Consumers are aware of all the information retailers are collecting about them and expect to receive a seamless experience that reflects their behaviour at any given moment of time. Tiffany Carpenter, Head of Customer Intelligence, SAS UK & Ireland, looks at where retailers are on this journey.
Our high streets are changing. Today’s hyper-connected, hyper-competitive retail marketplace requires one key ingredient – ‘hyper-personalisation’. This means going beyond using demographics to divide customers into target groups. To deliver unique and individualised targeting, retailers need to use each customer’s behaviour to inform interactions, predict future decisions and engagement. In addition, they often need to be able to do this “in the moment” or in real-time.
Our research confirmed that UK businesses understand the opportunity here. Overall, more than half (60 per cent) of retailers said that improved real-time customer engagement could see revenues increase by 10 per cent or more. That said, many are still failing to use even basic data to drive a sense of familiarity with their customers. So, what is stopping them?
Retailers currently collect more information on customers than any other industry. Recognising the value of personal information, retailers are collecting information on personal contact details, previous purchases and what they have expressed online to like or dislike. Yet only a third manage to capitalise on this data.
Even basic data, such as the weather, is only being exploited by 36 per cent of retailers. Organisations are overlooking the opportunities that changes in the seasons provide. Yet, when used in the right way weather can be an influential tool for improving customer engagement and driving demand for seasonal merchandise.
Take Topshop’s summer 2017 campaign. To coincide with the arrival of warmer weather, the retailer transformed its flagship store into a giant looping waterslide and invited customers to race down in an immersive 360 VR style. It distributed the scent of sunscreen throughout the store and introduced summer-themed pop-ups, such as soft-serve ice cream. A prime example of the retailer understanding its 15-30-year-old target market and using seasonal events to deliver a more engaging experience.
Few retailers (just 18 per cent) can use available data to adjust their marketing or communication campaigns in real-time. The nirvana for retailers is being able to target each customer in this way, down to the segment of one. Consumer decisions are rarely rational. They are emotional and organisations can leverage that insight to nudge consumers to act. Retailers need to take steps to tap into the emotional feeling of their customers in a specific moment and use that insight to inform how they engage with them. To know intimate details about what’s happening in their customer’s life - like they would a friend or family member - so they can target them with a personalised offer or communicate in the right way at exactly the right time.Consumer decisions are rarely rational. They are emotional and organisations can leverage that insight #analytics Click To Tweet
However, to achieve this, retailers need to be able to analyse all customer information available – capturing multiple interactions across all channels and blending those with an intimate knowledge of customers’ historical behaviour, to make accurate predictions about future behaviour. Armed with this insight, retailers can develop personalised content that enhances customer experience.
The accelerating pace of change
Consumer habits, products and services continue to evolve at an alarming rate with no sign of slowing. From a consumer’s perspective, it’s never been easier to get under the skin of what a brand is offering, or to scan the net for bigger and better products, services or promotions. The increasing digital exposure of brands makes it easier for consumers to have direct access to more options and “choices”. The key to retail success inevitably lies in having a responsive, flexible approach to fulfil the variety of customer demand.
Retailers need to re-engineer the way they manage customer relationships. Each single customer action needs to be used as an opportunity to deliver marketing communications that are personalised and mutually beneficial. As the pace of change continues to accelerate – both in terms of the products and services available and the ways in which consumers make their decisions – the process of learning about customers must happen in as near to real-time as possible.
More importantly, this rate of learning must be continuously maintained and take into account changes in product and service trends, prices and a whole range of macro events occurring in political and economic landscapes. Those retailers that get it right will benefit from higher conversions and stronger customer relationships. Those that don’t, risk being left behind by the competition and out of the race for customer loyalty and, ultimately, revenue.
For more about targeting customers with personalised experiences in the moment, read our report The Age of Now: Creating real-time customer engagement.