Tomorrow’s experience, today

2018 KPMG New Zealand Customer Experience Excellence Report

July 2018

kpmg.com/nz Welcome... KPMG New Zealand Customer team

Dylan Marsh Customer Lead Working across a number of sectors I help Tomorow’s Experience, These organisations are capable of putting new businesses design and deliver relevant customer customer experience into practice – leveraging deep experiences that drive engagement, and result Today celebrates the knowledge and understanding of the customer to in sustainable customer relationships. predict future experience needs and then making global organisations these experiences a reality today. that are harnessing a Our study provides insight into the DNA of leading Baxter McConnell practice Customer Experience Excellence across Customer Experience Lead true customer-centric Six Pillars; Personalisation, Integrity, Expectations, Resolution, Time and Effort and Empathy. Critically, My focus lies at the intersection of business and approach and adapting there is insight into how these organisations are psychology, helping clients to create economic value through customer-centric solutions. Internationally and creating customer-centric organisations and adapting in New Zealand, I have worked with global leading new capabilities to create organisational models for the future while having brands to gain insights into how customers feel, what the ability to balance commercial outcomes and customer experiences that they expect and what they want in the future to drive experience expectations. top and bottom line growth. lock in an advantage today This report gives an extremely rich slice of consumer insights so that New Zealand and in the future. organisations can adapt to the changing customer David Clay experience landscape. It recognises and celebrates Customer Profitability & Analytics Lead Understanding customer behaviours and the This year’s global study builds on the eight years New Zealand’s leading organisations such as commercial performance of products and channels of work from our global customer experience centre, Farmlands, Air New Zealand, Kiwi Bank, New World is my focus. I specialise in understanding the which for the first time covers 14 countries (including and ASB. Importantly, New Zealand organisations customer experience, profitability and pricing to New Zealand). are demonstrating that we have the ability here to match the world’s best. Technology and inform large scale transformation initiatives. The leading global enterprises in our study, innovation are driving an increasingly connected including New Zealand’s Farmlands and Air New global economy, which results in New Zealand Zealand, demonstrate how the quality of customer organisations having to compete more than ever experience maps to value – the top 50 brands before with global, multi-national competitors. Rachel Hunt studied deliver revenue growth that is 50% larger In order to stay relevant and prosper, New Zealand Customer Profitability Strategist than the bottom 50% and EBITDA growth that is organisations must change and adapt to proactively With a background in institutional banking, 202% greater. meet customer expectations. I’ve developed insights on customer profitability in order to drive improvements and inform These global organisations are responding to today’s Our view is that excelling at customer experience, strategic transformation in this sector. I work with reality where new experiences, new competitors to build trust, loyalty and economic value, is a businesses to continually align to changing customer and new business models are continuously resetting challenge New Zealand CEOs must embrace – it’s preferences, developing ways to maintain an edge. customer expectations. They also lead the adoption too vital to success and moving too fast not to be of a host of new technologies such as artificial treated in every CEO’s top 3 areas of focus. This intelligence, machine learning, bots and predictive New Zealand report explores many top-line findings analytics, all which radically change the engagement and introduces readers to the global study and eight Markus Poppe and interaction experience with customers. years of research. However, there are many more Customer Experience Strategist insights to share and we welcome any conversations The leading global organisations such as Singapore I work with clients to understand the that help you to shape future customer experiences Airlines, Alipay, Topdanmark, Taj Hotels Resorts KPMG Customer Experience Excellence and make New Zealand prosper. methodology and apply it to their customer and Palaces, Apple, Marriot, Lush, KLP and QVC insight mechanisms. From this I develop combine mastery of the fundamentals of customer Simon Hunter insights for client’s customer segments experience with the ability to command a first mover Partner, Advisory and products in order to increase profitability. advantage by seamlessly integrating technology into customer experiences. Tomorrow’s experience, today 5 A New Zealand Story

About this research

Contents KPMG’s Customer Experience

About this research 5 Excellence Centre is an The Six Pillars of Customer international think tank, dedicated Financial Grocery services retail Experience Excellence 8 to turning global customer Trending in New Zealand 10 The economics of customer experience best practice into experience excellence 12 effective business results. Non-grocery Restaurants New Zealand results 14 KPMG has drawn on its Customer Experience Excellence Centre retail and fast food methodology, supported by the centre’s eight years’ experience New Zealand Top 10 in the field, in its analysis of the customer market experience. Farmlands Co-operative Society 16 Research for this survey was carried out in December 2017 via an online research survey sent to a nationally representative customer Air New Zealand 18 sample. To be able to answer questions about a brand, respondents Logistics Utilities Kiwibank 20 were required to have interacted with that brand within the previous New World 22 six months. 2504 consumers commented on 124 Kiwi brands. ASB Bank 23 At least 100 respondents per brand were required for that brand PAK’nSAVE 24 to be included in the final research results. 62 brands made the Unichem 25 cut, and KPMG New Zealand also conducted primary research Telecoms Travel and Mitre 10 26 on selected companies from each of the sectors during the first months of 2018, to gather further customer experience insights. hotels Southern Cross Healthcare 27 Skinny Mobile 28

Sector review Financial Services 30 Entertainment, leisure and Retail Industry 32 logistics Agri Business 34

Creating the customer-centric organisation of the future 36 Fragmenting customer journeys 38 Understanding tomorrow’s customer 40 Customer experience checklist 44 Tomorrow’s experience, today 7 A New Zealand Story

KPMG Global Customer Research:

Customers were asked to respond to questions Research results were channelled to give an years of ongoing relating to each pillar for each brand they had assessment of Customer Experience Excellence research interacted with in the previous six months. Brands (CEE) in New Zealand and to prepare a State of the 8 were then assigned a score out of ten for each of Nation performance analysis. This includes a ranking The Six Pillars and these were combined to give of New Zealand brands by Customer Experience an overall customer experience score, followed Excellence score as awarded by customers. This by an evaluation of each brand’s delivered report presents the Top 10 customer experience customer experience. brands and shines a spotlight on both global and New Zealand customer experience insights across Targeted questions enabled a more in-depth key industry sectors. + exploration of respondents’ brand experiences when interacting through different channels i.e. online, by The Six Pillars are the DNA of every outstanding 170,000 phone or face-to-face. Customers were also asked to customer experience and the fuel that powers fast consumer interviews indicate how likely they were to recommend a brand business growth. As the fundamental components (Advocacy) and to repurchase (Loyalty) from them. of an ideal customer experience, The Six Pillars are the core structure around which this research is built. This analysis is therefore based on quantitative research data, verbatim customer feedback and various brand interviews. Together, these elements offer a detailed snapshot of New Zealand’s customer cross-sector experience performance. The characteristics of the brand reviews New Zealand market were then compared against 2,300 global trends identified by the parallel research of thirteen other markets, and incorporated into KPMG’s international, large-scale customer experience study.

2 million + consumer valuations

markets covered 14 by 2018 Tomorrow’s experience, today Tomorrow’s experience, today 8 9 A New Zealand Story A New Zealand Story

For almost a decade, we have Personalisation Resolution measured The Six Pillars of Using individualised attention Turning a poor experience The Six to drive emotional connection. into a great one. Customer Experience Excellence, Personalisation is the most valuable Customer recovery is highly important. deriving information from millions component of most experiences. Even with the best processes and It involves demonstrating that you procedures, things will go wrong. Great of customer evaluations on understand the customer’s specific companies have a process that not only Pillars of thousands of brands. We found circumstances and will adapt the puts the customer back in the position experience accordingly. Use of name, they should have been in as rapidly as that the leading organisations individualised attention, knowledge of possible, but also make the customer preferences and past interactions all add feel really good about the experience. demonstrate mastery of these up to an experience that feels personal. A sincere apology and acting with pillars and are outstanding at urgency are two crucial elements of Customer successful resolution. all of them. Integrity Being trustworthy and Through more than two million evaluations across Time and Effort engendering trust. Experience multiple markets, six fundamental components Minimising customer effort and of every great customer experience have been Integrity comes from consistent creating frictionless processes. identified and validated – these are The Six Pillars organisational behavior that demonstrates of Customer Experience Excellence. trustworthiness. There are trust-building Customers are time-poor and increasingly events where organisations have the looking for instant gratification. Removing The Six Pillar model of customer experience best need to publicly react to a difficult unnecessary obstacles, impediments and Excellence situation, and trust-building moments bureaucracy to enable the customer to practices was developed to provide a precise, where individual actions by staff add up achieve their objectives quickly and easily usable definition of the kind of emotional outcome to create trust in the organisation as a have been shown to increase loyalty. a successful experience needed to deliver. This whole. For all customers, it is the degree Many companies are discovering how came from issues with defining and explaining to which the organisation delivers on its to use time as a source of competitive customer experiences, plus associated measures promises that is consistently top of mind. advantage. Equally, there are clear cost such as NPS or CSAT. While these concepts remain advantages to saving time, as long as useful for describing the symptoms of a successful the other pillars are not compromised. experience, most organisations found they did Expectations little to direct or define what good results look like. Managing, meeting and Empathy Understanding customer best practices was largely exceeding customer anchored in case studies and anecdotes, rather than expectations. Achieving an understanding scientific rigor. of the customer’s circumstances Customers have expectations about to drive deep rapport. The pillars are inextricably intertwined, and when how their needs will be met, and these combined, provide a powerful mechanism for are increasingly being set by the best Empathy is the emotional capacity to brands they have encountered. Great show you understand someone else’s viewing how well customer experience is delivered organisations understand, deliver and experience. Empathy-creating behaviours across channels, industries and company types. – if appropriate – exceed expectations. are central to establishing a strong Some are able to make statements of relationship and involve reflecting back They are rooted in human psychology and clear intent that set expectations (“never to the customer that you know how motivation, are relevant across business-to-business knowingly undersold”) while others set they feel, then going that one extra step (B2B) and business-to-consumer (B2C) companies the expectation accurately (“delivery in because you understand how they feel. and are as meaningful to employees as they are 48 hours”) and then delight the customer to customers. when they exceed it. Tomorrow’s experience, today Tomorrow’s experience, today 10 11 A New Zealand Story A New Zealand Story

Our in-depth review of Customer Leading CX brands in New Zealand Experience in New Zealand Air New Trending in explored over 124 New Zealand Zealand Kiwibank New World brands against the Six Pillars of Farmlands 02 03 04 Customer Experience Excellence. Co-operative New Zealand From our analysis, four key trends became clear: 01 05 ASB Bank 06 Pak’nSave 07 Unichem Customers embrace brands that show a distinctive Kiwi personality Southern Cross Skinny Defining what is or is not a ‘Kiwi’ personality can be a Non-grocery retail Mitre 10 Healthcare Mobile tricky task, especially to Kiwis themselves, but when 08 09 10 you look through the data a combination of factors can be seen working together for successful brands in the New Zealand market. Customers interviewed about the leading New There can be a desire to capitalise on all new Customers are voting with their wallets Zealand organisations, articulated a strong sense of digital trends, but the key for organisations in the for the companies that deliver exceptional pride in the brands they associated with. This pride New Zealand market is to focus on the digital customer experiences was found to be highly correlated with positive trends pathways that create an experience reflective of Globally, the correlation between increased consumer towards loyalty for that brand. When you look at the brand, while being frictionless for the customer. willingness to pay and customer experience has top three brands (pg.16-21) there is an element The time and effort put into face-to-face interactions never been clearer. As we see leading New Zealand of this Kiwi personality that goes beyond a name: must be replicated through online efficiency and brands differentiating in the market by delivering It’s an organisation’s drive to personalise and omni-channel experience. exceptional experiences, we also see revenue customise offerings that resonates with the increases from the value added – proving this global New Zealand consumer. Customer needs in New Zealand are trend is true to our context. Forrester has quantified changing rapidly A uniquely personalised experience expresses a the potential economic value in their annual Customer value placed on the customer from the organisation. With only a one in four chance that our population Experience Index. They show that with an annual In the best cases, how a customer experiences a growth will decline by 2060 (Statistics New Zealand) incremental revenue increase of $2.44 per customer service or product is part of how the brand innovates changing demographics and new global competitors for ‘big-box retailers’ and $8.27 for traditional retail and enacts their core purpose. are increasing the pressure on New Zealand banks, this value-add equates to total revenue companies to adapt to changing customer needs. improvements of $244M per big-box retail company Personalisation is the most important pillar in and $124M per traditional bank, based on average customer experience excellence for the New Zealand As customers age and more people migrate from number of customers per company. consumer. It’s akin to hosting someone well, coupled overseas, customer preferences begin to shift. with an ingenuity to alter something standard in order For example, one older New World customer wrote Of all New Zealand consumer responses, brands that to meet the current need. that as a single, older person she liked New World were perceived by consumers as offering excellent because she could buy individual fish compared to value were three times more likely to be a leader New Zealand companies need to master other stores where she had to buy an entire package (top 10 overall) in customer experience across the digital experiences of fish. This better suited her needs as she couldn’t Six Pillars. This relationship between creating value eat the package of fish on her own and saved money for the customer and a company receiving value “Top 10 brands by With accessibility to international distribution perceived consumer despite the more expensive cost per unit. from the customer is not just a short term economic chains that are now quicker than the national postal benefit, but is also reflected in customer loyalty. The idea of importing a favourite product or buying value are 3x more system, and the rise of Kiwi made digital exports, New Zealanders have pride in the brands they duty-free is starting to dissolve as the global economy likely to be a Customer the expectations of Kiwi consumers have shifted. connect with, and have a high degree of loyalty to becomes more interconnected every day. With Experience leader.” Customers cited the desire for experiences that are the brands that provide personalised interactions and Amazon’s recently launched ‘International Shopping’ straightforward, employees who are responsive and outstanding experiences in our changing market. KPMG New Zealand situations that do not keep them waiting. Kiwis can shop over 45 million products that ship 2018 CEE report from the United States. – KPMG New Zealand Customer Experience team

Source: Forrester’s Customer Experience Index Online Survey, US Consumers 2016 Tomorrow’s experience, today 13 A New Zealand Story

The financial analysis we conducted this year between the top 50 brands The economics of customer and the bottom 50 shows that the customer experience masters have:

experience excellence EBITDA growth of Generated

Revenue growth 202% at an aggregated level $25bn more in revenue 54% Many organisations believe that treating the customer larger than the well must have a positive impact on commercial bottom 50 outcomes. This year we tested this belief using actual data. Our analysis provides reinforcement that +$25bn incremental commercial benefits accrue from steering the organisation to invest in a competitively superior $1.5bn customer experience. % 38of In terms of revenue growth, EBITDA and overall $1bn Bottom customer experience excellence progress, we also organisations... 50 brands see a positive story for the customer experience leaders when compared to the customer experience laggards. Whilst at the high-level we can be very confident that customer experience drives the commercial outcomes of a firm, just being nice to customers is not enough. It is necessary to really understand the economics of achieving customer experience excellence and to understand the true ...are more likely to report relationship between fixed and variable costs when it comes to delivering a superior experience. greater profitability than The Six First order Second Shareholder This is more than simply linking customer experience their competitors if they Pillars results order results drivers improvement to customer value. It is understanding the structural costs of delivering the current are ‘customer-centric’. experience versus the structural costs of Source: KPMG Global Customer delivering the target experience. Experience Excellence Report, 2018 Lower In the new world, where customer journeys are acquisition costs becoming a significant component of organisation Acceleration design, it has become much easier to relate costs Repurchase Lower cost of cash flows to experience. The top companies understand this loyalty and are improving their customers’ experience to serve and reducing their costs to serve by designing Increased Cross sales unnecessary costs out. Stable cash flows client base The leading companies in our research demonstrate Shareholder Customer experience Lower price a clear understanding of the link between the quality Lower volatility value optimisation is a real sensitivity of the experience being delivered and value created. Higher price /vulnerability opportunity to create They use return on investment (ROI) modeling to value, by delivering enable the prioritisation and optimisation of the multiple, tiered Positive word Higher sales Higher initiatives that will drive the customer experience. commercial outcomes. of mouth residual values They also understand whether the customer experience they are delivering is under- or over- Positive engineered financially. reputation

This analysis is based on publicly available financial information for the CEE measured organisations across Australia, France, Italy, UK and US. Not all organisations have publicly available financial information. This analysis takes into account the latest available figures at the time of publication. All data is collected by KPMG Global Services team. Source: KPMG Global Customer Experience Excellence Report, 2018 Tomorrow’s experience, today 14 A New Zealand Story A Luxembourg story New Zealand results

Of The Six Pillars, New Zealand New Zealand Pillar Performance Customer Experience Excellence (maximum of 10 points) .2% performs best on Time and Effort. (CEE) scores 45 Our analysis shows that many ersonalisation Compared against international best practices CEE score above 7 companies are successfully using and customer experience performance in other Time and Effort, and Personalisation, nterity countries, New Zealand brands are delivering as a source of competitive advantage good customer service. Achieving broadly similar results, half (50%) of the brands included in this in the local market. xpectations study score between 6 and 7, with an overall average CEE score of 6.92. As in many other countries, customers in New Zealand esoltion are time-poor and are increasingly seeking seamless Based on the eight years of research undertaken interactions. By removing unnecessary obstacles and by KPMG’s Customer Experience Excellence red tape, New Zealand brands allow customers to Time and ort Centre, a brand is often considered “outstanding” achieve their objectives quickly and easily, boosting with a CEE score of 8 or more, although cultural positive customer engagement as a result. and contextual factors need of course always mpaty to be taken into account so that this score can Empathy - the emotional capacity to show that slightly vary from one country to another. you understand and care about another person’s experience - is the weakest of The Six Pillars, both in New Zealand .8% New Zealand and the other thirteen countries as well. 54 Strong performance on Empathy requires brands to have a deep and comprehensive understanding of their CEE score below 7 customers’ lives and circumstances, allowing them to reflect back to customers that their feelings and New Zealand Sector Comparison experiences are recognised and understood. (maximum of 10 points) New Zealand customers’ needs and expectations are best met by brands within the Financial Services 1 inancial serices sector, such as retail banks and insurance companies. With an average score of 7.30, this sector is leading 2 Nonrocery retail the field on customer experience, and outstripping the 3 rocery retail national average by 5.5%. 4.8% With a summer beach being less than a days 4 Trael and otels drive from a busy ski field, Kiwis are often on the 5 tilities CEE score below 6 move and keeping in touch is a must. However, Telecommunications is New Zealand’s worst 6 estarants and ast ood performing sector, scoring 7.8% below the average. 8 ntertainment, leisre and loistics This is an issue not only relayed by customers on an individual level, but a growing concern we are hearing 9 Telecommnications from businesses. A notable exception in this sector is Skinny mobile (page 28) who achieved a top 10 ranking by understanding a niche youth market.

Next: New Zealand Top10 brands and sector reviews > Tomorrow’s experience, today Tomorrow’s experience, today 16 17 A New Zealand Story A New Zealand Story A Luxembourg story A Luxembourg story

Case Study Farmlands Co-operative “We try to anticipate the needs and wants of tomorrow’s 2018 NZ CEE Society customer, on the one hand st brand ranking: 1 by expanding the base of our Farmlands has been an important part of rural communities “The most compelling ‘product’ we have knowledge and analysis of the for more than 50 years, providing agri supplies and services to offer is the quality of our people – The Six Pillars: nationwide. It is New Zealand’s largest co-operative by industry we are a key part of, Scores vs Industry Average member base, servicing over 65,000 shareholders across Farmlands’ staff. It is their knowledge and so we can see what’s heading various farming disciplines and farm sizes. experience and advice and concern that down the track towards us; Farmlands’ success in customer experience can be attributed cement enduring customer relationships.” and on the other hand by to their focus on their number one customer: the Farmlands Farmlands staying close to our customer/ shareholder. Their shareholders are valuable not because they CEO, Peter Reidie are stakeholders, but because they are their loyal and repeat shareholders so we find % % +9 +12 customer base. These shareholders rely on Farmlands for all Farmlands’ stores are specially designed to suit their ourselves on the same page of their farming needs, knowing that they will always deliver. customers’ unique needs with drive-through bays and room in terms of what ‘needs and There is an intimacy in the relationship the Farmlands brand for vehicles and trailers. Customers praise their wide range wants’ actually are.” has with its customers. They gain trust by being honest and of stock catered to all farming requirements, making Farmlands open, and by making communication a two way dialogue. a one-stop-shop. When visiting Farmlands, customer service Farmlands and personalisation is taken to the next level. Not only do CEO, Peter Reidie % % employees excel at the fundamentals, such as knowing +9 +6 “We don’t just ‘market’ to our customer/ customers by name and what their business is, but employees shareholders, we communicate constantly often know customers so well that they will already have with them – the good, the bad and what the customer needs waiting before they step foot into everything in between.” the store. What ties all of Farmlands’ offerings together is the Farmlands “Excellent company to deal Farmlands card, a credit account that allows shareholders to consolidate with. Has so many partners now CEO, Peter Reidie +7% +12% all purchases across their services, and across an extended which makes my accounting network of 7000 card partners. Shareholders have one monthly By staying close with their customer, they have a strong bill, and are rewarded through rebates and their ‘choice work much smoother, one alignment between customer expectations and what rewards’ points system. Additionally, any transactions are as bill to Farmlands which pays they deliver. simple as asking for an item to be put onto their account. multiple companies.” Farmlands has a new purpose “to reinvent the Farmlands Farmlands extended commitment to customers can be seen Cooperative Spirit, ensuring our shareholders’ future success Farmlands Customer † through their interwoven presences as part of New Zealand’s is at the centre of everything we do.” Farmlands are delivering local communities. Their sites comprehensively service New on this with new focus on customer, and operations better Zealand’s farming areas whether large or small, each carrying tailored to their shareholders’ interests. They have divested their own unique stories. Farmlands also understands the in divisions that do not suit, while providing more ‘whole of variations of farming across New Zealand’s provinces, with business’ opportunities for shareholders by leveraging the different solutions to suit unique climates and challenges faced. “I went in for two specific items scale of the co-operative. “They know who you are, so and the assistant knew exactly you don’t need to bring out Their stores’ way of working combined with their agri-focused where they were. They were “As a co-operative, we were formed by your card too often.” people allow for a high level of service personalisation New Zealand’s rural communities and we side by side in a logical order. and flexibility. This is where Farmlands truly distinguishes Farmlands Shareholder I was served by a smiling, themselves from any other customer experience. Customers recognise and value the power of staying trust that no matter how unique their needs, Farmlands staff close to our communities.” capable staff member and felt will understand their situation and go above and beyond to I was a valued customer.” meet them. Farmlands CEO, Peter Reidie Farmlands Customer

† Farmlands Annual Report 2017 Tomorrow’s experience, today Tomorrow’s experience, today 18 19 A New Zealand Story A New Zealand Story A Luxembourg story A Luxembourg story

Case Study Air New Zealand

Air New Zealand is New Zealand’s national carrier and a In addition, the customer is embodied in the safety videos publically listed company, with the New Zealand Government and announcements that Air New Zealand produces. 2018 NZ CEE as their largest majority shareholder. Air New Zealand operates New Zealand’s star rugby players, spectacular scenes of brand ranking: 2nd passenger and cargo flights in the domestic, short haul New Zealand landscape, and references to famous movies “My last experience with Air international and long haul international markets. made in the country add excitement and ingenuity to the New Zealand was very good. Air New Zealand experience, crowning it a clear winner in They’re held in high regard by Kiwis – a direct product of the New Zealand brands that customers identifies with and My partner became ill on the The Six Pillars: Air New Zealand’s decision to position itself as one of the feel affiliated to. Scores vs Industry Average most customer-centric companies in New Zealand. Under flight and the air hostess was the leadership of Sir Ralph Norris, the company went through Air New Zealand has been ranked as the global “Airline of so helpful, getting him extra a dramatic culture shift from “we fly planes” to “we fly people”, the Year” for the fifth consecutive year by AirlineRatings.com drinks and anti nausea pills catapulting Air New Zealand from the brink of insolvency in – no small feat given the hyper-competitive global 2001 to one of the most innovative and profitable airlines airline environment. and checking on him regularly”. in the world. Many customers who ranked the brand highly were impressed Air New Zealand Customer +11 % +11 % by the friendliness and warmth of the cabin crew, who went “We have a really clear internal sense the extra mile and took note of their personal needs. of purpose which is to supercharge New Zealand’s success. Our purpose “Airlines are highly operational and is bigger than flying people from point A therefore susceptible to events beyond our “We were very happy with to point B – it’s about connecting control such as adverse weather. It is how +12% +11 % the down to earth service, New Zealand with the world.” you act in these moments that distinguishes the whole experience Anita Hawthorne your brand. We’ve been continuously was drama free.” General Manager of Customer Experience looking at ways to enable our customers to self-serve and take control of their travel Air New Zealand Customer Sir Ralph engaged Air New Zealand’s top 800 leaders in discussing and acting on insights from customer feedback and experience during a disrupt. This means +9% +12% observations, to find out what customers valued and what they can get in touch with us at a time and they hated about the flying experience. They identified that in a way that’s convenient for them.” customers loved the friendly, outgoing and slightly tongue-in- cheek humor that typifies Kiwis – and this provided the catalyst Anita Hawthorne for change. General Manager of Customer Experience Staff were empowered to exhibit their warm, welcoming Kiwi personalities, and place the customers at the heart of everything they do. Over twelve years later, this customer- centric mindset is more ingrained than ever, with consistent top-notch customer service. Air New Zealand continues to lead the airline industry with customer innovations such as the Airband, a device which tracks the progress of children traveling unaccompanied and sends updates to nominated guardians; and the Biometric Bag Drop, designed to speed up the check-in process. Tomorrow’s experience, today Tomorrow’s experience, today 20 21 A New Zealand Story A New Zealand Story A Luxembourg story A Luxembourg story

Case Study Kiwibank

Formed in 2002 by NZ Post, Kiwibank positions itself as As macro-environmental factors arise, such as Kiwibank’s “a bank that provides real value for money that has Kiwi values branch network potentially becoming smaller (due to lower 2018 NZ CEE mail volumes and, therefore, less NZ Post foot traffic) Kiwibank rd at heart, and that keeps Kiwi money where it belongs - right brand ranking: 3 here in New Zealand”. Kiwibank’s customers strongly identify will have to adapt and innovate to continue to be a leader “I don’t understand why all with this sense of purpose, which distinguishes Kiwibank from in customer experience. However, they are well positioned Kiwis aren’t with Kiwibank their Australian-owned competitors. to take these changes in stride, with an exceptionally loyal The Six Pillars: customer base who are proud to bank with an iconic but go with Australian banks. Their aim to serve New Zealanders is reflected in Kiwibank’s New Zealand institution that provides outstanding service. I am trying to persuade them Scores vs Industry Average high scores across the Six Pillars, ranking third place overall to change one by one”. and first in the financial services sector. Pillars Kiwibank scored “Kiwibank makes a conscious effort exceptionally strong in were Personalisation, Empathy Kiwibank Customer and Integrity. to give their people a licence to bring Kiwibank’s focus on culture and personal connections is a key their personality to work and customers driver behind their high score for Personalisation. Kiwibank appreciate that. It is an intangible quality, % % +2 +3 utilises their network of NZ Post locations to provide localised, but often captured in customer comments personalised services. This resonates strongly with their customers, who are proud of their support for their local bank. such as ‘the Kiwibank person spoke like a normal person’.” “This particular branch has “They are thorough, helpful, polite, and Mark Stephen sensational staff who are genuinely interested in my needs. They are Kiwibank CEO not only friendly and helpful % % +3 +2 friendly and make me feel very welcome.” but professional... you get to Kiwibank Customer know them and the service is uncomplicated”. Trust and Integrity was another highlight for Kiwibank. Kiwibank employees are known for being authentic and Kiwibank Customer upfront about what they can do for a customer and what they +2% +3% cannot do. Rather than a product focus, Kiwibank take a more holistic approach to staff metrics and incentives. Kiwibank see themselves as “of New Zealand for New Zealand” and show this through their “It’s ours” marketing campaign which reinforces public trust. Kiwibank’s commitment to creating exceptional customer experiences is visible across the organisation. This includes investment in everything from digital innovation to transforming the company’s operating model to be completely centred on the customer. An example of commitment to customer innovation is their “Future You” platform that was launched last year by Kiwi Wealth. This online retirement planning tool helps members not only make informed decisions about their retirement, but also understand why they should make certain decisions, and has been recognised internationally for leading innovation using augmented reality. Tomorrow’s experience, today Tomorrow’s experience, today 22 Tomorrow’s experience, today 23 A New Zealand Story A New Zealand Story A Luxembourg story A LuxembourgNew Zealand storystory

Case Study New World ASB Bank Case Study

Founded in 1963, the New World supermarket brand now Formed in 1847, ASB Bank is a subsidiary of the Commonwealth includes over 140 independently owned and operated retail Bank of Australia, offering a range of financial services, including 2018 NZ CEE grocery outlets, connected through either their North Island or retail, business and rural banking, and funds management and 2018 NZ CEE brand ranking: 4th South Island Foodstuffs co-operatives. This structure enables insurance. ASB strives to deliver outstanding customer service, brand ranking: 5th New World’s store owners to leverage the resources of a maintaining an innovative nature to consistently better the user large organisation to better serve their customers’ needs, experience. Their products are built with a customer focus, while providing an experience tailored specifically to their aiming to make everyday banking a fast and simplistic process. The Six Pillars: The Six Pillars: local community. It is a tribute to the co-operative ownership ASB was an early pioneer into digital experiences for Scores vs Industry Average structure that New World not only ranked first in New Zealand’s Scores vs Industry Average their customers and continues to be a digital leader today. CEE Survey for the grocery retail sector, but also joined three Their digital journey began by being the first New Zealand bank other co-operatives (Farmlands, Mitre10 and PAK’nSAVE) in the to offer internet banking in 1997 (FastNet Classic) and mobile overall top ten. banking in 1999 (ASB Mobile). Current customers recognise New World is known by many Kiwis for their well-loved ASB as an innovator, with a strong reputation for their user % % customer engagement campaign, the ‘Little Garden’ collectibles friendly app and exceptional customer service. % % +6 +7 programme which is run year-on-year. These eco-friendly +2 +1 This innovative culture suggests why ASB scores highly in Time collectibles bring joy to adults and children alike. Another & Effort – their technological advances allow customers to popular initiative began in 2017 when a $0.05 refund was given communicate with them with ease and when it suits them. In to customers who brought their own reusable shopping bags. 2016, they launched ASB Virtual, a contactless payment system This not only delights environmentally conscious shoppers, but supported by Android phones, allowing for faster transactions is also in line with the organisation’s corporate responsibility and limiting the need for customers to carry cards. More strategy, which seeks to “constantly strive to serve the % % recently, ASB designed a digital assistant, Josie, which supports % % +6 +6 community better.” +2 +2 ASB teams with its small-to-medium business customers. Josie In addition to positioning themselves as a retailer who do the is built off an artificial intelligence enabled platform to answer right thing, New World has made a real step-change towards and respond to customer questions. becoming a truly customer-led and data-driven business. ASB maintains trust by ensuring a strong human connection to Understanding customer behaviour, wants and needs is a top customers alongside their future digital improvements. This can priority, and they have invested in customer insights initiatives be seen through the highly personalised in-store experience such as tracking Net Promoter Scores (NPS), a measure of +4% +6% where staff help customers familiarise themselves with ASB’s +3% +1% customer satisfaction, and their Clubcard programme. By the digital channels. They show customers how to sign into their end of 2016, one million actively engaged Clubcard members accounts and best help themselves online going forward. It’s were scanning their loyalty card on an average of almost two this holistic approach which communicates the integrity of their thirds of all sales. These efforts allow New World to continually services and encourages a high degree of loyalty with many further its everyday customer experience through the customers bank with ASB for decades. refinement of its service and product offerings. New World further recognises that valuing their customer’s “ASB has worked hard to ensure our “I have shopped regularly here time and effort is an important part of the customer experience. “Just a brilliant bank. Personal for years. Staff are pleasant To minimise the effort required to choose from New World’s customers receive an experience that service in branch is great.” product selection, New World ran their own Beer & Cider is consistent with their expectations and and very helpful. Prices are ASB Customer Awards for the third year running and Wine Awards for the 14th the promise our brand sets. We are never competitive – especially their year running in 2017. Customers’ time and the importance of good specials.” staying relevant were key drivers behind New World’s emphasis satisfied with the status quo and are on giving more flexibility to customers by launching ‘iShop New constantly searching for ways to improve.” New World Customer World,’ their mobile shopping app, providing a ‘click and collect’ Simon Tong or ‘click and deliver’ service. Executive General Manager, Digital, Data & Brand “ASB has been our main bank for twenty years. We always have a great experience with them, especially service.” ASB Customer Tomorrow’s experience, today Tomorrow’s experience, today 24 25 A New Zealand Story A New Zealand Story A Luxembourg story A Luxembourg story PAK’nSAVE Unichem

Founded in 1985, PAK’nSAVE is a chain of 57 discount retail grocery Unichem is a nationwide network of over 290 pharmacies that locations. Although traditionally comparable in layout and fittings provide prescription services, over the counter medication, health to a ‘food warehouse’, in recent years PAK’nSAVE has invested services, products and advice. It is the largest pharmacy brand heavily in branding and refurbishment programmes. Placing sixth in under the Green Cross Health parent group, which has a strong New Zealand’s Customer Experience Excellence (CEE) Survey 2017, commitment to the health and wellness of New Zealand. Its high PAK’nSAVE has demonstrated a unique ability to exceed customer rank in the survey is reflected in respondents’ comments that Case Study note its friendly and knowledgeable staff as well as convenience Case Study expectations whilst still living up to their policy of ‘New Zealand’s lowest food prices’ (as proven by Consumer Magazine confirming provided by prescription and delivery options. It is a leader in New PAK’nSAVE’s provision of the cheapest supermarket shopping in Zealand’s non-grocery retail sector, receiving 2nd place. New Zealand for the last 15 years). Unichem positions themselves as health professionals – a 2018 NZ CEE PAK’nSAVE realises that their customers’ world is changing. trusted source of support and advice beyond simply a retailer of 2018 NZ CEE brand ranking: 6th Rising household debt, 1-in-3 families having a solo parent and pharmacy products – through their ‘expert care + advice’ offering, brand ranking: 7th less planned and more frequent shopping habits have necessitated and insightful medical knowledge demonstrated by staff. PAK’nSAVE to live up to their position as a retailer who knows Customers love the extent of care given and praise staff’s ability The Six Pillars: New Zealanders well. But seeing the world from their customers’ to connect the right products and advice to suit each customer’s The Six Pillars: Scores vs Industry Average perspective requires more than strong brand choice, convenience specific health issues. This is shown in Unichem’s high score Scores vs Industry Average and a consistent store experience. At Christmas, Stickman – the in Personalisation, reflecting the level of individual and tailored company’s iconic mascot – became ‘the Host with the Most for support provided. Unichem staff are renowned for their friendly Less’ reflecting the chain’s empathetic respect for busy families attitudes and commitment to happily go out of their way for a who need to get all Christmas supplies in one place. To relate customer, with many elderly respondents valuing the extended to their customers’ everyday needs, PAK’nSAVE is also driven time and support that staff give to them when they need it. to personalise the grocery experience by launching their loyalty % % Unichem customers also trust that when they go to Unichem, % % +7 +6 programme: ‘Sticky Club’. This allows them to get the right staff will be respectful of their privacy. +4 +5 shopping content to the right person through personalised deals and communications. Unichem’s Living Rewards loyalty programme has been a big hit with customers. With over 1.5 million members, PAK’nSAVE knows that exceeding expectations is linked to the Living Rewards members love being able to collect points feelings and occasional memories created by the shopping on purchases and receive personalised, member-only deals. experience. This is demonstrated through recent campaigns, +6% +5% such as on their birthday, where ‘Stickman’ creates a celebratory +3% +3% atmosphere where both staff and customers dressed-up for “Our Living Rewards programme, provides photographs with Stickman as ‘the superhero of low prices’. us with insights about our customer’s For customers who prioritise healthier and environmentally- preferences and purchasing, helping us focused choices matters, brand standards have been introduced and PAK’nSAVE has sold an ever increasing range of both Fair improve the relevance and personalisation Trade and free range products such as coffee, tea, chocolate and of our communications and offers. We bananas. PAK’nSAVE has also placed emphasis on their support % % also utilise direct customer feedback via % % +3 +3 of Environmental Choice - the official environmental label in New +3 +7 Zealand, while also launching their ‘NZ Made’ marketing campaign Customer Radar, a real-time customer focused on ‘low prices on stuff made here’. service tool which gives each pharmacy Demonstrating a commitment to their communities, PAK’nSAVE the opportunity to turn poor interactions continues to support the Breast Cancer Foundation by selling pink into great ones.” grocery bags, raising awareness for men’s health issues alongside the Movember Foundation, and donating an average of 1.5 tonnes Debbie Yardley, Group Manager “I do my regular shop here of food per store each month to foodbanks, schools, community Customer Experience and Communications “I have been with them for as they’re the best for price groups and food rescue organisations. years. Friendly and efficient.” Unichem leverages an owner-operator model, where an and range.’ enormous level of community empathy is visible. In many Unichem Customer PAK’nSAVE Customer instances, customers establish strong connections with team members, who understand and connect with their unique individual needs. Customer excellence is demonstrated through health services such as vaccination services, prescription reminder services and, in some pharmacies, prescription delivery. “I find the service professional, “I did my Christmas shopping “Our pharmacists are the health coaches in friendly and supportive. The there and won a new BBQ. This their community – there to keep people well, times I have been it has had a was a great and memorable offering care and advice throughout their pleasant, relaxed feeling about experience that I have told lives, not just help to treat them when they it and I am always served by everyone about.” are sick.” non-judgemental people.” PAK’nSAVE Customer Debbie Yardley, Group Manager Unichem Customer Customer Experience and Communications Tomorrow’s experience, today Tomorrow’s experience, today 26 Tomorrow’s experience, today 27 A New Zealand Story A New Zealand Story A Luxembourg story A LuxembourgNew Zealand storystory

Case Study Mitre 10 Southern Cross Case Study Healthcare 2018 NZ CEE 2018 NZ CEE brand ranking: 8th Mitre 10 is a prominent New Zealand retail chain, specialising in Southern Cross is a group of independent health-related brand ranking: 9th hardware and trade supplies. It was established in 1974 and is businesses, comprising of New Zealand’s largest health a New Zealand owned and operated co-operative with over 350 insurance provider with over 860,000 members, and a charitable stores nationwide. trust that operates 19 hospitals and medical facilities, which The Six Pillars: provided over 75,000 treatments last year. The Six Pillars: Scores vs Industry Average Mitre 10’s co-operative model gives each individual store’s Scores vs Industry Average management the autonomy to create personalised experiences Southern Cross health insurance customers are delighted that resonate with local customers. Stores embrace the distinct by the organisation’s fast and efficient processing of claims, culture of their regional area, hiring local staff who genuinely convenient digital platforms and helpful service in difficult times. know and understand their customers. Responders feel that Southern Cross Health Society, the health insurance business, consistently delivers a personalised service Mitre 10 puts considerable time and effort into understanding that’s about the individual, through remembering names and % % their customers. By utilising captured data as a primary insight % % +4 +3 providing support that is applicable to the member’s +2 +2 tool, they are able to understand behaviour drivers and in turn unique situation. proactively meet their customers’ needs. They break down customer journeys to eliminate friction points and create In an effort to save their customer’s time and effort as well personalised service for distinct customer types. as to enable them to engage through their preferred channels, Southern Cross Health Society has made significant digital This approach is not limited to the customer, as Mitre 10 investments to streamline the process of buying insurance recognises the value of empowering their team members, % % and making claims, with more than 80% of claims now % % +4 +5 examining ways to remove the friction of store processes +1 +1 submitted electronically. to create mutual benefit for customers and staff. The new website ‘My Southern Cross’ has allowed easier “If it’s a pain point for our customers it will access to client details as well as transparent information on Southern Cross’s own performance and results. be a pain point for our team as well.” Southern Cross wants to partner with Kiwis to advance their Andrea Scown % % health and wellbeing. % % +4 +3 General Manager Retail Operations -1 +4 To help accomplish this, Southern Cross is continuously Mitre 10 maintains multiple points of engagement with its adapting services and facilities that support the unique needs customers, connecting to the DIY attitudes of New Zealanders of New Zealanders, all across the country. For example, through their ‘Easy As’ instructional videos and connecting a new chemotherapy delivery service in its Rotorua hospital through their social channels. was developed to help reduce the need for locals to travel for treatment. Customers are continually impressed by Mitre 10’s product “Probably my favourite store. offerings and their in-store and online shopping experience, Customers no longer simply want peace of mind from their “They were very friendly, I have never met an unhelpful while those specifically in the trade of building and construction insurance providers, but to also understand how they can make helpful and efficient – gave staff member, and always have recognised the ease of doing business - often serving early proactive decisions to live a healthier lifestyle. To meet this me a lot of confidence, and it morning customers before store opening times. growing demand, Southern Cross Health Society is placing an look forward to going to my increased focus on helping their members with preventative was resolved really quickly. Mitre 10.” “We have a very strong, insights-oriented customer healthcare, offering low claims and healthy lifestyle incentives. Superb service!” experience programme that is centred around This initiative has resonated well and is reflected in the Mitre 10 Customer understanding what our customers’ expectations are organisations high score in Personalisation. Southern Cross Customer today and what their expectations will be tomorrow. This programme utilises a combination of qualitative “We found it very convenient to have and quantitative research to understand what our instant approval and payment when customers feel from the moment they first connect “I find the staff at Mitre 10 to with us, and all the way through their customer we use approved providers rather than really helpful and informed. journey. We believe that you cannot excel at customer having to claim.” experience with a “one size fits all” customer strategy.” They know their products and Southern Cross Customer Jules Lloyd-Jones can give good advice.” General Manager Marketing Mitre 10 Customer Tomorrow’s experience, today 28 A New Zealand Story A Luxembourg story Global comparison Case Study Skinny Mobile

2018 NZ CEE Skinny Mobile is a prepay-only mobile network subsidiary of Spark New Zealand, aimed at the youth market. Skinny personalisation th brand ranking: 10 stands out as leader for New Zealand’s lowest ranking sector, Telecommunications, due to shaping their services towards is the most important pillar this defined market. The Six Pillars: They operate a no-frills model where non-essential features globally for driving loyalty Scores vs Industry Average are removed to keep prices low. Skinny’s business rationale is to strip everything back – customers only pay for what they actually want and are still able to enjoy the wider Spark network and coverage. integrity Skinny targets a very specific customer segment and understand exactly what these customers’ needs are. % % is the most important pillar globally +14 +12 Customers rave about the great value-for-money deals as well as frequent promotions that give them bonus data or minutes for driving recommendation for free. Customer feedback shows a strong appreciation of receiving added value to their existing plans or combos at no extra cost. Skinny has repeatedly shown they deliver what customers actually want through offerings like their ‘data binge’ % % feature that gives users access to unlimited data for between +19 +15 10 minutes and 12 hours. Labelled as ‘perfect for any online binging sessions,’ this demonstrates the company’s ability Top Pillars in to relate, stemming from a strong understanding of their user base. Skinny understands that their target customers are highly active New Zealand on social media and make a concerted effort to engage with % % customers via social channels. Skinny almost always replies +16 +15 with a sense of urgency and, when appropriate, brings humour Personalisation into their social posts, turning informal feedback left through Time and Effort comments into personal connections with their customers. Skinny takes the time to respond to all correspondence and issues, no matter how large or small they may be. In 2016, Skinny launched Skinny Broadband as well as Skinny “Brilliant, cheap and affordable Direct, to offer customers a wider range of products under their low price model. Skinny Direct, their online-only product prepay plan options for tight approach, is a further extension of their effort to provide only finances.” the most essential services in return for the best possible price to customers who desire convenience via a digital channel. Skinny Mobile Customer Skinny is an exceptional example of a company that understands their customer needs and knows how to effectively invest in customer experience. Despite being a Financial Non-grocery low cost provider in an industry that is normally difficult to Grocery 3 services retail retail differentiate, they manage to offer a unique product with the right combination of value, incentives and fun that resonates top sectors in strongly with their target customers. “The last time I topped up New Zealand I received 60 free minutes, it’s great when they do these promotions.” Skinny Mobile Customer Tomorrow’s experience, today 30 A New Zealand Story

NZ Sector Review Financial Services Strongest pillars Integrity New Zealand financial institutions are showing customers they stand for something beyond profits. They show concern for their people, the communities they are a part of and the What’s happening worldwide Whether you are a bank, an insurance company or What’s happening next? environment we live in. They in Financial Services? a wealth provider or manager, the expectations of want to act in the best interests There is an attitude to change putting the customer at the centre of everything you of their customer as they know Worldwide, as Financial Service brands are do must be forefront of everything, together with The sector is responding to the challenge. Banking it will drive customer loyalty. becoming increasingly homogenous in the eyes appropriate transparency and disclosure. organisations appear to be leading the way in of customers and loyalty becomes more fickle, responding to the new imperative of enhanced Time and Effort experience is viewed as a key differentiator and The sector is also responding to new customer customer experience and getting closer to the Financial institutions have all the bar is being raised in terms of what customers expectations around environment and social customer, and have the attitude for change. But pushed focus towards giving expect across the financial services sector. Digital responsibility. There is a reduced tolerance towards it is taking time and investment and requires, time back to the customer. developments mean people expect their bank unethical investments and lending to unethical for many, a change in which the organisation is Reducing waiting times, creating to provide similar levels of rapidity, reliability and industries and demand for sustainable and fairer structured and/or operates. Insurance providers are opportunities for customers to ease of access to what they would get when corporate behaviours. This again drives the sector to using online channels for customer ease in offering help themselves at their own interacting with other digital platforms like online review and amend their traditional suite of products products and using data to select/deselect risk. pace, along with reducing the shopping. Being able to provide this however is and service offerings to meet the expectations of The wealth management sector has been making number of ‘steps to satisfaction’, no easy feat. There is the requirement to really their customers. inroads in providing more transparent information are all ways in which financial understand customers’ needs and the journeys to its investors and offering new financial advice institutions have been able to they go through; to re-engineer processes and the The disruptors services and tools in response to customer needs streamline their experience. use of and types of technology to enable end-to- We see both non-traditional tech companies and and, more importantly, regulator demand. This Organisations are determined end digitisation and seamless experiences; and to financial and data-driven start-ups driving disruption will continue to be a focus for this sector and the to make things easier for their use analytics to obtain real insights about customer in the sector. Alipay and Apple Pay have appealing demands on it will only continue. customers and this is needs from the extensive data that is held. All customer propositions and banks here are choosing being recognised. of these are imperative for a financial services to partner to stay on the right side of the wave. Investment is needed organisation and will help to ensure products, The smaller start-ups are seeking to disrupt the The ability for financial services organisations to service offerings and experiences are designed to customer value chain in a number of ways, such as respond to the changing demands on the sector meet the needs and expectations of customers payment processing, product and service selection, will only be enabled with the right investment. and move the organisation from product-centricity “I use my mobile banking budgeting services and financial advice, and provide All organisations face the challenge of balancing to customer-centricity. app most days. It is data-rich, leaner operating models in doing so. This the increasing cost of regulatory compliance, forces sector incumbents to rethink their products with the need to invest for innovation, with the extremely well put Financial giants in Asia lead and service offerings and the mode in which they are requirement to continue to provide adequate together and it makes the way in driving enhanced offered. It also forces the incumbents to reassess returns to shareholders. Finding the right balance customer experience me feel in control of their operating models and whether part of the is difficult but essential. It often requires difficult (Singapore) my banking.” customer value chain can be outsourced through conversations to be had with key stakeholders partnership arrangements for example. DBS bank in Singapore has transformed itself with and consideration of joint venture or partnership New Zealand Bank Customer a customer-focused experience innovation strategy models to ensure an organisation is able to remain and used digitisation to obtain scale and become relevant to customers. Financial giants in Asia lead one of the region’s leading digital banks. DBS uses the way in driving enhanced analytics, cloud computing and artificial intelligence customer experience to simplify and improve customer experience. (China)

In China, Alipay are continuing to be a strong Financial institutions in New Zealand are having disrupter to the financial services sector. Once to adjust their customer experience offerings the domain of major banks, personal payment to deal with the continued pressure facing the and financial services are now being offered sector. These pressures are driven by industry in an integrated manner, alongside Alibaba’s disruptors, heightened consumer expectations and other consumers. the increased focus coming from the industry’s regulatory bodies. Tomorrow’s experience, today 32 A New Zealand Story

NZ Sector Review Retail Industry Strongest pillars Personalisation Individualisation requires customer data, and lots of it, to power customer insights. Paradoxically, in this age of privacy concerns, customers are increasingly reluctant to provide it. What’s happening worldwide? The continued rise of the conscious consumer New World is another strong leader, delivering a When customers do provide data digital grocery experience that rivals those of many Better connected customers Today’s customers have a well-developed sense there are two types of insights of what is authentic and what is solely intended international supermarkets. New World’s mobile that drive personalised individual While it may seem as it will be harder to capture to drive sales. With this, honesty and authenticity app makes it efficient for customers to quickly and experiences: Unique knowledge the attention of the consumer, in reality this is have emerged as the attributes that matter most easily shop online, having their groceries delivered about the individual customer, leading to more opportunities to engage and deliver to customers. Consumers, more than ever before, or ready for pick up in store. New World collates and Contextual knowledge about in the retail sector. Today’s customers are better are holding brands to a higher standard. customer shopping information and preferences, the customers’ circumstances. informed and better connected, which has seen resulting in a personalised and more efficient The combination of these two success come to brands that use multiple channels experience as the service is utilised. enables personalised experiences, to build understanding and listen. There is also an even when two unique customers opportunity to show brand agility through these Lush connects with consumers What’s happening next? trigger the same response. channels when interacting with the views on what matters of the customer. There are many exciting opportunities that will (Netherlands) shape the next generation of consumer retailing, Time and Effort New retail with the most significant of these lying at the mixing Customers expect a smooth Customers of Lush in the Netherlands say they love point of data and digital. In this modern age, most experience at all parts of the sale We are seeing an era of ‘New Retail,’ as standalone the product, love the people and love the mission. New Zealand organisations have access to broad journey. They don’t want to be online shopping models are becoming integrated It is a campaigning brand that communicates its and valuable sources of data, both internally and made to wait, and they shouldn’t omni-channel experiences that are fully customer- purpose and its pursuit of ethical relationships with externally – more so than ever. The challenge is not have a multitude of steps to take centric. The back end structural differences behind its people, its customers and the planet. From in sourcing this data, but being able to understand to reach their goals. online and retail supplies are eliminated, bringing spearheading anti-animal testing campaigns, to how to trust the data and pull out the insights, to increased flexibility and a consistent experience working to minimize packaging or using ethical Customers want to be then anticipate the future trends and proactively regardless of how the consumer chooses to sourcing methods, customers in the Netherlands communicated to openly and create customer focused solutions. interact. These new interactions are causing feel that each aspect of the Lush experience honestly, being made weary retailers to better recognise the touchpoints their reflects their own personal values and the moral Companies are able to realise the benefits of of pitfalls and educated about brands are exposed to – all the ways customers code that guides the business. more digital and technology based solutions with what they are purchasing. Savvy see, hear, try, buy or otherwise interact with your increasingly low investment costs. These can be customers can read straight brand. Each point is a chance to influence the used to save customers time in store, to impress through a weak proposition, individual, whether it is to begin brand awareness What’s happening in New Zealand? them into purchase or create new experiences they and are easily driven away by or deepen an existing connection. won’t find elsewhere. The real value in a digital a bad experience. From traditional to omni-channel investment will be realised when solutions can While many New Zealand retailers have invested be married to the personal data that makes up a in digital channels, many still struggle to provide Brick and mortar isn’t dead, retailers customer base. From here there is potential as Amazon proves it has ways the fluid levels of experience that customers are to build unique experiences that are aligned and to evolve demanding. For Mitre 10, who scored 8th overall in truly personalised to the individual. In grocery it can “If I want to buy (USA) this year’s CEE report, creating great omni-channel be building meals and diets to suit, while in fashion something from a store, experiences is a top priority. More and more Mitre 10 retailing it can be virtual wardrobes and looks made Amazon, the international e-commerce giant, is customers prefer to first research and review product I will look at their app/ entering brick and mortar channels with innovative to match. online then see and feel the product in person, and website first and if I technology. This comes to life in Amazon Go stores, While a digital transformation may seem like a fix to where customers can seamlessly shop without ultimately make a purchase in store. Mitre 10 strives don’t like what I see to dissect and understand these behaviors through stay relevant, caution must be applied as many large having to stop at a checkout counter. It shows that digital investments fail. This is often due to trying to I won’t go to the store.” offline retail can offer a significantly superior level customer journey mapping, with the goal of creating go digital simply for the sake of going digital, rather of customer experience when technology is applied. a frictionless buying experience. New Zealand Retail Customer than starting with a human problem and mapping a digital solution to fit. With these shifts, retailers with low digital maturities will be hit the hardest as these new iterations become the operating norm. Tomorrow’s experience, today 34 A New Zealand Story

NZ Sector Review Agri Business Strongest pillars Empathy A strong level of understanding between company and customer, driven by an emotional alignment. Agribusinesses know what their customers want, why they need their offerings and know what’s What’s happening worldwide? What’s happening in New Zealand customer, on the one hand by critical, taking ownership of issues as they arise. No more one-size-fits-all customer No industry is more vital to New Zealand’s success expanding the base of our knowledge Worldwide, respondents to the 2018 CEE reporting than agriculture, being the life blood and identify of and analysis of the industry we are Integrity many rural New Zealand communities, that without proved that when it comes to food, we’re pickier a key part of, so we can see what’s New Zealand agri-business it would not exist. At the core of agriculture are than ever before. Food consumers today care more heading down the track towards us; and players are among the best when the consumers to which farmers and producers than ever before about understanding where their demonstrating a high level of serve. However, the consumer is changing, and for on the other hand by staying close to food came from; how it was produced; and who integrity towards customers. agribusiness companies to continue to thrive, they our customer/shareholders so we find the people are who produced it. Gone are the days Many are long established must change as well. ourselves on the same page in terms of just maximising production and being able to companies which have acted stay in business. Having a customer-centric attitude is not new in the of what ‘needs and wants’ actually are.” in the best interests of their In order for New Zealand companies to stand out agribusiness environment. New Zealand’s major Colm Hamrogue customers for decades and in a globally competitive environment where real- rural co-operatives are built and focused with their Director, Strategy and Communications maintain a strong ‘do as they time pricing transparency drives commoditisation, shareholder customers front and centre. Relationships say they will do’ attitude. are built on trust and a mutual understanding This customer-centric culture enables Farmlands to food producers must shift to a consumer-focused, value based culture. To accomplish this, agri-food of operating environments, looking for win-win deliver an exceptionally high level of personalisation organisations have to change from delivering outcomes. We are seeing strong examples of to their customers, which in turn creates a high to an average to creating solutions that fit the customer focused business with companies like degree of customer loyalty and commitment to “ Good tasting food and specific desires of an individual. However, this Ravensdown, who are widening their appetite for the organisation. innovation and prioritising sustainability initiatives, helpful staff, it would level of variability comes with a cost, so success While New Zealand’s exports are worth a with the goal of providing long-term benefits be nice to have easier in markets depends on organisations doing the considerable $60 billion, unfortunately no more for their customers, shareholders and other work to identify the right consumers for the right than 12% of this is realised on shore before the access to what is in community stakeholders. products, including specific product attributes and farmgate, while the estimated value of these the food though.” the unique story behind where the food came from. exports at retail may be closer to $250 billion. What’s happening next? In order for New Zealand agri-food producers to 2018 CEE respondent, Shifting to a customer focused culture create and capture more of this value, they must commenting on a New Zealand undertake a similar shift by seeking to better food retail business Fairlife For agribusinesses to understand and deliver great customer experiences, the entire value chain, from understand their consumers’ preferences. By (USA) investors to farms to retail, have to work together to doing so, farmers and producers can grow and understand consumer needs. Farmlands Co-operative deliver products that are aligned to the attributes In the USA, Fairlife milk stands out for providing is in the business of doing just that. In order to that consumers care about most. By combining a “ Good choice and have a premium customer experience in a historically help New Zealand farmers prosper, they recently consumer centric attitude with the New Zealand more organic products, commoditised, price-sensitive marketplace. refocused their organisational strategy to centre agri-sectors’ appetite for innovation, there is the Fairlife accomplishes this by understanding the around their customers: potential for New Zealand to emerge as leading but prefer to find more key product attributes that consumers care about providers for the next generation of consumption. local food.” and communicating them in a way that resonates. This enables everyone in the value chain – including These key product attributes include how the “‘To reinvent the Farmlands Co-operative farmers, processors and exporters, industry good 2018 CEE respondent, commenting milk is ultra-filtered, providing consumers with Spirit, ensuring our shareholders’ future - organisations, councils, Maori trusts, iwi and on a New Zealand grocery retailer significantly higher levels of protein and calcium success is at the centre of everything we than a typical serving of milk. Another key attribute service providers – to create more value by better is the brand identity – which strongly promotes do’. To achieve a meaningful reinvention meeting future consumer expectations all over the animal well-being and sustainable farming. By the demands that we become relentlessly world, which in turn helps all of Aotearoa prosper. end of 2016, Fairlife was in 76,000 US outlets and customer-focused... We try to anticipate had a 79% increase in dollar sales versus prior year, all while selling their product for more than the needs and wants of tomorrow’s double the average retail price of milk. Tomorrow’s experience, today Tomorrow’s experience, today 36 37 A New Zealand Story A New Zealand Story

In the old days, when the primary What we found was that the firms that provide “Life event drift and the thing CEOs wanted to achieve the highest-rated customer experiences tend to redefintion of life stages be those that excel across all of The Six Pillars of affect not just customers, but Creating the was consistent, low-cost output customer experience excellence. And they are employees too. These shifts across their increasingly complex often the ones that structure their internal and external connections to align against four are changing the rules for manufacturing processes, the key attributes: almost every organisation customer- traditional ‘division of labour’ and impact the way they approach was an unmitigated think about culture and the success. overall management of centric A commitment to excellence change. As such, the roles But, in this day and age – when even manufacturers and competitive superiority of managers and leaders are trying to think less like manufacturers – the old are evolving rapidly.” organisational paradigm is no longer enough. organisation That is because today’s businesses are no longer High levels of staff engagement KPMG Global Customer centered around the manufacturing line – they are and employee experiences Experience Excellence Survey, 2018 centered around their customers. that connect with the customer experience Today’s organisations are striving to be organised of the future around ideas, concepts, individualised designs and unique personal experiences. In this world, success goes to those that are the most interconnected, An obsession with intertwined and creatively juxtaposed. The winners high-quality execution recognise that it’s about ecosystems, not functions; “59 percent of CEOs believe relationships, not divisions; and journeys, agility is the new currency not structure. of business.” The problem is that the vast majority of today’s Clarity on the economics leaders still manage functionally, not cross- of experience KPMG Global CEO functionally. With commercial advantage now going Outlook Survey, 2018 to those that are the quickest to develop quality connections both internally and externally, the need for a centrally organised and unifying set of principles that both encourages collaboration and Obviously, there are no silver bullets for creating drives towards the overarching mission and vision a more connected business. Rather, it requires is critical. organisations to take a holistic approach – to consider the organisation as a system with The challenges for CEOs and decision-makers will multiple connections that each need to be be considerable. Indeed, they will need to have one managed, nurtured and harmonised. It is the foot in the present and one in the future – and be whole, not the parts, that matter. able to shift their weight from one to the other – if they want to stay ahead of the game. We believe that – if organisations hope to prosper in tomorrow’s customer-centric business In this report, we leverage our consumer data to environment – they will need to overcome the help CEOs and decision-makers bridge that gap – limitations of the 18th-century organisational to find their footholds in the present and the future. design. And they will need to start thinking We provide examples of how the leading firms more holistically about how they embrace the are crossing this divide. We explore how they are technologies of the future to deliver tomorrow’s addressing the need to not just connect things customer experience today. today, but to connect to the ideas and technologies of the future to gain competitive advantage. Tomorrow’s experience, today 38 A New Zealand Story A Luxembourg story

Customers are increasingly Taking top spot in Australia, Singapore Airlines ‘mixing and matching’ as they (SIA) can attribute their success to their ability  to get closer to their customers and understand Fragmenting unbundle and then reconfigure their needs and requirements at each stage of the “If I want to buy something their buying experience to travel life cycle. This has meant looking beyond from a store, I will look at suit their individual needs. the touchpoints that are managed or controlled by Singapore Airlines to understand how value their app/website first and customer Organisations that react to is being added to the end-to-end experience if I don’t like what I see I the connected consumer and regardless of who actually delivers the experience. won’t go to the store.” Investments into a customer experience enable customers to re-bundle New Zealand retail customer in unique and personalised management (CEM) system have allowed the journeys company to listen and react to the customer’s ways are beginning to achieve voice as they moved through this unbundling a market advantage. and re-bundling process. This, in turn, uncovered opportunities to improve their passengers’ The arrival of the internet has enabled customers experience across multiple touchpoints. One of the “We want to ensure that to create their own customer experiences. It areas it identified was a need to catch up with their has been particularly true of the travel industry digital experience. Recognising the emergence of customers feel that their voice where customers have long been able to unpick the ‘ultra-connected traveller’, SIA set about creating is being heard and that their components such as flight, hotel, car hire and an app that reconnected and re-bundled different concerns are being addressed, transportation. components of the on-board and pre-boarding travel both online and offline.” experience for the benefit of its customers. More recently, customer configuration has also Jules Lloyd-Jones hit the retail sector. Customers may walk into a Here in New Zealand, food retailer New World General Manager Marketing at Mitre 10 physical store for information, but then purchase aims to integrate both online and instore shopping. online and have the product delivered and installed Examples include delivering healthy dinner kits, and (if necessary), all at a time of their choosing. The instore demonstrations with competitions to inspire process may involve several different entities, but it and incentivise customers to participate with the is seamless to the customer. brand. Customers in New Zealand note that the The reality is that this digital democratisation of brand demonstrates its Integrity through fair trade the purchasing process is fragmenting what has and a strong environmental focus. historically been a stable and predictable process. Rebuilding and integrating customer journeys is The leading organisations in our research are those a process of aggregation, selecting appropriate that are connecting their customer in unique and partners, orchestrating them and then presenting exciting ways by developing a network of ecosystem the options to customers in new and exciting ways. partners that enable and empower the customer Many of the leading organisations in our research are to bundle services and products in ways that suit using this re-bundling process to create a cohesive them best. These organisations realise they cannot whole that delivers on the brand promise. do everything themselves, but they can create an integrated environment where consumers can construct seamless journeys using the power of connected digital technology. Tomorrow’s experience, today 40 A New Zealand Story A Luxembourg story

While digital applications continue Generational surfing emerges for engaging this group in a way that resonates with their worldview. to automate existing processes, To understand the experience customers will expect tomorrow, organisations will need to look Looking at the leading companies, our Understanding they are increasingly being research indicates there are four areas where at millennials, Generation Z and their respective designed to solve a number of life parents at the same time. Being able to interpret technologies are playing a significant CX role: problems. What life problems can the interdependent changes and their impacts is called ‘generational surfing’, a process of focusing be solved by new technologies? —— Equipping employees with the tools tomorrow’s on demographic drivers of customer needs. and information to successfully resolve To find out, it is first necessary to The process is founded on the recognition that life customer inquiries at first point of contact understand the evolving customer. stages are shifting and extending, and life events —— Delivering high levels of customer And to do that, the leading aren’t as reassuringly predictable as they once personalisation and engagement customer were. While certain life stages may be enduring, throughout the customer journey organisations are using deep the way different generations approach and move customer understanding to design through them is showing signs of change. —— Pre-empting customer problems using remote diagnostics and internet- For companies, this evolution means anchoring tomorrow’s experience today. enabled technologies everything you do to your customers and looking The dominant thinking paradigm for organisations afresh at their motivation, attention, connection, —— Improving customer interaction and is ‘inside out’ – viewing the world through the watch and wallet to anticipate their needs, complaint resolution by enabling lens that has historically brought success for behaviours, trade-offs and choices as they move multiple mechanisms for contact. most organisations. But the disruptive nature from one life stage – or wave – to another. of technology and today’s discontinuous geo- Understanding these life event ‘drifts’ can help For many organisations, there are significant demographic trends means that this lens has businesses anticipate changing needs and barriers to adopting and getting value from become limiting for a company’s growth. preferences and can help companies ride the these technologies. Silo-based organisations, The paradigm that is proffered instead is ‘outside in’ waves of change. systems that reflect historic silos, legacy – where the lives and needs of the customer come infrastructure and limited resources all need first and are used to shape the strategy of The ‘Baby Boomer Echo Effect’ reconnecting in new ways. the organisation. For the first time in many generations we are While these two approaches are often presented seeing parents being educated by their children as alternatives, our experience suggests that rather than the other way around – a phenomenon  the leading organisations use both lenses known as the ‘Baby Boomer Echo Effect’. The simultaneously. They recognise that – if they want most obvious example is where digital, social to get to where the customer is going before their media and advanced technologies are adopted “Authenticity is especially competitors – they need to be able to predict first by millennials who then introduce them key unlocking the wallets customer needs before they emerge. to their parents. In fact, the boomer parental of customers of all ages. group is significantly influenced by their Millennials are having a deep offspring, perhaps more so than any previous generational demographic. impact on the generations that came before them (Boomers, The challenge for businesses seeking to capitalise on this demographic effect is to Gen X etc.) as well as the one deliver a mobile, unified and digitised customer that comes next: commonly experience that is affordable, sustainable and referred to as Gen Z.” meaningful. Artificial Intelligence (AI), chat bots and virtual agents, voice synthesis and a range of KPMG Global retail trends, 2018 machine learning technologies provide a platform

Source: Me, my life, my wallet, KPMG Global Customer Insights, September 2017 Tomorrow’s experience, today Tomorrow’s experience, today 42 43 A New Zealand Story A New Zealand Story

By 2019, millennials will outnumber Through a multi-dimensional lens called The Five Mys, organisations can gain insights that navigate the complexity of consumer decision making. Each of the Five Mys in isolation tell only part of the story: together baby boomers. As a generational they can help provide companies with a clear picture of the collective influences on today’s customer and how demographic, they have several those affect decisions, preferences, choices and spending. defining characteristics: % The Five Mys They are extremely connected to 38 their mobile devices; their rite of of CEO’s... passage is no longer their first car, but their first smartphone

They use social media apps My motivation My attention My connection My watch My wallet to communicate Show me that you Break through Recognise how Help me balance the Understand how “...believe that understand me, the noise to build I interact digitally constraints of time I make trade-offs what drives me, a relationship with others and and make the most between time their brand needs what motivates me. with me. help me offload of this resource. and money. They value convenience jobs to technology. and personalisation repositioning to

meet the needs Business impacts They are mobile and would happily of millennials.” move between companies if they Source: KPMG CEO Outlook, 2018 Knowing what Knowing how to get Getting smarter about Identifying the pockets Understanding the found a better combination of customers really value customers’ attention can customers through before life events yields trade-offs customers value and experience elsewhere in an experience and help target investment their connections new opportunities to make between time what’s setting the at the moments that contextualises big build customer loyalty and money can help benchmark can help matter, maximising data and generates and stickiness. identify the best They are predisposed to dealing with eliminate wasted efforts return on investment. actionable insights. future customers companies that are both purposeful and focus on the ones and expectations. that make a difference. and meaningful to them as individuals and the values they hold From push to pull to predict

They are reticent or less inclined to trust the established institutions Push – where we’ve been: Pull – where we are: Predict – where we need to go: a world in which customer focus meant in an age of digitisation, companies an evolving era in which the most developing and distributing products are increasingly able to refine and verify advanced companies take steps to and services based on the assumed their understanding of what customers understand and analyse a sophisticated or created needs of broadly defined want, and then personalise products, array of customer information so they can customer segments. channels and new ways to engage. anticipate and meet customers’ needs when, or even before, customers know what they want.

Source: Me, my life, my wallet, KPMG Global Customer Insights, September 2017

CUSTOMER EXPERIENCE CHECKLIST

Today’s customers are better informed, better connected and more demanding than ever before. Customer experience Do we recognise the customer from the start? Can we see their previous interactions quickly and easily? is overtaking price and product as the number one brand Welcome Are we able to see their omni-channel experience – have they just been on-line and called as a consequence? Are our people trained to greet and manage the interaction in a way that suits the customer’s personality? differentiator. Organisations are investing record amounts on customer-related initiatives, but not all are seeing a credible return on investment. Do our people know how to listen well? Do they have the questioning techniques to uncover the ‘meaning’ behind the words? Engage Do we have the emotional intelligence to respond with the psychological response the customer is looking for – reassurance, sympathy or urgency? Do we track digital pathways to provide insight for customer experiences online? Customer strategy Marketing, sales and service transformation Using innovative approaches to growth strategy, The KPMG team can help you to digitally enable Do we make it easy for customers to update their preferences? product development and new business models, and transform the effectiveness of your marketing, Do we capture personal data in a way that enables its careful use in the future? KPMG helps clients on their customer and market sales and service functions to create a connected Are we available to respond when and how our customers want us to? strategy. Our accredited strategy practitioners help enterprise – integrating front, middle and back Respond Do we have a central record of all insights pertaining to this customer? Can we quickly and remotely access information we need about a customer? organisations answer the questions such as ‘what office operation – to enable a more agile and Do we understand the segment they loosely fit into? to aim for’ (strategic investment) and ‘where to play’ responsive business. Are our communications to customers required and desired? (market and brand strategy). Customer-centric organisation Customer experience KPMG’s customer team can help you to cohesively Do we make it easy for our people to go the extra mile? Using the KPMG Customer Experience Excellence mobilise your business around your customers. Do we empower them to make sensible judgements? Are our people clear on the boundaries of their empowerment? Centre that has led this research, we create winning We do this through operating model optimisation Solve Do our people have the detailed product and technical knowledge required to solve frequent issues? customer experience strategies. This includes to empower employees to proactively and efficiently Do we recognise our people when they are ‘heroic’ in fixing things for the customer? customer journey redesign across digital and non- serve customers. Do we collect and use feedback to improve things for the customer? digital channels, customer loyalty and mastering CX economics to maximise customer lifetime value. Customer pricing, analytics and insights KPMG’s customer analytics solutions and decision Do we practice next-issue avoidance? Customer profitability engines can help you to understand customer Do our processes enable transparency with the customer? KPMG’s Customer Profitability team can take and quantify customer insights. This includes Close Do our people know the follow-on processes well enough to accurately set customer expectations? Is our close warm, friendly and personal – or a standard “have a nice day?” the traditional P&L of any business and derive leveraging customer experience insights to Do our values resonate into our customer satisfaction programmes? insights into the hidden problems and opportunities. create more economic value through value-based We accomplish this by using our multi-dimensional pricing strategies. profitability tool to identify the most profitable combination of customers, products and channels. Are we testing and trialling new technologies? Particularly Do we review our customer experience data and dependencies often to enable smarter systems? in New Do we have a view as to the customer life problems we can fix? Zealand Are we developing our digital spine – uniting front, middle and back office and enabling customer self-service? Contact us

Simon Hunter Andrew Tubb Partner, Advisory Partner, Performance Consulting T: + 64 27 489 9737 T: + 64 21 615 602 E: [email protected] E: [email protected]

Ian Williamson Tuhi Isaachsen Partner, Performance Consulting Director, Global Strategy Group T: + 64 22 010 7392 T: + 64 21 734 688 E: [email protected] E: [email protected]

Dylan Marsh Baxter McConnell Customer Lead Customer Experience Lead T: + 64 22 627 0872 T: + 64 27 242 2634 E: [email protected] E: [email protected]

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