Creating a Better Customer Journey Using Artificial Intelligence (AI) with Michael Scharff
May 26, 2021
How can we better connect with our audience and make their lives easier? The transition to multi-channel buying options has accelerated five to ten years the past twelve months and presented an opportunity to enhance the customer journey. In the new episode of The 19: Retail, Evolv Technologies CEO Michael Scharff explains how artificial intelligence (AI) can help brands understand customers’ pain pain points and develop strategies to meet customers where they are in the buying cycle.
Rochelle Reiter: [00:00:06] This is The 19. In 19 minutes or less game changing insights from Orange Label, the leading response marketing agency for established retail brands that are driven by a fearless entrepreneurial mindset.
Rochelle Reiter: [00:00:24] Hello and welcome to The 19: Retail! I’m Rochelle Reiter, President of Orange Label. Today, we’re going to be talking about the buyer’s journey. Whether you’re in B2B or B2C, this topic is likely part of your day to day. It sure is for Michael Scharff, CEO of Evolv Technologies. Evolv is a company that solves growth challenges and businesses by utilizing artificial intelligence, or A.I., to create better customer experiences. With over two decades of digital commerce and retail expertise, Michael has built and managed highly successful omnichannel and e-commerce businesses across the globe. Michael, welcome to The 19. It’s great to have you here today!
Michael Scharff: [00:01:02] Thank you. I’m happy to be here.
Rochelle Reiter: [00:01:08] Well, tell me a little about your background in retail?
Michael Scharff: [00:01:11] Well, I got my start selling stereos out of my first apartment in college, so I’ve been in retail pretty much my entire life. I actually left when I left college. I decided to go into retail and started in consumer electronics out on the West Coast and then ultimately ended up working for several large national brands like Best Buy and Toys R US and Sears (Canada) and Staples and I had a great career in retail. I spent the first part of my career as a merchant now working my way up through the buying organization. And then in 1999, when I joined Best Buy, pivoted over to the digital side of the business and have really been steeped in e-commerce and digital ever since, and have really learned a lot along the way and learned to love retail really just as a practice kind of end to end. So it’s been fantastic. And for the last several years prior to joining Evolv, I was serving as an advisor to a bunch of technology companies, primarily servicing retailers, and then launched Evolv two years ago to help continue that journey.
Rochelle Reiter: [00:02:11] That’s awesome. So you’ve seen it in the brick and mortar state and the e-commerce state?
Michael Scharff: [00:02:16] Yes, very early on, long before e-commerce was a twinkle in anybody’s eye and all way up to today where it’s driving everything we do as consumers.
Rochelle Reiter: [00:02:25] That’s fantastic. It’s great to have you here today. So what are the biggest shifts you’ve seen in the retail industry over the past year?
Michael Scharff: [00:02:33] Well, obviously, the last year, I think, had some external factors that have significantly influenced retail. Obviously, Covid really caused a sea change in terms of how brands were thinking about engaging with consumers, primarily based on me. The trends, though, are trends that have been going on for a long time. There’s been an ongoing shift from brick and mortar to multichannel, omnichannel, seamless channel, whatever you want to call it. But really to using a whole variety of channels for consumers to engage. And I think what happened is Covid really accelerated that transition probably 5, maybe as much as 10 years for almost every industry. And it also helped industries that were really laggards in digital commerce, think grocery stores, financial institutions, really gets forced into digital as a primary engagement means and really have to step up their game. I think in terms of the biggest single impact, it was really around supply chain and logistics. The biggest challenge was how can you get products to consumers when they couldn’t come to your stores, even if 95% of your retail transactions still took place in stores. So we saw dramatic accelerations. Not only are things like, you know, same day delivery, next day delivery, but curbside pickup and, you know, click and collect and lockers. So companies got really innovative around finding ways to get products to consumers as quickly and safely as possible, which I think is going to yield a lot of long term benefit on both sides of the equation.
Rochelle Reiter: [00:04:00] Sure, sure. So how has e-commerce changed, in your opinion?
Michael Scharff: [00:04:04] Yeah, well, e-commerce, you know, because of the advent of multichannel years ago, it really became a multimode method of engagement. So not only did it become a primary source for information, but also shopping across different channels. So today, virtually every transaction has some level of digital engagement associated with it, whether it’s a high ticket purchase and somebody really wants to do in person, they’re going to do all the research online. They might be doing buy online pickup in store. People are going from desktop to mobile to tablet to in-store kiosks. So there’s really been an evolution in e-commerce to become part of the transaction process or the journey for every single customer engagement with the brand these days. And it’s really important to understand that the metrics you need to look at really span all of those different types of touch points. It’s not just about what you sell on your website, but it’s about how you engage customers. How do you drive them to stores, how do you find repeat business? How do you show them new items? So there’s a whole host of things that e-commerce has become central to around that digital experience.
Rochelle Reiter: [00:05:12] Sure. So what opportunities do you see that become available to brands because of that evolution?
Michael Scharff: [00:05:20] Well, probably the biggest opportunity is also the biggest challenge is how do you as a brand, become fluent in engaging with customers in multiple touch points? And if you think about the legacy retail brands, they really built up their core competencies around the in-store experience. And how do you create a great physical environment or how do you service customers with really rapid logistics or low prices? So now all brands need to be experts at digital from a user experience standpoint and understanding that seamless integration of digital into their broader channels. Clearly, if it’s a digital first company, they have some advantages in the digital space. But where do they then have challenges is how do they figure out what the opportunity is for building physical infrastructure to meet those customers where they want to be? And we’re starting to see a lot more digital brands move into the physical space like Amazon and Warby Parker and others who’ve realized that there is a role for both channels, both the physical channel and the digital channel in that customer journey. So the key is to really understand the power of each channel and how it can enhance your overall customer experience and customer engagement and leverage the channels together to create that best possible experience.
Rochelle Reiter: [00:06:30] Sure. So now you’re having to maximize both physical..
Michael Scharff: [00:06:34] It’s a lot of work!
Rochelle Reiter: [00:06:35] …and digital. Right. So Evolv is specifically around A.I. Can you share how brands can use A.I. to better serve its customers?
Michael Scharff: [00:06:48] Yeah, absolutely. So when you think about the complexity of the experiences that brands are faced with trying to create for customers today, there are almost limitless number of ways a customer can interact with a brand. If you think about a typical customer journey on a website. There are dozens of pages with literally thousands of different elements across those pages. And you’ve got all of your customer history, you’ve got your interactions across channel and there’s an enormous amount of complexity in trying to understand how to create the right customer experience for that customer at that point in time, because customers are always changing what their goals are. So leveraging A.I. allows brands to use the power of machine learning and artificial intelligence and big data to really understand how to best serve each customer at a given point in time based upon their customers objectives in real time. And that’s really something that can’t be done without the power of A.I. It’s really impossible to look through all of that data and quickly and efficiently make decisions and then serve up different experiences in your digital channels to to help optimize the customer’s journey.
Rochelle Reiter: [00:07:56] How does a better experience translate to value for consumers?
Michael Scharff: [00:08:00] Yeah, that one actually is pretty easy. So for most customers, you know, when you’re faced with a really complex set of user journeys on a website, what you’re looking for is you want to get to your experience, the thing you’re trying to accomplish, whether it’s make a purchase or sign up for a credit card or check the balance on the payment you want to do, it is easy and intuitively as possible. And using A.I. we can help understand what the customer’s objectives are within a journey and try to serve up the right experience and help them get to their goals as soon as possible. So really, the whole goal is to try to create the best possible experience for the consumer to meet their goals with that digital engagement. And that’s not something you can’t do with a standard generic website that’s designed to serve all customers at all times for all purposes. So really, it’s about trying to meet the customer where they are and help them get to their objective as fast as possible and really friendly.
Rochelle Reiter: [00:08:57] Do you have an example of a brand that has transformed the way they do business through A.I.?
Michael Scharff: [00:09:01] Yeah, absolutely. I can’t share specific names, but you know, we have one client who’s a major telecommunications company and their customers were really struggling with the checkout process on their website. So we went in with them. We did a bunch of experimentation around what types of things were being shown through that journey. And what we found was we were able to compress the number of pages in the checkout funnel from seven to two. And then we also found there were a number of extraneous items on the experience itself on that final page that were distracting customers and confusing them when they were trying to figure out what was that they needed to do just to complete a transaction. So by suppressing or hiding or moving some of those elements around, we’re able to make a much cleaner experience so they could actually get through their transaction faster. So it yielded an easier journey for the consumer, made it much easier for them to figure out what they wanted to do and a higher conversion rate, which benefited the brand because they were able to see more customers transacting on their website.
Rochelle Reiter: [00:09:59] That’s amazing. So what are the KPIs that you look at for that, for example? So time on site, increased conversion?
Michael Scharff: [00:10:06] Yeah, it really depends on what the objective is. So we work with brands across a whole bunch of different industries and a whole bunch of different goals. You know, for most traditional retailers, obviously, the primary objective is going to be creating a optimal experience to a transaction, but we work with companies in financial services who might be looking to improve the speed at which somebody can apply for a credit card or an affiliate site where you’ve got somebody shopping for cars and they want to click through offered information site to a dealer site, or it could be a manufacturer who’s looking to drive traffic to their retail end points. So really, the KPI for each optimization is based on what the goal is of the user journey that we’re working on our whole system anchors around whatever that KPI is that the brand wants to focus on. We can help improve that KPI.
Rochelle Reiter: [00:10:51] Awesome. Awesome. And how do you suggest brands maximize their impact through I.A.? What’s the process work with you?
Michael Scharff: [00:11:01] Yeah. So for us, you know, one of the fundamental components is really thinking very differently about optimization and experimentation. Traditionally it’s been a very linear, slow process where you test individual ideas one at a time or maybe a couple of at a time. And for us, you know, we like to think about optimization and what we call a scale. So how do you take huge numbers of ideas from across your organization that you think might improve the customer journey and then try to create a system in a set of optimizations to test multiple ideas concurrently and not only looking for the best ideas out of that large pool, but also understand how the combinations of different changes affect the user journey. It’s not just each change in isolation, but it’s the overall experience that really impacts how the customer perceives down that journey. So working with us, you know, we try to develop strategies around user journeys, not just individual pages or elements, and then create large numbers of ideas so we could start to optimize continuously so we can continuously change the ideas we’re testing and continually learn from the things that we’ve tried before and add new ideas and to continue to improve those experiences.
Rochelle Reiter: [00:12:07] Sure. Now, are your client engagements typically a year or are they longer term or is it project based? How does that work?
Michael Scharff: [00:12:15] Yeah, so most of the clients we work with, we’ve been working with for for several years. We’re up, we’re a relatively young company, but we have clients that have been with us or our predecessor company for three or four years now. And really it’s around finding opportunities to continue to improve the user journey. It’s not a static project type of approach because the user journey and the competitive landscape and the nature of retail is ever changing. So you’re always responding to seasonality, competitive pressures, new products, new capabilities. So optimization is not a one and done. It’s really a way of thinking about how do you create great experiences every day and knowing that you’ll never going to get to the endpoint because the world’s always changing around us.
Rochelle Reiter: [00:12:58] Right. Right. So how often do you check in or do you do the optimizations? Do you provide a monthly report or?
Michael Scharff: [00:13:05] Yeah, sure. It depends on the scale of the client. So we have some clients where we’re running multiple optimizations concurrently across different parts of their user journey. But with everybody that we’re working with, we try to run optimizations that allow us to yield significant outcomes within 30 days. And we report on each of our programs with each of our clients every week. So it’s really a hands on, you know, we’re very much involved in helping drive the business outcomes and deliver real time value to our clients. And then, you know, we can run as many optimizations on the site as there’s traffic and time and, you know, the intellectual horsepower to develop all the ideas for collectively between ourselves and our client teams.
Rochelle Reiter: [00:13:43] Awesome. Do you have an example of a brand that has transformed the way that they do business through A.I.?
Michael Scharff: [00:13:49] We have clients who have really shifted how they think about testing pretty dramatically from, as I mentioned earlier, this kind of linear stop start project oriented mode to really continuously thinking about how to change your user journey on a daily or weekly basis. So there’s a lot of examples, and that’s really at the heart of what we try to help our clients achieve, which is that mindset change in the strategic change around optimization as something that you have to live and breathe every day, whether we’re doing the work of the clients doing it or we’re doing it together or with the service provider. But I think more broadly, if you look at the impact that A.I. is having, it is really touching all parts of retail and commerce today, whether it’s supply chain management, labor modeling in stores to store design and layout. It is a technology that’s going to impact every aspect of business across virtually every industry over the coming decades. And we’re really excited to be working on it now at the forefront of the user experience side.
Rochelle Reiter: [00:14:45] What advice would you give brands looking to enhance their digital shopping experience?
Michael Scharff: [00:14:51] Yeah, we’ll certainly call Evolv, but I’d say first and foremost, really understand the the strategies that are going to help you think about the user journey, understand the complexity that exists in those user journeys, and start to think about all of the touch points that you have and what are the pain points that customers are experiencing today. So there’s a lot of data, most brands have platforms or their customer feedback to help identify pain points. And when you get started trying to improve your user experience, really look for those easy, low hanging fruit opportunities to create winning experiences quickly and then gather more data. And as you learn more about the customer journey and where those pain points are, you’ve got a lot more data to look at to help solve those challenges and create better experiences ongoing. So, you know, it’s always start with something simple. Develop some confidence in your own perspectives and then the technologies and then continue to scale and grow and see what works.
Rochelle Reiter: [00:15:48] I love the low hanging fruit. Get the low hanging fruit first. Mark it off the list!
Michael Scharff: [00:15:53] It’s kind of amazing to me. You know, we’re 20 plus years into this e-commerce journey and there’s still so much opportunity to improve user journeys and user experiences. And not a day goes by where I am on a website where I don’t think of a dozen different things that could be changed to improve the experience. So it is definitely a lot of work to be had as an industry.
Rochelle Reiter: [00:16:13] After a year that forced many companies to reevaluate and evolve the customer experience. We’re so grateful for these tips that you shared with us today. Michael, thank you for joining us on The 19!
Michael Scharff: [00:16:23] Thank you very much. I really enjoyed the conversation.
Rochelle Reiter: [00:16:30] Thank you for listening to The 19 retail edition with Michael Scharff to learn more about Evolv Technologies, check out our show notes or visit evolv.ai. That’s E-V-O-L-V dot A-I. If you have additional thoughts on this topic, send us an email. You can send questions, comments and more to info@orangelabelmarketing.com.
Rochelle Reiter: [00:17:00] A special thank you goes out to our contributors, Studio Manager Kelsey Phillips, Micah Panzich, who edits our show, and Ashley Ruiz, Content Writer. Be sure to subscribe to The 19 on iTunes and Google Play and if you like what you heard today, leave us a review!