Hello, fellow members. The first half of 2020 has already past as we enter the second half of this year. Much like how we had to make an effort to adjust to the changes in our daily lives brought on by the COVID-19 pandemic, the retail industry, which was directly hit by the unpredicted pandemic, has also been making strenuous effort to overcome the chaos for the past several months.

The direction of change in the retail industry during the first half of 2020, centered around 'sustainable growth of online retail' and 'shifting towards omni-channel for offline retail', has not changed. However, what made retailers panic was the speed of that change. The industry experienced this change, which was expected to happen over the course of at least several years, in only a few months. Like that one wise man said 'Only when the tide goes out do you discover who's been swimming naked', we witnessed a huge tide of chaos in the retail industry of the fall of the existing retail giants, who were not prepared for the near future, and the emergence of new winners.

Of course, the struggles of the conventional retailers are not new. Online retailers have slowly eaten away at the pie once dominated by offline dinosaurs. And the COVID-19 pandemic accelerated the fall of the traditional retail dinosaurs. There are, however, some companies that are entering an era of new growth without sweat in such times of loss and despair.
Then, what was it that changed the fate of the companies? I found a clue from somewhere close.

Amorepacific's three management policies – innovative product, customer experience, and digital.

The words might be different, but all companies across the world pursue the same goal. They strive to be the final winner by developing innovative products, offering incomparable high-quality customer experience, and by being further consumer-friendly through digitalization.

Among the three keywords Amorepacific is striving to achieve, I'd like to discuss the one right in the middle, 'customer experience'. But before we begin, let me ask you a question.

Customer experience is a compound noun combining the two very familiar words to us, customer and experience. It's difficult for anyone to answer this question right away, although there is definitely something that comes to mind. I researched a lot of material to make that idea in my head clearer. The first thing I looked up was the dictionary definition of customer and experience.

According to the above definitions, customer experience can be defined as the experience encountered by the one who visits a store to make a purchase. This literally is the definition of customer experience one encounters at a traditional offline store. And based on this definition, we are making efforts to provide the best customer experience to customers who visit our stores by managing the elements that customers experience in a store (service provided by employees, product testing, space experience, etc.).

But do stores only exist offline? There are online stores where customers can buy products whenever they wish.

From the perspective of the offline stores, which were there since the days we had no internet or cell phones, online stores are the villains that keep taking what's theirs. (It is also true that online stores target the sales of offline stores like prey.) The reason is because the following premises of retail do not change.

1. Customers have limited budget, and
2. Offline and online stores sell the same products.

Unless the two premises change, if a customer makes a purchase through a certain channel (e.g. online), we cannot expect that same amount of sales from the other channel (e.g. offline). So, it is understandable that the two channels consider the other hostile. However, what about the perspective of the customer? Does the customer care about the competition between the two channels?

The customer will choose online today as long as there's a price benefit to the choice and then choose offline tomorrow to seek counselling from a store employee to find a solution to his or her skin problems. We may consider this caprice, but in the customer's perspective, he or she made a rational and economical choice depending on the situation for his/her customer experience. Thinking of the offline and online relationship as somewhat hostile is only our perspective. The customer will go wherever to receive good customer experience regardless of what channel that is.

When you think about it, at the online store there is no staff to help me, no products to test, and no physical space like the offline store. Because of these clear differences, it is easy to think that the two channels are completely opposite, and that the customer experience of an online store is completely different from that of an offline store. However, the dictionary definition of the experience encountered by the one who visits a store to make a purchase still stands valid with online stores.

The only difference is -
Product information provided by an employee at an offline store has been replaced with a well-written product information;
Answers provided to customers' questions have been replaced with Q&A boards, consultations over the phone and chat bots;
Product testing has been replaced with numerous reviews by other customers; and
The experience of the space of the store has been replaced with UX and UI (User Experience and User Interface) design.

The basic needs of a customer who wishes to find answers to questions about products, who wants to confirm the quality of the product, and who desires to enjoy shopping with an efficient flow of purchase in an aesthetically pleasing environment are the same regardless of the channel. Therefore, the customer experience of the online stores does not deviate too much from the dictionary definition of the experience encountered by the one who visits a store to make a purchase.

I explained how the fundamental needs in customer experience is the same in that customers seek satisfaction regardless of the format they shop in. Then, what about outside the store? Is there no relevance to customer experience outside the store?

Customers, even at this very moment, are experiencing brands and products outside the store. The Shopping & Service Experience during the purchasing journey I mentioned above at offline and online stores as well as the Consumption Experience that occurs in the process of consuming the product after making a purchase is also part of the overall customer experience. Today's customers want a satisfying happy experience related to every aspect of their chosen brand and product, expanding to even their experience that comes after the consumption or to the realm of the social reputation of the brand. Therefore, there is a need to expand our definition of customer experience from the traditional customer experience expected at a store to beyond that scope of a store.

There is already a definition offered by an expert on how we can understand this expanded version of customer experience. And that is the expanded definition suggested by Professor Bernd H. Schmitt, who first proposed the concept of Customer Experience Management.

According to the above definition, we can see how not only the experience at the store but also the entire process from when the customer becomes aware of the brand and product to when he or she assesses the product after use is considered part of the realm of expanded customer experience.

In my first column, we discussed the dictionary definition of customer experience and the aspect of customer experience that is expanding as customers change. One thought that comes to mind as I conclude this column is that this definition is simply forming the ideas and thoughts around customer experience into words. I was hoping that you already were thinking the same as I have about customer experience. What do you think, having scrolled down to here?

At the end of our goal of making a good product, promoting that product well and waiting for our customers to choose our product, there is always the customer, even customers who demand that all related experiences be satisfying. Maybe, the premise that 'in the end, there is customer' is something that we are just so used to that we overlooked it.

I hope that this column helped you understand customer experience, a concept that we were simply too used to that made it difficult to explain, a little bit easier yet made you think again about customer experience and its importance. My next column will dive deeper into the elements that exist in the expanded definition of customer experience.