Minimising the impact of disruption
A number of SA industries have been affected by disruption. Customer experience expert Julia Ahlfeldt believes each industry could minimise the impact of it by paying attention to customer experience.
She points out that the travel industry has been particularly hard hit by online flight comparison platforms that allow travellers to find and book the cheapest ticket themselves, as well as Airbnb – which has unlocked a whole new world of accommodation options – and Uber.
The big take-out: The travel, financial services, property, media and retail industries have all been disrupted by technology. A closer focus on customer experience could lessen the impact of this disruption, says customer experience expert Julia Ahlfeldt.
What’s left for traditional travel agents to do? “If all a customer is looking for is the cheapest flight, travel agents probably won’t be able to compete,” says Ahlfeldt. “But the travel market is bigger than the issue of bargain-hunters. What people want most of all is a happy, memorable experience that delivers on their expectations, and there isn’t a one-size-fits-all solution for this.”
She believes first-time travellers will still need guidance and reassurance, baby boomers won’t mind paying a small premium for an experience that has been specially curated and customised for their needs, and families will continue to take comfort in purchasing a package deal that has been designed to entertain the children and allow some downtime for parents.
“It’s definitely possible to do it yourself with today’s technologies, but customers still want – and need – a variety of options,” says Ahlfeldt. “Travel agents will remain competitive only if they focus on the areas where they have the edge over technology, and that’s in personal, face-to-face service, expert knowledge, and customisation to individual needs,” she says.
In the financial services industry high fees and a lack of transparency do not work in the age of the customer, believes Ahlfeldt.
“SA’s big banks are feeling threatened by the growth of disruptive fintech solutions, and what’s interesting is that they are all approaching [the challenge] in a different way,” says Roger Norton, CEO of start-up studio PlayLogix and author of Start Here: A Quick Guide to Building Startups.
The various approaches include sponsoring external incubators and co-working spaces in order to find startup acquisitions, fostering internal innovation through hosting hackathons and competitions for staff, and focusing on customer feedback-led improvements. “In short, all are scrambling to get more innovative products and services out to their customers, and while leaders are emerging, there isn’t a definitive [solution] yet,” says Norton.
Property is another sector that is being disrupted. “When it comes to SA real estate, one has to question the value and role estate agents will play in future, as technology takes centre stage in the industry,” says Jacques Oberholzer, founder and user experience director of digital agency Now Boarding.
Over 90% of property buyers look for properties online, and the platform property24.com seems to have the SA market covered to a large extent, says Oberholzer. Platforms such as propertyfox.co.za allow sellers to sell their property online for only 1.5% commission, compared with traditional estate agents, who typically charge between 4% and 7%. As the entire buying and selling process becomes more digitised, both buyers and sellers are starting to question why they need to pay such high fees.
“Most of the selling process can be done via an app, from booking viewings to getting legal assistance,” says Oberholzer. “Even picking the right selling price should be considered more of a data-based decision than one that relies on years of industry experience.”
Print media has been similarly disrupted. The survivors, says Ahlfeldt, are publications that embrace a multichannel approach, with websites, apps, videos, podcasts, social media and events in addition to their print offerings.
“Computer software is now writing news and media stories,” says Ahlfeldt. “At the moment, this is primarily local news and sports results, but as artificial intelligence develops this will only increase. Fake news will become a much bigger issue than it is now, as new video and audio technology makes it possible to create authentic-looking news footage.”
She maintains that the future for media houses will be centered on trust and building relationships with readers and viewers, as people become less certain where to turn to for “truth”.
Ahlfeldt believes TV is feeling similar pressure, as uninterrupted on-demand services gain ground. “Nielsen reports that globally 31% of Generation Z and millennial respondents pay an online service provider for content – and around 40% of millennials who subscribe to cable or satellite TV plan to cancel their subscriptions in favour of an online-only option.”
Retail is another sector that is under threat of being disrupted. Ahlfeldt points out that while online shopping now accounts for only 1% of retail in SA, growth in this sector is exponential. “Traditional retailers have been slow to transform and are saddled with legacy IT and siloed structures, while our best local online stores, such as takealot, were built for online customers’ needs from the outset,” she says.
Traditional retailers, she points out, will need to find ways to set themselves apart from e-tailers if they can’t compete on price and convenience. “The big advantage they have is the space to interact with customers. It’s much easier to develop rapport with a customer, demonstrate product features and provide advice in this setting. Accordingly, an efficient and genuinely enjoyable in-store experience is more likely to build loyalty than clicking online does.”
However, many retail stores don’t understand this and have employees that are unfriendly, unhelpful or unable to answer customers’ questions. This, believes Ahlfeldt, will gradually drive shoppers online.
“CEOs need to recognise customers as the determiners of their business’s success or failure,” says Ahlfeldt. “In retail, every staff member’s incentives should be tied to customer satisfaction results, from the CEO to the cleaning staff. For financial incentives, the proportion of the bonus in question should increase according to seniority, with the CEO bearing ultimate responsibility.” This is already common practice in the US, she says, where both shareholders and CEOs have recognised the business value of positive customer experience.
A US$500,000 portion of the annual bonus of United Airlines CEO Oscar Munoz, for example, is linked to customer satisfaction surveys. This might now be affected by the experience of a doctor who was forcible removed from an overbooked flight earlier this year, an event that resulted in a public outcry.