Customer experience in the new reality Global Customer Experience Excellence research 2020: The COVID-19 special edition home.kpmg/customerfirst 1 Customer experience in the new reality Foreword The impact of COVID-19 on customer behavior was immediate and widespread across all industries, countries and demographics. Expectations have heightened as priorities have shifted to health and safety first, which have in turn changed decision making and buying behavior. As a result, what was previously considered to be a great customer experience has no longer been good enough and almost all businesses have been thrust into reorganizing their approach to customers. Customers are the lifeblood of every organization and the money they spend is the oxygen that enables the business to exist, grow and thrive. There is a commercial cadence — a rhythm — associated with how the customer and organization transact and interact with each other over time. With this cadence comes the opportunity to deliver experiences that in turn establish and sustain enduring relationships and drive value for both sides. This is KPMG’s 3rd Global Customer Experience Excellence report. It brings the need for commercial cadence to the fore. Looking at the research findings in the light of COVID-19, we see that companies that were able to maintain this commercial cadence with their customer were ranked higher than those who did not. Their success emphasizes the application of The Six Pillars of experience excellence: Integrity by acting ethically and demonstrably in their customer’s best interests; a focus on Resolution and proactively addressing customer problems; the accurate setting of Expectations; reducing the Time and Effort customers need to expend by enabling frictionless interactions and then delivering a Personalized experience with Empathy and compassion. © 2020 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Customer experience in the new reality 2 COVID-19 has brought forth a The migration to these digital consumer that is more thoughtful relationships poses something of and selective in their decision a challenge for organizations, even making. Part of this is a result of those with a strong digital presence. customers seeking out businesses As digital usage increases so do that demonstrate and build trust. concerns about personal data and Additionally we are seeing a shift how it is used and protected. towards ‘buying into companies’ rather than simply ‘buying from’ Online experiences in the new reality them. Factors such as brand, need to be immersive, emotive and, purpose and reputation are coming above all, safe. into the decision-making process in The CX leaders in our research equal measure to safety, security, lead from the front to support their convenience and certainty. These are colleagues in these extraordinary all now parts of a new value equation times and build an organization which that customers hold to account within is connected — where every part of the price of a product or service the business is symbiotic and aligned, which has changed the economics of from the front office through to the experience delivery. back office, to deliver an intentional Many purchases have had to shift customer experience. from in-person to online channels, I encourage you to review the creating a more digitally savvy findings of our research in this consumer that demands easy and report to help you to decide how to effortless interactions. adapt your approach to customer Consumers of all ages have experience and align to a new reality. discovered that the internet makes A dynamic economic environment, their daily routines more efficient and a shift in values and newly expected these behaviors are likely to stick. standards of customer and corporate Many organizations had to accelerate, behavior are rapidly changing the augment and promote their original rules of the game. Firms will need to customer interaction investments. know this new customer intimately For the leaders in our research this if they are to succeed in the was a minor adjustment to existing new reality. Julio Hernandez operating models allowing them Head of Global Customer to maintain continued transactions Our global network of KPMG Center of Excellence and commercial cadence with their consultants is here to help you KPMG International customers. Indeed, the shift to digital navigate the challenges ahead. enabled greater value to be created US Customer Advisory Lead by lowering costs to serve. KPMG in the US © 2020 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 3 Customer experience in the new reality Contents The new reality customer 7 The Six Pillars 9 The new reality experience 11 A connected enterprise for the new reality 13 How to succeed in the new reality 16 2020 hall of fame 20 Industry views 25 Airlines 27 Banking 29 Grocery retail 31 Hotels 33 Insurance 35 Logistics 37 Telecoms 39 Market overviews 41 Australia 43 Austria 45 Belgium 47 © 2020 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Customer experience in the new reality 4 Brazil 49 Singapore 73 Czech Republic 51 Slovakia 75 Germany 53 Spain 77 Hong Kong (SAR), China 55 Sweden 79 Ireland 57 Taiwan 81 Italy 59 Thailand 83 Japan 61 United Arab Emirates 85 Luxembourg 63 United Kingdom 87 Mexico 65 United States 89 The Netherlands 67 Vietnam 91 Romania 69 Methodology 93 Russia 71 Thinking ahead 95 © 2020 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 5 Customer experience in the new reality 80% While 88 percent still buy brands as per their needs, 80 percent of people prefer buying from and into the brands whose actions align with their beliefs and values. The quality of customer experiences are improving around the world. All countries researched have seen an uplift in their overall Customer 63% 76% Experience Excellence (CEE) score this year. Value is the differentiator on of customers expect firms product or service choice for they deal with to provide The average increase of all markets 63 percent of consumers as a e-commerce services. together is 3 percent. result of COVID-19. Overall non-grocery retail is the strongest % performing sector for 3% 81 CX in 2020, followed by Brands are perceived to be financial services. of people are concerned providing greater value for about a recession/ money. There has been a 3% economic situation. uplift since 2019. 7 92% of the 19 markets which of customers are expecting featured previously, 7 companies to keep them and other brands retained their customers safe. The logistics sector has seen the number 1 spot. highest increase in performance in 2020 of 6 percent. Source: KPMG International Research, February 2020 — August 2020 © 2020 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Customer experience in the new reality 6 49 percent of consumers are focused on saving rather than spending. Personalization is the strongest pillar in driving 56% 58% customer loyalty in 19 Over half of consumers say the Over half of consumers of the 27 markets, while environmental and social practices are worried about climate Integrity leads across of a company has an impact when change. 6 markets. choosing to buy from them. Integrity is the strongest Financial services driver of Advocacy (NPS) dominates the first place 55 percent of consumers want across 18 of the 27 markets rankings. 12 out of 27 companies to keep their data safe while Personalization leaders are financial as a number one priority. leads across 8 markets. services brands. 11% Average performance has risen across all Six Pillars this year, with expectations seeing the greatest increase globally (+4 percent on average). Customer experience (CEE metric) for the top-ranked brand in each market is an average of 11 percent 90% higher than its respective market average. of customers are willing to pay more for ethical retailers. © 2020 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 7 Customer experience in the new reality The new reality customer Purchasing patterns are also changing as consumers shift from discretionary spend to essentials and it is likely to stay that way as the finances come under pressure and they seek to rebuild their financial safety net. Value and price are becoming equals for customer loyalty Consumers’ spend is impacted by both the decrease in disposable income and the psychological impact of COVID-19. We see new segments arise, separated by a need to group products and services into categories Globally, consumers believe they will be living their lives of necessity, with spend moderated by financial attitudes. very differently for the foreseeable future. They feel more vulnerable, less secure and less in control than ever before. Consumers in Germany, France and Hong Kong (SAR), China feel more They expect the brands they have to interact with — digitally calm and secure, fitting into the or, as lockdown eases, physically — to deliver better, safer, financially comfortable category. and more seamless interactions at a lower cost. In Brazil, Japan, Italy and Spain, consumers have stopped all non- essential purchases and are more They are financially constrained, As a consequence, we see some selective, feeling more financially want touchless experiences and are new and different behaviors because overwhelmed and giving their more thoughtful and selective in their of the way that we have had to financial recovery priority.