Fifty-five percent of households have Amazon Prime, but a “need it now” mentality and desire to see, touch and try products before buying still drives consumers to stores. But, for retailers striving to build brand loyalty and become the store of choice, the pressure to differentiate themselves by providing the most enhanced, consistent shopping experience has never been greater.
This is what retailers keep hearing, anyway: to drive loyalty and increase sales, retailers must know every customer through and through, anticipate their preferences and engage with them across every stage of their buying journey. To do this, they must invest in technologies that will help them to better harness customer data to personalize their customers’ experience.
A promise of increased sales and loyalty is one thing, but is making these investments really worth it for retailers?
If it’s done right, the answer is unequivocally yes.
There’s no better evidence that personalizing the customer’s journey leads to sales growth than looking at real sales numbers. Global research and advisory firm IHL recently did just that, and found that retailers that are willing to make the investment in delivering consistent and personalized customer experiences can expect sales growth that is as much as 3x their competitors.
Those that have already implemented this strategy are seeing the results.
IHL looked at food/drug/mass merchant retailers who are already personalizing the journey, and found that 2018 sales growth was 55 percent higher. For 2019, sales growth for this retail category is expected to be 48 percent higher than their competitors.
The research is clear: personalization is effective, but what does it really take to personalize the customer journey? It’s about more than investing in technology. It’s about taking control of data and leveraging it across all customer touch points.
There are several tools retailers plan to utilize to track and provide personalized experiences in the store, according to IHL. These tactics include loyalty programs, in-app, in-store Wi-Fi, heat mapping/traffic counting and tracking online behavior.
These tools have one thing in common: data.
Retailers are constantly collecting data from their customers at every point of interaction, from web browsing to loyalty programs to completed purchases. These new tools add valuable data to the collection.
All of this data gathering is great, but it’s how the data is being leveraged that is crucial to success.
Becoming a data-driven retailer is no easy job. Often, retailers find themselves with data elements sitting in siloed areas of their business, under-leveraged. This is why data integration is the first step for any retailer looking to increase sales with more personalized cross-channel experiences.
Within the next two years, the percent of retailers who will be using the following tools to track and provide personalized experience:
It’s important that every system and application that a retailer has, both online and in-store, share data so it can be analyzed within defined customer contexts to deliver that consistent personalized experience. This can be a challenge for retailers that have historically kept online and in-store systems separate, but is well worth it. For example, if a customer browses for sneakers online and ultimately buys them in-store, it would be a poor experience and negative for brand identity for that customer to continue to receive cart abandonment emails or other online offers related to the sneakers.
The reality is that for most retailers’, physical inventory accuracy is less than 75% precise, compared to systems totals. To foster more positive customer experiences, many retailers are investing in in-store RFID and computer vision technology to get a more accurate view of their inventory. An integrated view can help retailers ensure that the most popular products, brands, sizes and colors are always in stock across channels, and ultimately drive repeat sales.
When the customer walks in the store, she’s greeted by a sales associate armed with a tablet. He quickly loads her loyalty information and instantly sees her online browsing history, the brand she prefers and her size — along with the store’s real-time inventory.
With this information, the sales associate can engage with the customer in a personalized way. He highlights the sneaker inventory that would be of interest, along with additional accessory options based on historical preferences and browsing data. Using the tablet’s integrated loyalty and point-of-sale capabilities, the associate can also provide a discount and take the payment method of choice on the spot. Afterwards, the customer receives an email thanking her for the purchase and providing additional personalized offers.
Customer expectations for seamless shopping journeys are growing. The reality today is customers are going to choose the retailers that provide the best experience, and discard the ones that don’t. Knowing what they like, what they want now and what they will want in the future is now a necessity for all retailers that want to compete and succeed.
The good news is that technology and data analytics are is e volving with it. Retailers now have even more tools than ever to capture and analyze customer data and use it to pro vide personalized experiences in real-time. Those that are using them are seeing the results.
In the future, these tools will only grow. Proximity marketing technology like beacons and geofencing will allow locationbased interactions between retailers and customers. Authentication technology like biometrics is being integrated into payment technology to more accurately and securely identify customers. Connected screens, popular in other areas of the world, have the potential to let retailers meet and interact with their customers in new, personalized ways.
The sheer mass of data becoming available through technology today and in the future may seem daunting to retailers. But, if they commit to becoming an integrated data-driven retailer now, they can separate themselves from the competition, drive increased revenue and exceed customer expectations.