Bengaluru: Amazon India has trumped home-grown rival Flipkart Ltd in delivering superior customer experience (CX) at a time when the country’s top e-tailers are focusing on retaining their existing user base with enhanced services instead of deep discounts, according Forrester’s CX Index report.
E-commerce companies, however, lag behind personal computers manufacturers, banks, credit card providers, mobile manufacturers, wireless service providers and traditional retailers in delivering superior customer experience. While customer service for online retail as a category improved from “poor” last year to “OK” this year, the segment lags behind counterparts in the US and China, where online retailers are known to offer better customer support, flexible return policies and faster delivery services, apart from rolling out online to offline strategies to improve experience.
However, some of the Indian companies such as online furniture stores Pepperfry and Livspace, eyewear e-tailer Lenskart and lingerie store Zivame have already launched brick-and-mortar stores, while the likes of Urban Ladder, Myntra and Flipkart are likely to set up such stores in the coming months.
Amazon shares the top spot with online grocery store BigBasket, according to the report, while Jabong, which was acquired by Flipkart for $70 million in July, made rapid strides to gain at least 10 points to improve its position.
“Forrester data shows a compelling link between CX and revenue. Higher CX returns are around the corner for brands that walk the CX walk,” said Amit Bhatia, senior analyst at Forrester. “Brands that seize this opportunity to deliver superior CX can hope to differentiate themselves from their competition and look forward to higher revenue growth and market share.”
The likes of Flipkart and Snapdeal are now talking of customer experience instead of gross sales.According to industry experts, the e-commerce companies are striving to retain their existing user base, acquired at a high cost, through services rather than discounts and offers, which end up burning a hole in their pockets, specially amid a slowdown in funding unlike the heydays of 2014 and a better part of 2015.
For instance, Flipkart had set before itself three goals to accomplish by September, one of them being achieving a net promoter score of 55, Mint reported on 9 August.
Net promoter score is a measure that indicates the loyalty of a firm’s customers and the overall quality of its service. The term was coined by Fred Reichheld, a fellow at management consultancy Bain & Co., in an article published in the Harvard Business Review in 2003.
Amazon India launched its global Prime membership programme in more than 100 Indian cities in July, offering one-day and two-day delivery on lakhs of products, as the company seeks to retain more customers and boost sales.
Apart from fast delivery, Prime members will get early access to products in the “Lightning Deals” category every day. They will also get exclusive deals from select brands and sellers.
Flipkart offers its own version of Prime called Flipkart First. However, Flipkart hasn’t seen the kind of customer uptake it expected and Flipkart First isn’t a major contributor to the company’s growth, highlighting the difficulties in operating a programme successfully in a country that has poor infrastructure.
Similarly, Snapdeal in August launched a Prime equivalent called Snapdeal Gold, which offers free shipping and free upgrade to next day delivery, among others.