How to compete on Customer Experience in an Amazonian Digital World


Share on LinkedIn

Sports Authority | Going out of Business
Few weeks ago, I saw my local Sports Authority store go out of business. It got me thinking about why some retailers are growing while the rest are pushed out of existence by online-only retailers.

More data came along recently, as leading retailers shared their financial results, offering insights into their competitive advantages or lack thereof, especially in the context of the digital world we inhabit.

Sure, growth of the value shopper market segment is helping TJ Maxx and others serving the segment; home improvement sales hasn’t gone online (to Amazon) as much as it has for other retail segments yet, helping Home Depot.

But, what can we truly learn from TJ Maxx and Home Depot? At the very core of each of these financial success stories, is a customer experience strategy that helps these firms disrupt the disruptors. How do they pull it off?

The digital disruptors in any industry, not just retail, make a living — a killing, I guess, would be a more appropriate expression — by targeting points of friction in the customer journey to offer greater convenience (saving time) and value (saving money). This simple yet significant premise explains why online sales and profitability numbers only get better.

Clearly, the traditional players are not sitting still. They’re investing heavily in offering omnichannel customer experiences that reduce friction and offer the same convenience and value the digital competitors are targeting. However, these strategies, while essential, will not help them build sustainable competitive advantage, if there is such a thing.

TJX and Home Depot are showing us that you can deliver differentiated customer experiences that can amount to competitive advantage that will stay, for quite some time, beyond the reach of your digital competitors:

  • Deliver experiences that get your customers hooked
  • Leverage your human capital to disrupt your disruptors

I have to admit, I’m not crazy about shopping at TJ Maxx. I get it — they offer great deals and they have new stuff all the time, but my gripe is that I don’t have the time to explore the store, ransack the aisles and find “my” deal. Turns out, the friction in their shopping experience makes it all the more gratifying. The expectation of variable reward, of finding new stuff every week drives repeat visits.

Nir Eyal, in his best-selling book, talks about how to build habit-forming products. Although many of his examples come from the digital space, as a customer operations and strategy leader you can easily apply the Hook Model to your business, channel and touchpoint, digital or not, as we can see from the TJ Maxx example. Questions that come to mind as I think about how customers get hooked to TJ Maxx:

  • Do you know what your customers itch for?
  • What habits are you helping them form?

Home Depot has been doubling down on selling “solutions” to do-it-yourself and do-it-for-me customers, rather than selling themselves short by focusing solely on “products”. Regardless of which channel you choose, you’re likely to find an orange apron, an expert associate, who can help you with your trick question or dream project — something an online-only retailer will find very hard to match. Sure, Home Depot can bring digital experiences right into these physical channels to catapult forward and further differentiate the store experience from online-only retailers. However, what’s truly differentiating here is not the tech, but Home Depot’s customer intimacy value discipline and the steady and tactful execution to sell solutions instead of products.

But, what if you’re selling products that don’t typically require high-consideration purchase decisions or highly consultative staff?

  • Are you maximizing the value your people can create for your customers?
  • In the race to digitize and cut costs, are you overlooking the power of your human capital? For, it’s one thing you have that your digital disruptors don’t.

Well, as they say in Mad Men, if you don’t like what’s being said, you can always change the conversation. Chime in with your thoughts on how you are competing in the world of your digital disruptors. How are you changing the conversation?

Kumaran Shanmuhan
I'm the Chief Growth Officer at Jacada, where I'm responsible for marketing and solutions. Passionate about the customer service experience and the role of automation in making it effortless and delightful for customers. Encourage you to ping me if you'd like to connect / chat about customer experience, contact centers, digital transformation, robotic process automation, enterprise software, parenting, theater, books or movies.


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here