How customer data drives new retail success

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Blending online, mobile, and offline channels into a singular “new retail” experience is no longer a theory, fad, or gimmick. It’s what customers expect, and how retail businesses will thrive in the future.

Examples of this best-of-all-worlds approach are popping up everywhere. Once digital-only companies like Amazon and Bonobos are now opening brick-and-mortar stores, and, importantly, reaping big profits. Meanwhile, former brick-and-mortar stalwarts like Nordstrom and Sephora are winning more foot traffic and boosting online sales thanks to new digital experiences.

Echoing throughout retail boardrooms around the globe you will hear a resounding question: How do we blend channels to create a seamless shopping experience? At the foundation of your answer should be a holistic approach to customer data management.

Let’s review why this is such a crucial element to new retail success.

Defining holistic customer data management 

For too long, retailers treated online and offline channels as separate digital ecosystems. Customer data became siloed, resulting in incomplete, duplicate, and fragmented profiles that were costly and difficult to track and manage.

The digitally-savvy customers of today expect personalization down to the segment of one. How can you deliver the real-time shopping experiences customers love – online, in a store, and everywhere in between – without a unified view of their data?

Using a holistic customer data approach, an individual, living customer profile becomes the centralized source of truth for online data, mobile apps, and data collected from in-store visits. It can include attributes covering identity data like full names, delivery addresses, e-mail and mobile devices; consent and communication preference data; and first-party customer preferences gathered over time such as “likes”, favorite colors, sizes, brand preferences, or styles.

With these kinds of attributes consolidated and centralized, your enterprise can more easily and accurately orchestrate the full profile – or specific attributes – to and from downstream applications and services. This bidirectional synchronization enforces accurate, first-party data across all of your touch points. In other words, it allows you to “change once, and update everywhere.”

How customer data drives new retail success

There are some significant benefits to both customers and businesses when incorporating holistic customer data management into a new retail strategy. Let’s review a few of them. 

Finding the right brick-and-mortar locations: Shipping is a key point of differentiation; neither customers nor retailers want to pay high shipping fees, and everyone wants fast delivery times. As businesses consider opening brick-and-mortar stores, they can analyze their own customer data (formerly siloed in the online channel), to find locations with high densities of customers near their distribution centers.

By opening stores in these locations, retailers can offer fast delivery options without blowing the budget on shipping.

Boosting foot traffic: Given the pervasiveness of mobile devices, retailers are tapping into the GPS location of their customers and creating a geofence around their store that alerts them when a customer is nearby. They can then send them messages and offers to boost foot traffic.

This marketing strategy involves several integrated technologies, and can only work when customer data moves with speed and accuracy between them.

Order online and pick up in-store: The “order online and pick up/return in store” service is a signature of modern personalized shopping.

For customers, the experience is more secure, faster than home delivery, and saves money on shipping fees. To make this service work seamlessly, the retailer needs to tap a wide range of customer data to confirm the customer’s identity and transaction history when they arrive in the store. This service also requires activation of multiple systems in the front office (including CRM, marketing automation, and email service providers) and back office (including supply chain software and ERP systems).

As opposed to mapping multiple silos of data, it’s more efficient to orchestrate an up-to-date, unified profile across the technology stack. In addition, governing profiles centrally makes it easier to keep customer identity attributes fresh, speeding the identification process in the store, and translating into fewer cases of identification glitches due to duplicate datasets or human error.

Building trust: New retail wouldn’t exist without technology innovation. Amazon Go stores take advantage of computer vision, sensor fusion, and deep learning so customers can walk out with what they want and skip checkout lines. They also mine the data collected by these technologies to personalize offers and marketing communications.

If your company is exploring providing a similar experience, a key pillar of your strategy must be gaining consent to collect and process the required data, and managing that consent through the customer’s journey. 

Collecting consent demonstrates transparency and builds consumer trust throughout their journey with the business. If a customer consents to receive product recommendations via email based on in-store purchases, those recommendations are likely to lead to more sales. Conversely, sending those recommendations without asking for permission may be unwelcome.

Making the most of retail space: When customer data silos fall, new insights can prompt better business decisions about retail space and customer experiences.

An example: Menswear brand Bonobos has opened “guideshops” in prime Chicago and New York City locations. These shops have almost no inventory. Instead, customers try on clothes, feel them, and get expert advice from the store’s sales reps. Purchases are made in the store through an e-commerce platform and delivered as fast as possible.

The sales rep can tell customers when the clothes will be delivered, and can also record the customer’s style, size, and color preferences for recommendations and personalization in marketing communications, or for streamlining future in-store visits.

The blended online and offline experience also enables significant cost savings: With no inventory, they can rent smaller stores and optimize staffing requirements.

Enhancing loyalty through partnerships: Sharing customer data with partners is proving to be a big advantage for retailers – if the customer’s journey advances beyond your products and services, strategic partnerships can keep customers in a larger ecosystem and deepen loyalty.

A prime example is Starbucks’ partnership with Spotify. By integrating the Spotify mobile app with the Starbucks My Rewards program and app, a customer can hear a song in the store, open either app, identify the song, and save it to a playlist.

Customers gain a fun, easy way to expand their music libraries, while Spotify has seen an increase in paid subscriptions, since users are incentivized with extra Starbucks reward points to sign up. 

The customer profile lies at the heart of this partnership. By creating the ability to share a customer’s music playlist between their apps, both companies provide better experiences.

Customer data is at the heart of the new retail evolution

Just a couple of years ago, the death of retail seemed imminent. Now, brands are finding success by integrating mobile technologies, customer data management solutions, and the physical storefront.

The end result: A convenient and personalized experience that gets better over time, no matter where, when, or how the customer chooses to engage.  

By 2020, your customers will manage 85% of their relationships online.
Learn how omnichannel CX can help to provide everything they want – and more.

Sonny Dasgupta
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Sonny Dasgupta

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