How the retail revolution forces brands to go beyond CRM


The retail landscape is rapidly changing, and already looks dramatically different than it did even ten years ago. Consumer decisions are influenced by social media; shoppers use their smartphones in store to compare prices and read reviews; and bricks-and-mortar retailers are competing with online stores that are offering same-day delivery.

It all adds up to a retail revolution. Some have even suggested that the end is nigh for traditional bricks-and-mortar stores. This is, of course, overly dramatic. But there is little doubt that those retailers that do not adapt will find themselves struggling to compete.

Interestingly, investment in CRM continues to rise in the retail sector, as the retail landscape alters. A report last year by eTail found that almost 50% of retailers are planning to spend more on CRM systems over the following 12 months, while similar reports by the likes of Martec International also reveal an uptick in CRM spending. So why are retailers upping their investment in these systems? Let’s take a look at some of the retail trends that could be driving adoption.

The changing complexity of the customer journey

The customer’s path to purchase is becoming increasingly complex, and often encompasses many different channels. What was once a linear progression from the identification of the need through consideration, information gathering, trial/review and decision-making to purchase, is now more fragmented.

New digital channels – and in particular social media and mobile – have had huge ramifications for the customer journey.

Through social media, customers able to easily solicit recommendations and opinions of their friends and even people they don’t know – for instance, consider the impact of TripAdvisor in the travel industry. Elsewhere, smartphones are playing a significant and increasing role in the purchase decision, with many consumers using mobile to research and/or make purchase. Consider how common it now is for customers to check prices online whilst in store.

Bridging this gap between the digital world and the offline world is a real challenge to retailers. But CRM can help. CRM systems can provide a cohesive picture of all the interactions that a consumer has had across multiple channels via a unified system of record. By connecting all the stakeholders involved in a customer journey – for instance, marketers, sales people and support teams – retailers can thereby provide a better joined-up experience for consumers.

Customers are demanding a better in-store experience.

Research indicates that customers are increasingly unprepared to queue to be served in retail outlets. A study of shopping habits by Sage Pay found that 53% of consumers have walked out of a store as a result of waiting time, with only a quarter (26%) stating that they’re happy to queue. Indeed, the main pain point for in-store shopping occurs at tills, according to the survey, with three quarters (73%) reporting payment in retail outlets as the most irritating aspect of the experience. Why are customers becoming so impatient? This is the impact of ecommerce. And if a retail store can’t replicate the speed and convenience of an online store, consumers will spend elsewhere.

The good news is that integrating CRM into your retail POS can help retailers to respond. For instance, if CRM data is available for retail salespeople on their POS device, they can access information such as purchase histories and personal tastes to tailor the customer experience. And the data can also enable salespeople to identify if the customer is a regular shopper and therefore likely to benefit from being part of a loyalty program.

Beacon technologies are driving retail innovation

Beacons are sensors that are embedded in a store’s digital touchpoints, such as shelves, signs and displays, and enable interactions with customers’ smartphones. With retailers finding this to be a successful way to send in-store deals to shoppers, and drive a more personal and interactive experience for their customers, the installation of beacons is on the rise. There are presently over 30,000 beacons active in the US, and the number is expected to rise above 4 million by 2018.

But beacons can also provide retailers with an opportunity to collect large amounts of valuable data about customers and their behaviour. This information about the busiest locations and the busiest times of the day, and dwell times in particular locations, enables stores to optimise their services, such as allocating appropriate staff levels in departments. Integrating beacon data with a CRM system allows retailers to examine metrics such as the effectiveness of merchandising, loyalty program activity, the quality of service (i.e. in terms of queuing and abandonment), and behavioral details regarding visits and transactions, which can provide useful steer for the marketing department.


Neil Davey
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December 3, 2015
Neil Davey

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