,
Stores are designed using a delicatessen motif. Staff are today H-E-B has more than 340 stores and more than
signings and readings.
encouraged to be consultative and diagnostic rather than 100,000 employees, serving 155 communities in Texas
sales-focused; they are trained in detail as to what each and Mexico. According to H-E-B, “We hire great people, The company seeks out opportunities to allow their
product contains so they can advise customers on particular offer customers the best service and sell only the customers to not just buy and read a book, but to also
skin conditions, for example. freshest, safest products.” understand the author’s intent, the context that the book
was written in and the deeper, more profound meanings.
Serving customers is at the heart of everything H-E-B
Not surprisingly, Ernster has a reputation for providing a
QVC does, from the boardroom to the receiving docks. Their
stated core values include:
deeper and more insightful perspective for those who are
truly energised by reading.
UK (1st, Non-grocery retail) “Service — We believe grocery shopping is more than
Rapid service, advanced multichannel ordering systems
an errand. That’s why it’s our pledge to always go above
and an almost legendary ability to source rare or out-of-
In 2011 QVC UK began to refocus on their customer and beyond. Here, we think like the customer, not about
print books ensure high levels of customer satisfaction.
experience. They started the process internally by focusing the customer.
on their values. They focused on Empathy, from the “Heart — People matter. Here, people are at the heart of
presenters on TV, to their distribution center in Liverpool, every decision made and everything we do – no store
through to how they delivered digital experiences. In cares more.
support of this, QVC restructured the organisation and
incorporated new technologies with the aim of getting “Innovation — We’re continuously searching for ways to
closer to the customer. They focused on understanding serve our partners, customers and communities better
customers’ expectations and connecting their organisation and make their lives easier. Here, we are relentlessly
across channels to deliver them. In the process they adapted dissatisfied with the present.”
their product range, based on how their target customers’ According to KPMG’s Customer Experience Excellence
expectations changed in response to seasons, events and findings, the top companies on the list know that the
times of the day. Consumers in the UK now rate QVC UK as employee experience precedes the customer experience,
the leading brand according to our research. and have strong people policies. H-E-B is no exception.
In 2017, they were listed as a Best Place to Work by
Glassdoor, Best Retailer from Indeed and Best Workplace
for Women from Comparably.
12 13
Tanishq JD.com
India (Non-grocery retail) China (Non-grocery retail)
Jewellery buying is a highly personalised experience and can JD.com, China’s largest online and offline retailer (by
take anywhere from 75 minutes to 7 hours in the first interaction revenue), placed in the top 50 of our mainland China CEE
for a purchase. In what is seemingly a short time to form lifelong study. With heavy investment in the latest technology,
bonds, Tanishq strives to make their customers feel like family. the e-commerce giant scored strongly on all Six Pillars,
particularly Time and Effort.
Tanishq believes in the value of integrity and ensures that their
customers trust the brand fully and completely. Melting gold
in front of the customer so they get what they see, weighing Same/Next-day delivery promise
stones and gold separately and having a 100% exchange value In the e-commerce world, JD.com is renowned for its
programme are some of the measures taken by them. They also nationwide logistics network and rapid delivery. Of the orders
organise diamond education workshops for customers to ensure placed by their 300 million-plus active customers, over 90%
their customers have adequate knowledge on the product to can be delivered either on the same day or the day after
make an educated purchase decision. the purchase. The speed of delivery and fulfilment is a clear
differentiator in customer experience, especially within the
Another interesting facet to Tanishq is their behavioural standard e-commerce sector.
operating procedures document called ‘Tanishq Way of Life’
(TWOL); which goes far beyond being a regular SOP. They To enable this, JD.com has invested in developing its own
attempt to bond with their customer by celebrating customers’ logistics – with its own warehouses, sorting centres, delivery
special days with them; there are stories of people getting stations, fleet of trucks and delivery personnel – allowing
married again on their anniversaries within their stores! Every the e-commerce giant to own the journey from ‘click’ and
religious festival is celebrated with much gusto among all ‘purchase’ down to the last mile delivery to the customer.
employees and customers. The efficiency in tracking and delivering packages is also
supported by JD.com’s automated sorting centre. The
To cater to disgruntled customers, they have established service centre processes about 9,000 parcels hourly, and can handle
centres at every store, have well trained employees through a more than four times the number of packages compared to
combination of classroom and on-the-job training and a well- manned centres, with enhanced accuracy and reduced error.
established complaint management system. They have two
objectives from this: do justice to the customer and protect their
brand value. In case the customer is still no appeased,
Drone delivery in daily operation in rural areas
the higher management personally attends to the issue. More recently, JD.com has been looking at new technology
to improve the delivery process in China’s rural interior,
where complex terrain and poor infrastructure can make
the last mile delivery a challenge. JD.com’s self-developed
fleet of delivery drones is used daily to dispatch parcels from
regional delivery stations to JD.com’s dedicated “village
promoters” in each village, who then deliver parcels directly
to customers. This allows customers in remote areas to
benefit from the convenience of online shopping, and also
helps JD.com shorten delivery times and save costs.
14 15
New Zealand
New Zealand: Market average across
The Six Pillars (maximum of 10 points) Air New
Time and Effort Farmlands 02 Zealand
03 Kiwibank
04 New World
Co-operative
market overview
7.26
Personalisation
Integrity
7.22
7.01
01 05 ASB Bank
06 PAK’nSAVE
07 Unichem
Resolution Southern Cross Skinny
Expectations
6.81
Of The Six Pillars, New Zealand
Non-grocery retail
08 Mitre 10
09 Healthcare
10 Mobile
6.58
performs best on Time and Effort. Leading Customer Experience brands in New Zealand
Empathy Our analysis shows that many
6.39 companies are successfully using
New Zealand 2018
Time and Effort, and Personalisation, Customers embrace brands that show a distinctive Kiwi It’s akin to hosting someone well, coupled with an
as a source of competitive advantage personality. Defining what is or is not a ‘Kiwi’ personality ingenuity to alter something standard in order to meet
New Zealand Retail Sector Comparison
in the local market. can be a tricky task, especially to Kiwis themselves, but the current need.
when you look through the data a combination of factors
(maximum of 10 points) Of all New Zealand consumer responses, brands that
can be seen working together for successful brands in
Time and Effort is the most important pillar in customer were perceived by consumers as offering excellent
the New Zealand market.
2 Non-grocery retail 7.12 experience excellence for the New Zealand consumer. As in value were three times more likely to be a leader (top 10
many other countries, customers in New Zealand are time- Customers interviewed about the leading New Zealand overall) in customer experience across The Six Pillars. This
poor and are increasingly seeking seamless interactions. By organisations, articulated a strong sense of pride in the relationship between creating value for the customer and
3 Grocery retail 7.05 removing unnecessary obstacles and red tape, New Zealand brands they associated with. This pride was found to be a company receiving value from the customer is not just
brands allow customers to achieve their objectives quickly and highly correlated with positive trends towards loyalty for a short term economic benefit, but is also reflected in
easily, boosting positive customer engagement as a result. that brand. When you look at many of the top brands, customer loyalty. New Zealanders have pride in the brands
there is an element of this Kiwi personality that goes they connect with, and have a high degree of loyalty to
Empathy – the emotional capacity to show that you
beyond a name - it’s an organisation’s drive to personalise the brands that provide personalised interactions and
understand and care about another person’s experience - is
and customise offerings that resonates with the outstanding experiences in our changing market.
the weakest of The Six Pillars, both in New Zealand and
New Zealand consumer.
the other 13 countries as well. Strong performance on Retailers performed well in New Zealand
Empathy requires brands to have a deep and comprehensive A uniquely personalised experience expresses a value placed
–– 5 of the top 10 are retail organisations
understanding of their customers’ lives and circumstances, on the customer from the organisation. In the best cases,
allowing them to reflect back to customers that their feelings how a customer experiences a service or product is part of –– 14 of the top 30 are retail organisations
and experiences are recognised and understood. how the brand innovates and enacts their core purpose.
16 17
Top trends in
International competition is more onshore
than ever
The idea of importing a favourite product or buying duty-free
is starting to dissolve as the global economy becomes more
New Zealand retail
interconnected every day. With Amazon’s recently launched
‘International Shopping’ Kiwis can shop over 45 million
products that ship from the United States, while Alibaba’s
platforms are giving more Kiwis access to alternative offerings
at prices local retailers often struggle to compete with.
From retail to omni-channel
New models of consumption and new
While many New Zealand retailers have invested in digital
brand identities
channels, many still struggle to provide the fluid levels of
experience that customers are demanding. For Mitre 10, who Disruption is continuing to change the way Kiwis are
scored 8th overall in this year’s CEE report, creating great consuming. New business models that are closer in tune to
omni-channel experiences is a top priority. More and more modern lifestyles are becoming more popular, as consumers
Mitre 10 customers prefer to first research and review product are increasingly choosing convenience. This is seen in the
online then see and feel the product in person, before making rise of timely delivery services and subscription models that
a purchase. Mitre 10 strives to dissect and understand these provide takeaway food, groceries, health products through
behaviours through detailed customer journey mapping, with the to homewares. These brands are often utilising strong digital
goal of creating a frictionless buying experience. channels to interact and communicate with their customers,
allowing for offerings that are more tailored to suit. They
New World is another leader in New Zealand, delivering a digital often leverage unique origin stories or stronger ethical and
grocery experience that rivals those of many international sustainable traits.
supermarkets. New World’s mobile app makes it efficient
for customers to quickly and easily shop online, having their The emergence of many of these organisations, often
groceries delivered or ready for pick up in store. New World with lower cost structures and clearer brand identities are
collates customer shopping information and preferences, all summing to volume that is putting increased pressure
resulting in a personalised and more efficient experience as on traditional retail and the traditional brands they carry.
the service is utilised. For businesses to succeed in this area,
they will need to follow their customer facing capabilities,
moving divided inventory and back end models to unified
systems that are synonymous regardless of the way a Subscription services now delivering in
customer chooses to shop. New Zealand
Dollar shave club – monthly razor blade deliveries.
Developing point of sale capabilities Smartass – 100% renewable toilet paper delivery
More New Zealand retailers are utilising new technologies and service, with 10% of profits donated to tree
moving away from traditional retail point of sale models. Staff planting projects.
are no longer check-out operators, but purchasing assistants, Necesse – 100% organic cotton tampons
armed with technology, devices and data to be of more value delivered monthly, where every order also donates
to customers. Self-checkout stations and mobile payment tampons to women in need.
technologies are allowing retailers to be more flexible, creating
more streamlined experiences for their customers.
18 19Farmlands
Top performing Co-operative
Society
Case Study
New Zealand retailers
Our analysis of New Zealand's highest scoring
Farmlands’ success in customer experience can be attributed
to their focus on their number one customer: the Farmlands
shareholder. Their shareholders are valuable not because they
are stakeholders, but because they are their loyal and repeat
2018 NZ CEE
brand ranking: 1st
The Six Pillars:
customer base. These shareholders rely on Farmlands for all
retailers in our 2018 research of their farming needs, knowing that they will always deliver.
Scores vs Industry Average
There is an intimacy in the relationship the Farmlands brand
has with its customers. They gain trust by being honest and
open, and by making communication a two way dialogue.
By staying close with their customer, they have a strong
alignment between customer expectations and what +9% +12%
they deliver.
Their agri-focused people mean they are in truly tune with
the needs of their customer, allowing for a high level of
service personalisation and flexibility. This is where Farmlands
distinguishes themselves from any other customer experience. +9% +6%
Customers trust that no matter how unique their needs,
Farmlands staff will understand their situation and go above
and beyond to meet them.
Farmlands’ stores are specially designed to suit their
customers’ unique needs with drive-through bays and room
+7% +12%
for vehicles and trailers. Customers praise their wide range of
stock catered to all farming requirements, making Farmlands
a one-stop-shop. When visiting Farmlands, customer service
and personalisation is taken to the next level. Not only do
employees excel at the fundamentals, such as knowing
customers by name and what their business is, they know
how farmers’ businesses operate. They understand which
As a co-operative, we were formed by
products and services will be in demand in which season,
New Zealand’s rural communities and
such as fencing products for use during wintering, or extra
we recognise and value the power of
feed during adverse weather events.
staying close to our communities.
Farmlands’ extended commitment to customers can be seen
Peter Reidie
through their interwoven presences as part of New Zealand’s
CEO, Farmlands
local communities. Their sites comprehensively service New
Zealand’s farming areas whether large or small, each carrying
their own unique stories.
20 21New World PAK’nSAVE
Case Study Case Study
Founded in 1963, the New World supermarket brand now In recent years PAK’nSAVE has invested heavily in branding
includes over 140 independently owned and operated retail and refurbishment Programmes, demonstrating a commitment
grocery outlets, connected through either their North Island to exceed customer expectations whilst still living up to their 2018 NZ CEE
2018 NZ CEE or South Island Foodstuffs co-operatives. This structure policy of ‘New Zealand’s lowest food prices.
brand ranking: 4th enables New World’s store owners to leverage the resources brand ranking: 6th
PAK’nSAVE realises that their customers’ world is changing.
of a large organisation to better serve their customers’
Rising household debt, 1-in-3 families having a solo parent
needs, while providing an experience tailored specifically to
and less planned and more frequent shopping habits have
The Six Pillars: their local community. The Six Pillars:
necessitated PAK’nSAVE to live up to their position as a retailer
Scores vs Industry Average New World is known by many Kiwis for their well-loved who knows New Zealanders well. But seeing the world from Scores vs Industry Average
customer engagement campaign, the ‘Little Garden’ their customers’ perspective requires more than strong brand
collectibles programme. These eco-friendly collectibles bring choice, convenience and a consistent store experience. At
joy to adults and children alike. Another popular initiative Christmas, Stickman – the company’s iconic mascot – became
began in 2017 when a $0.05 refund was given to customers ‘the Host with the Most for Less’ reflecting the chain’s
who brought their own reusable shopping bags. This not only empathetic respect for busy families who need to get all
+6% +7% delights environmentally conscious shoppers, but is also in line Christmas supplies in one place. To relate to their customers’ +7% +6%
with the organisation’s corporate responsibility strategy, which everyday needs, PAK’nSAVE is also driven to personalise the
seeks to “constantly strive to serve the community better.” grocery experience by launching their loyalty programme:
‘Sticky Club’. This allows them to get the right shopping
In addition to positioning themselves as a retailer who do the
content to the right person through personalised deals
right thing, New World has made a real step-change towards
and communications.
+6% +6% becoming a truly customer-led and data-driven business. +6% +5%
Understanding customer behaviour, wants and needs is a top PAK’nSAVE knows that exceeding expectations is linked
priority, and they have invested in customer insights initiatives to the feelings and occasional memories created by the
such as tracking Net Promoter Scores (NPS), a measure of shopping experience. This is demonstrated through recent
customer satisfaction, and their Clubcard programme. By the campaigns, such as on their birthday, where ‘Stickman’ creates
end of 2016, one million actively engaged Clubcard members a celebratory atmosphere where both staff and customers
+4% +6% were scanning their loyalty card on an average of almost two dressed-up for photographs with Stickman as ‘the superhero +3% +3%
thirds of all sales. These efforts allow New World to continually of low prices’. For customers who prioritise healthier and
further its everyday customer experience through the environmentally-focused choices matters, brand standards
refinement of its service and product offerings. have been introduced and PAK’nSAVE has sold an ever
increasing range of both Fair Trade and free range products
New World further recognises that valuing their customer’s
such as coffee, tea, chocolate and bananas. PAK’nSAVE has
time and effort is an important part of the customer
also placed emphasis on their support of Environmental Choice
experience. To minimise the effort required to choose from
We take a structured approach to listening - the official environmental label in New Zealand, while also
New World’s product selection, New World ran their own Beer
to what our data tells us, giving us real & Cider Awards for the third year running and Wine Awards
launching their ‘NZ Made’ marketing campaign focused on ‘low I did my Christmas shopping there
actionable insights. By seeing the way our for the 14th year running in 2017. Customers’ time and the
prices on stuff made here’. and won a new BBQ. This was a
cutomers respond to our products and offerings
we have a clear understanding of what is
importance of staying relevant were key drivers behind New Demonstrating a commitment to their communities, PAK’nSAVE great and memorable experience
World’s emphasis on giving more flexibility to customers continues to support the Breast Cancer Foundation by selling
resonating with the customer, how the customer by launching ‘iShop New World,’ their mobile shopping app, pink grocery bags, raising awareness for men’s health issues
that I have told everyone about.
is changing their attitudes towards, and where providing a ‘click and collect’ or ‘click and deliver’ service. alongside the Movember Foundation, and donating an average PAK’nSAVE Customer
we most need to create change. of 1.5 tonnes of food per store each month to foodbanks,
Steve Anderson schools, community groups and food rescue organisations.
CEO, Foodstuffs South Island Limited
22 23Unichem Mitre 10
Case Study Unichem is a nationwide network of over 290 pharmacies Mitre 10 is a prominent New Zealand retail chain, specialising
Case Study
that provide prescription services, over the counter in hardware and trade supplies. It was established in 1974 and
medication, health services, products and advice. It is the is a New Zealand owned and operated co-operative with over
2018 NZ CEE largest pharmacy brand under the Green Cross Health 350 stores nationwide.
2018 NZ CEE
brand ranking: 7th parent group, which has a strong commitment to the health
Mitre 10’s co-operative model gives each individual store’s
brand ranking: 8th
and wellness of New Zealand. Its high rank in the survey is
management the autonomy to create personalised experiences
reflected in respondents’ comments that note its friendly
that resonate with local customers. Stores embrace the distinct
The Six Pillars: and knowledgeable staff as well as convenience provided The Six Pillars:
culture of their regional area, hiring local staff who genuinely
by prescription and delivery options. It is a leader in New
Scores vs Industry Average know and understand their customers. Scores vs Industry Average
Zealand’s non-grocery retail sector, receiving 2nd place.
Mitre 10 puts considerable time and effort into understanding
Unichem positions themselves as health professionals – a
their customers. By utilising captured data as a primary insight
trusted source of support and advice beyond simply a retailer of
tool, they are able to understand behaviour drivers and in turn
pharmacy products – through their ‘expert care + advice’ offering,
proactively meet their customers’ needs. They break down
and insightful medical knowledge demonstrated by staff.
customer journeys to eliminate friction points and create
+4% +5% Customers love the extent of care given and praise staff’s personalised service for distinct customer types. +4% +3%
ability to connect the right products and advice to suit each
This approach is not limited to the customer, as Mitre 10
customer’s specific health issues. This is shown in Unichem’s
recognises the value of empowering their team members,
high score in Personalisation, reflecting the level of individual
examining ways to remove the friction of store processes
and tailored support provided. Unichem staff are renowned
to create mutual benefit for customers and staff.
+3% +3% for their friendly attitudes and commitment to happily go out +4% +5%
of their way for a customer, with many elderly respondents Mitre 10 maintains multiple points of engagement with its
valuing the extended time and support that staff give to them customers, connecting to the DIY attitudes of New Zealanders
when they need it. Unichem customers also trust that when through their ‘Easy As’ instructional videos and connecting
they go to Unichem, staff will be respectful of their privacy. through their social channels.
Unichem’s Living Rewards loyalty programme has been Customers are continually impressed by Mitre 10’s product
+3% +7% a big hit with customers. With over 1.5 million members, offerings and their in-store and online shopping experience,
+4% +3%
Living Rewards members love being able to collect points while those specifically in the trade of building and construction
on purchases and receive personalised, member-only deals. have recognised the ease of doing business – often serving
early morning customers before store opening times.
Unichem leverages an owner-operator model, where
an enormous level of community empathy is visible. In
many instances, customers establish strong connections
“We have a very strong, insights-oriented customer
“Our pharmacists are the health with team members, who understand and connect with experience programme that is centred around
their unique individual needs. Customer excellence is understanding what our customers’ expectations are Probably my favourite store.
coaches in their community – today and what their expectations will be tomorrow.
there to keep people well, offering
demonstrated through health services such as vaccination
We believe that you cannot excel at customer I have never met an unhelpful
services, prescription reminder services and, in some
care and advice throughout their pharmacies, prescription delivery. experience with a ‘one size fits all’ customer strategy.” staff member, and always
lives, not just help to treat them Jules Lloyd-Jones look forward to going to
when they are sick.” General Manager Marketing my Mitre 10.
Debbie Yardley, Group Manager Mitre 10 Customer
Customer Experience and Communications
24 25Future trends in retail
customer experience
Try before you buy Consumer preferences driving Artificial intelligence will gain more clout
product attributes
The convenience of online shopping will be further Due to increasing ease of deployment, instant
expanded as more companies become comfortable A world of faster fashion and shorter product cycles availability and improved quality, chatbots will become
with expanding their returns policies. By 2020, one will allow more companies to take direct influence more and more common to manage customer
in four US retailers will offer a ‘try before you buy’ from the interests of their consumers. As trends service queries and to make intelligent purchase
service – predicted by consultancy Brightpeal. Free and preferences are signalled in real time through recommendations. We will also see the rise of
and simplistic returns will allow customers to be more social channels, companies will respond with AI-powered conversational interfaces and voice
selective of products and make purchasing decisions products and messaging that are directly in-tune assistants. Retailers can engage this kind of technology
on their own time. This will put pressure on smaller with their customer. This business model is to answer routine questions and supplement
retailers not able to provide this level of service, as only realisable by those willing to invest in more human customer support with chat-based shopping
Tacobot
it will only succeed in organisations who are willing adaptable manufacturing and supply networks, or voice commerce.
to think strategically about reverse logistics and the alongside processes that are able to deliver faster Tacobot is Taco Bell’s chatbot that
Alongside having the technology available, retailers
competences of their supply chains. turn-around times. will never let you go hungry. Tacobot
now also have a significant amount of data to
is currently in private beta mode and
power AI and deliver personalised, customised and
requires a quick install. However as soon as
localised experiences to customers. AI will be applied
Amazon Prime Wardrobe Glossier it is installed, you can start chatting and ask it
across the entire retail product and service cycle,
questions about the menu, recommendations,
Continued innovation from Amazon US brand Glossier is a direct-to- from manufacturing to post-sale customer service
special offers and dietary requirements and
has taken the guesswork out of consumer beauty company that interactions. Retailers using AI to its fullest potential
even ask how Tacobot is feeling.
online shopping, allowing a customer to try on takes direct inspiration and content from will be able to influence purchases in the moment
clothes before purchase in their own home. their own shopping community. They rely on and anticipate future purchases, guiding shoppers
By leveraging the power of their online, customers sharing recommendations and towards the right products in a regular and highly
Platforms of the future
inventory and supply network, they are able experiences on social media as the main personalised manner. We will see new partnerships
to deliver a service of selecting, sampling driver in the creation of new products. and collaborations between retailers and technology Increasingly the internet will become the battle of
and returning goods in a process that is companies emerge. Retailers recognise that building the platforms as integrated ecosystems of related
streamlined enough to meet the standards or buying the technology they need isn’t the best use products vie for the customer’s attention. There is
of the modern consumer. of their resources. Instead, we will see a rise retailers a need for organisations to consider their own strategic
partnering with niche technology players – collaboration position: do they become the owner of the platform
will be the key to success. or a participator in someone else’s platform.
26 27Fragmenting Customers are increasingly
‘mixing and matching’ as they
unbundle and then reconfigure
The leading organisations in our research are
those that are connecting their customer in unique
and exciting ways by developing a network of
ecosystem partners that enable and empower the
bundled different components of the on-board
and pre-boarding travel experience for the
benefit of its customers.
customer
Here in New Zealand, food retailer New World
their buying experience to customer to bundle services and products in ways
aims to integrate both online and instore
that suit them best. These organisations realise
suit their individual needs. they cannot do everything themselves, but they can
shopping. Examples include delivering healthy
Organisations that react to dinner kits, and instore demonstrations
create an integrated environment where consumers
journeys
with competitions to inspire and incentivise
the connected consumer and can construct seamless journeys using the power
customers to participate with the brand.
of connected digital technology.
enable customers to re-bundle Customers in New Zealand note that the
in unique and personalised ways Taking top spot in Australia, Singapore Airlines brand demonstrates its Integrity through fair
(SIA) can attribute their success to their ability trade and a strong environmental focus.
are beginning to achieve to get closer to their customers and understand
Rebuilding and integrating customer journeys
a market advantage. their needs and requirements at each stage
is a process of aggregation, selecting
of the travel life cycle. This has meant looking
appropriate partners, orchestrating them and
The arrival of the internet has enabled customers to beyond the touchpoints that are managed or
then presenting the options to customers in
create their own customer experiences. This has been controlled by Singapore Airlines to understand
new and exciting ways. Many of the leading
particularly true of the travel industry where customers how value is being added to the end-to-end
organisations in our research are using this
have long been able to unpick components such as experience regardless of who actually delivers
re-bundling process to create a cohesive
flight, hotel, car hire and transportation. the experience.
whole that delivers on the brand promise.
More recently, customer configuration has also Investments into a customer experience
hit the retail sector. Customers may walk into a management (CEM) system have allowed the
physical store for information, but then purchase company to listen and react to the customer’s
online and have the product delivered and installed voice as they moved through this unbundling
(if necessary), all at a time of their choosing. The and re-bundling process. This, in turn, uncovered
process may involve several different entities, but it is opportunities to improve their passengers’ “If I want to buy something
seamless to the customer. experience across multiple touchpoints. One of from a store, I will look at
the areas it identified was a need to catch up
The reality is that this digital democratisation of the
with their digital experience. Recognising the
their app/website first and
purchasing process is fragmenting what has historically
emergence of the ‘ultra-connected traveller’, SIA if I don’t like what I see I
been a stable and predictable process.
set about creating an app that reconnected and re- won’t go to the store.”
New Zealand retail customer
28 29Creating the customer-centric
organisation of the future What we found was that the firms that provide the highest-
rated customer experiences tend to be those that excel across
all of The Six Pillars of customer experience excellence. And
they are often the ones that structure their internal and external
Life event drift and the redefintion
of life stages affect not just
customers, but employees too.
These shifts are changing the rules
connections to align against four key attributes:
for almost every organisation
A commitment to excellence
and impact the way they think
and competitive superiority about culture and the overall
In the old days, when the primary thing CEOs wanted The challenges for CEOs and decision-makers will be management of change. As such,
to achieve was consistent, low-cost output across their considerable. Indeed, they will need to have one foot in
High levels of staff engagement
the roles of managers and leaders
increasingly complex manufacturing processes, the the present and one in the future – and be able to shift their are evolving rapidly.
and employee experiences that
traditional ‘division of labour’ approach was an unmitigated weight from one to the other – if they want to stay ahead
connect with the customer experience
success. But, today – when even manufacturers are trying of the game. KPMG Global Customer
to think less like manufacturers – the old organisational Experience Excellence Survey, 2018
In this report, we leverage our consumer data to help CEOs
paradigm is no longer enough.
and decision-makers bridge that gap – to find their footholds An obsession with
This is because today’s businesses are no longer centered in the present and the future. We provide examples of how high-quality execution
around the manufacturing line – they are centered around the leading firms are crossing this divide. We explore how
their customers. they are addressing the need to not just connect things
today, but to connect to the ideas and technologies of the
Today’s organisations are striving to be organised around Clarity on the economics
future to gain competitive advantage.
ideas, concepts, individualised designs and unique of experience
personal experiences. In this world, success goes to
those that are the most interconnected, intertwined
and creatively juxtaposed. The winners recognise that Obviously, there are no silver bullets for creating a more
it’s about ecosystems, not functions; relationships, connected business. Rather, it requires organisations to
not divisions; and journeys, not structure. ...of CEOs believe
take a holistic approach – to consider the organisation as
59%
agility is the new a system with multiple connections that each need to be
The problem is that the vast majority of today’s leaders
still manage functionally, not cross-functionally. With currency of business. managed, nurtured and harmonised. It is the whole, not
commercial advantage now going to those that are the the parts, that matter.
KPMG Global CEO
quickest to develop quality connections both internally We believe that – if organisations hope to prosper in
Outlook Survey, 2018
and externally, the need for a centrally organised and unifying tomorrow’s customer-centric business environment – they
set of principles that both encourages collaboration and will need to overcome the limitations of the 18th century
drives towards the overarching mission and vision is critical. organisational design. And they will need to start thinking
more holistically about how they embrace the technologies of
the future to deliver tomorrow’s customer experience today.
30 31CE
CUSTOMER EXPERIEN
CHECKLIST
tomer from the start? Today’s customers are better informed, better connected and more demanding than ever before.
Do we recognise the cus and easily?
us interactions quickly -line and called as Customer experience is overtaking price and product as the number one brand differentiator.
Can we see their previo ne l experience – have they just been on
ir om ni-chan
Welcome Are we able to see the
nality?
seq uence ? ts the customer’s perso
a con
trained to gre et and interact in a way that sui Customer strategy: Using innovative approaches to Customer pricing, analytics and insights: KPMG’s
Are our people
growth strategy, product development and new business customer analytics solutions and decision engines can
models, KPMG helps clients on their customer and help you to understand customer and quantify customer
to listen well? ing’ behind the words?
Do our people know how hniqu es to uncover the ‘mean market strategy. Our accredited strategy practitioners help insights. This includes leveraging customer experience
estion ing tec ponse the
Do they have the qu h the psychological res organisations answer the questions such as ‘what to aim insights to create more economic value through value-
e the em otio nal inte lligence to respond wit
Do we hav hy or urgency? for’ (strategic investment) and ‘where to play’ (market and based pricing strategies.
Engage
– reassurance, sympat s online?
customer is looking for pro vide ins ight for customer experience brand strategy).
pathw ays to
Do we track digital Customer-centric organisation: KPMG’s customer team
Customer experience: Using the KPMG Customer can help you to cohesively mobilise your business around
ir preferences?
customers to update the Experience Excellence Centre that has led this research, our customers. We do this through operating model
Do we make it easy for how ou r cus tomers want us to?
pond when and we create winning customer experience strategies. This optimisation to empower employees to proactively and
Are we available to res ining to this customer?
ord of all insights perta includes customer journey redesign across digital and efficiently serve customers.
Respond Do we have a central rec need about a customer?
quickly and rem ote ly access informatio wen
non-digital channels, customer loyalty and mastering
Can we and desired?
to customers required On-Shelf-Availability: On-Shelf Availability (OSA)
Are our communications CX economics to maximise customer lifetime value.
measures the availability of your products for customers
Customer profitability: KPMG’s Customer Profitability to purchase, which is a direct inverse of out-of-stock rate.
ra mile?
our people to go the ext
Do we make it easy for sen sible jud geme nts?
team can take the traditional P&L of any business Very few retail businesses in New Zealand are effectively
to ma ke s?
Do we empower them e require d to solve frequent issue and derive insights into the hidden problems and monitoring on shelf availability, and those that are do not
our people have the detailed knowledg ng things for the customer? opportunities. We accomplish this by using our multi- have a comprehensive understanding of the root causes
Solve Do
our pe ople wh en they are ‘heroic’ in fixi
Do we recognis e gs for the customer? dimensional profitability tool to identify the most profitable underlying out-of-stock events.
feedback to improve thin
Do we collect and use combination of customers, products and channels.
Integrated Business Planning: KPMG’s Integrated
Marketing, sales and service transformation: The Business Planning Operating Model balances demand and
avoidance?
Do we practice next-issue tomer?
able tra nsparency with the cus ectations?
KPMG team can help you to digitally enable and transform supply, integrating product lifecycle and financial goals,
Do our pro cesses en
-on processes we ll enough to set customer exp the effectiveness of your marketing, sales and service with key enabling processes and capabilities that support
follow
Do our people know the ndard “have a nice day
?”
Close ly and personal – or a sta functions to create a connected enterprise – integrating the operating model.
Is our close warm, friend ction programm es?
into our customer satisfa front, middle and back office operation – to enable a more
Do our values resonate Procurement: KPMG Procurement Advisory provides a
agile and responsive business.
wide range of capabilities tailored to support your function
lling new technologies? arter systems? in getting the fundamentals right (spend, process and
Are we testing and tria erience dat a and often to enable sm
tom er exp performance management) and beyond, helping to cope
Do we review our cus blems we can fix?
to the customer life pro enabling with disruption and uncertainty.
Particularly Do we have a view as ddle and back office and
in New
developing ou r digital spine – uniting front, mi
Zealand Are we
customer self-service?
32 33You can also read
