3 Ways Retailers Can Leverage Organization-Wide Data to Deliver Great Customer Experiences
2022: The year retailers hit the ‘reset’ button
The prophets of retail have been bearish for some time about the future of the industry. The harsh reality of a global pandemic led to multiple follow-on effects: empty shelves, fed up employees leaving in droves, and a shellshocked economy with an uncertain future.
When much of the world finally began opening back up in 2021, the rules had fundamentally changed. Surviving retailers realized the need to reimagine their business models, technology footprints, and customer engagement and retention strategies just to stay relevant, let alone thrive. This began as a reaction against potential catastrophe, but the sea change it inspired may be the catalyst for a new age. One where constant change in the market isn’t a bug, but a feature – for brands prepared to meet the challenge.
The 2022 holiday shopping season was an unmitigated… success?
It’s true. Expectations for a depressed turnout for holiday shoppers in 2022 have largely been turned on their head – beginning with the traditional one-two punch of Black Friday and Cyber Monday. A record 196.7 million consumers shopped over the Thanksgiving holiday period according to the National Retail Foundation (NRF), shattering its initial expectations by more than 30 million, and marking the highest figure since the foundation began tracking this data in 2017. Retailers using the SAP Commerce Cloud e-commerce platform alone saw more than $8 billion in gross merchandise value (GMV) during Cyber Week and a total of $31.9 in GMV over the entire holiday shopping period. Not incidentally, the platform handled this volume at 100% uptime throughout the entire season.
Good news, to be sure, but far from a ‘rising tide raises all boats’ scenario. In the end, it was the retailers that were best able to meet consumers’ needs and desire for convenience, flexibility, and value that faired best. The difference often came down to brands’ data strategy and ability to deliver a truly consistent, connected, and personalized buying journey to each customer – something many retailers still struggle with.
The fact is, consumers don’t see channels, they only see value.
So, you must get digital right to succeed, but not at the expense of offering a well-rounded overall experience to customers throughout their journey with your brand – from first impression to last action. We’ve found that being “data-driven” isn’t just about being able to collect and manage information, it’s about how to use data to form a complete and actionable picture of both the customer and the business. It’s also about fostering a customer-first culture, where value can truly be co-created between brand and audience. In other words: What’s good for the customer is good for the business, and vice versa.
What does it take to strike this balance? Let’s look at three ways today’s retailers can tap into data spanning the enterprise (and the customer journey) to attract, delight, and keep customers coming back for more, while building a resilient bridge to a sustainable and profitable future.
Unify the online and in-store experience to smooth and enrich customers’ journeys
On one hand, consumer behavior – influenced largely by technology – has shifted radically in recent years. Now, when asked which channel they prefer for discovering, buying, or seeking help, the typical consumer will answer with some variation of “all of them.” On the other hand, retailers are scrambling to transform their businesses to address this new reality and working to scale and prioritize their technology investments for maximum long- and short-term impact.
For many, a hybrid approach is emerging as the most effective way to move forward.
Read More: AI and Big Data Expo is returning to California
For example, one fast-growing area of investment is around efforts to digitize and “omni-channelize” stores. This might include addressing customer and employee experience in the form of technologies that merge digital with physical: think RFID tags and electronic shelf labels (ESLs), computer vision, sensors, and AI. This tech can help retailers better understand how consumers interact with products, optimize products for self-checkout, and improve inventory accuracy while mitigating loss. On the opposite end of the coin, digitization of the physical store opens the possibility of enabling new digital experiences: metaverse storefronts and NFT-based virtual merchandise, live video chats with employees; previewing or shopping through augmented or virtual reality devices; even consumers live streaming their shopping to socialize the experience.
On the back end, having more refined visibility and control of the store environment can help drive more value in retailers’ partner relationships, whether that’s core consumer goods brands, warehouse, fulfillment, and logistics teams, payment providers, and so on. Whatever a brand’s current stage of transformation, this hybrid strategy revolves around a holistic data strategy, and having the ability to identify and surface the information needed to serve most effectively in each moment.
Personalize – the right way – to increase profitability and long-term customer loyalty
Thanks to hyperscale e-commerce pioneers, (Alexa, we’re out of toothpaste!) most of us are not only accustomed to the idea of personalization when we shop online, we outright demand it. Recent surveys have shown that as much as 80% of consumers are more likely to do business with retailers who offer personalized experiences. But anything that becomes this ubiquitous also comes with risks. Customers may take personalization for granted, but they will take their business elsewhere if a retailer gets it wrong.
There’s also the legal angle to consider. Thanks to a raft of new consumer data protection regulations, the days of “lookalike” targeting, persona-based advertising, and cookie-driven campaigns that follow consumers across the Web are coming to an end. To effectively personalize marketing communications, product recommendations, promotions, and so on, brands need to effectively open a dialogue with their customers – at scale.
But how can this be achieved?
Again, it comes down to data literacy. First, a customer profile should be built on trust, with a foundation of permission-based, earned first-party data, and available as part of a common data model across the business. With this in place, brands can begin building a rich and detailed history of each individual customer to inform everything from e-mail and SMS messaging, to AI-driven product recommendations, to retail associates’ and service reps’ understanding of customers and ability to quickly resolve issues – all leading to better top- and bottom-line outcomes. Simple examples might include offering someone who regularly buys staple products a discount for joining a subscription service, or inviting someone that prefers a particular consumer brand to join its loyalty program.
Latest in CX Management: Zendesk’s Customer Experience (CX) Trends Report Reveals AI’s Role in Reshaping…
Personalization can and should look different for each retailer’s particular brand, assortment, and audience, but the keys to success are:
- Maintaining a two-way dialogue with customers
- Building and acting on customers’ profiles in a trustworthy and transparent way
- Securely integrating customers’ data across the enterprise to inform and enhance their entire lifecycle
Mitigate operational woes that eat into your margins
Some current macroeconomic realities can’t be avoided: chaos created by a pandemic deflating the global economy and upending demand cycles, wartime effects on oil and commodities prices, disruption across manufacturing and logistics adding to growing inflation – the retail industry has taken the brunt of it all. Combine that with unpredictable consumer behaviors, including their propensity to return more than 15% of the goods they buy online, there’s no doubt it’s more complex than ever to run a profitable business.
This is exactly why the name of the game today is resilience, and that begins and ends with business agility. By connecting data across the entire organization, retailers can give every business and IT stakeholder better visibility into production, inventory, order management, and logistics. The benefits of this approach are many:
- More accurate demand forecasting
- Balancing purchasing, ordering, and storage at the national, regional, and local level
- Optimizing storage costs
- Avoiding stockouts
- Offloading dead stock
- Streamlining order management
Bringing it all back to the customer, when shelves are well stocked, and orders are fulfilled in a timely and consistent manner, trust and loyalty follow. Once again: What’s good for the customer is good for the business, and vice versa.
Recommended:
Comments are closed.