Analytics Strengthen Customer Relationships

In the day of technological advancements, buyers are empowered with multi-channel experiences over social media, internet, mobile etc. Since the consumer today is more informed than ever, it becomes imperative for retailers to trap all touch points and build strong customer relationships says a recent study on ‘Analytics in Retail’ by Xchanging. By applying the Analytics – the right algorithms to the right data sets, retailers can drive the right decisions across their merchandising, marketing and retail operations. Read more about the role of Analytics in Retail

– Compiled by Preeti Gaur

Evolving technological advancements, such as the Internet, social media and mobile, have caused a seismic shift to the retail landscape. Customers are more informed and therefore more selective in their buying decisions. Approximately 60% of respondents in the Deloitte Annual Holiday Survey 2013 believed they were better informed than store associates about available merchandise, coupons and competitive pricing.

The retailers have taken a cue from the changing consumer buying behaviour, and have adopted an omnichannel approach. All touch points, such as brick-and-mortar stores, online shopping sites and mobile shopping, are tapped for providing a consistent shopping experience.

So what does this mean for you, the retail community? To begin with, it means identifying how you can continue to offer a superior customer experience across all channels and at the same time drive customer loyalty. The key to this is to understand the consumer psyche and offer the right products and services, which will resonate with the evolving lifestyle and tastes of buyers.

Clicks or Bricks – Customer Insight is the  way Forward

The impact of changing consumer buying behaviour doesn’t vary much for the clicks or bricks retail businesses. Retailers have adopted a multichannel approach to cater to the increasing multi-device use. This facilitates shopping 24x7, from anywhere and everywhere. Internet and Social Media has empowered the buyers with online reviews, product comparisons and latest offers. Changing consumer buying behaviour has made retailers understand that creating an efficient strategy to manage customer insights is imperative to influence buying decisions.

This means that you need to:

•    Tune in to your customers’ feedback

•    Analyse feedback data to generate actionable results

•    Treat this data to trigger innovative product and service ideas

•    Talk to your customers on social media to know their views on product innovation

While the Business-to-Consumer (B2C) e-commerce companies may have taken the lead by doing things differently, offering a personalized shopping experience, through tailored landing pages and customized recommendations, based on previous search history—the brick-and-mortar businesses aren’t far behind. They are aware that change is imminent and they need to act now to win later.

The traditional store has also transformed, from selling available products, to offering a multichannel lifestyle experience, by displaying the full range of products and services. Irrespective of channels, retailers are focusing more on understanding their customers’ personal characteristics and shopping preferences.

This Technology-driven change facilitates cross-channel outreach, and engagement opportunities. For example, the introduction of Bluetooth Low Energy (BLE) technology is set to revolutionize the buyer-seller engagement, by offering a personalized shopping experience at traditional stores. Under BLE technology, physical sensors (called Beacons) are placed in stores, to facilitate tailored notifications to be sent directly to a customer’s smartphone the moment he/she walks into the store. By opening the text-style message, users can go directly to the retailer’s application, showing anything from time-sensitive discounts, to loyalty points, etc.

Shoppers Need Recognition

The majority of respondents indicated that they want a personalized experience, whether browsing online or within a store. In order to understand how the buyer expects to be spoken to—whether through a smartphone app, through the store associate or instant chat on the website—retailers need to delve deep into their customers’ shopping patterns.

This requires understanding of certain consumer statistics such as how long they browse, sections where they spend the maximum time, and most importantly, whether they make a purchase or not. So, you have to plough through a huge amount of consumer data generated from vast amounts transactions, Point-of-Sale (POS) systems and social media interactions, etc. to gather relevant insights. Thus, you will be able to drive revenue growth by:

•    Designing and delivering better products,

•    Identifying focus areas for marketing, by gauging the effectiveness of promotional campaigns,

•    Increasing your customer base through better product and marketing strategies

•  Driving loyalty programmes.

However, the challenge isn’t the lack of data. Rather, it is how and what to interpret from the sheer volume of data generated from multiple systems, channels and geographies. As a retailer, you must first identify the expectations otherwise you will waste valuable time and resources in capturing irrelevant data that will not help you answer your core question: What does your customer want? According to IDC (a leading research and consultancy firm) up to 90% of the world’s information is hidden in formats beyond the competencies of the information management technologies used by retailers.

Real Time Appeal

Retailers are taking greater advantage of data to predict consumer behaviour and respond in real-time to consumers’ individual needs. The graph represents in what areas the retailers are using Analytics to gain business advantage.

Analytics underpins the 3Cs

To build a stronger customer relationship, retailers need to focus on the three Cs—Customize, Connect and Converge. Customize your products, services and marketing messages to Connect deeply with your customer, and build a long-term relationship with them. All of this is underpinned by the emergence of multi-channel retail, and how you Converge your front-end channels and your back-end operations to provide that customized experience in a seamless manner. Analytics has a role to play at every stage in each of these three Cs in order to drive the right decisions across your merchandising, marketing and retail operations.

Customize

Retailers are working towards offering a more targeted and personalized experience to their customers. Consequently, they create more number of opportunities to cross-sell and up-sell related products, and also prevent shoppers from switching over to competition.

Predictive Analytics acts like a crystal ball, empowering retailers to:

• Analyze large amounts of data related to market, competition, product, customer and supply chain, by using algorithms to discover patterns and trends,

• Improve the shopping experience with multichannel data management, which allows customers to order products from multiple devices and drive volume by offering the right product through the right channel,

• Improve effectiveness of sales and marketing activities, and realize greater Returns On Investment (ROI)

Connect

In order to gain customers’ attention, it is important that retail marketers understand exactly what the customer is looking for, in what format, and when. Only then you can engage with them in a more meaningful manner. You can drive effective customer acquisition, focused marketing promotions and campaigns across channels - online and offline, by leveraging Marketing Analytics.

It allows you to sift through real-time customer data to get detailed insights on customer preferences. So, you can introduce targeted marketing campaigns by varying the look, messaging and tone for the intended customer set. In addition, it also allows you to measure, manage, and analyze the efficiency of your marketing campaign.

Marketing and Customer Analytics helps retailers to:

•    Launch successful targeted marketing, advertising, promotions and product offers to attract customers,

•    Modify existing pricing strategies, to offer competitive prices, as well as sustain profit margins,

•    Identify profitable target customers, via customer segmentation and profiling

•    Establish a close relationship with customers based on a deep discernment of their behaviour and identification of their requirements,

•    Reduce customer churn by identifying the ones likely to attrite, and determine drivers and predictors of attrition; thus helping you take pre-emptive action.

Converge

By consolidating different applications and services, Analytics allow you to:

•    Offer a smooth, multichannel customer experience by allowing buyers to research a product in one channel, order it online or through mobile, and then collect it from a store,

•    Develop a collaborative, real-time supply chain with Predictive Analytics,

•    Help improve vendor management by measuring supplier performance against set parameters.

Conclusion

In order to drive smart retail operations across all channels, Analytics is emerging as a key catalyst due to the following:

•    Analytics effectively allows analyses of vast amounts of data. Retailers can use the insights gleaned to expand the scope of their market strategies, to include multiple marketing channels, and run digital advertising and social media campaigns.

•    The opportunity to achieve competitive advantage from analytics powered retail is enormous. On the product front, it helps in tracking the customer needs, leading to the design and creation of innovative product lines, revenue streams, and in some cases, new markets. On the operational front, organizations can leverage data to gain better understanding of how to improve efficiency across business.

•    Analytics, on the back of the arrival of Big Data, is poised to revolutionize the way retailers operate globally, and drive the separation between the good and the great!