Stores are closing at an alarming rate and once proud retailers are downsizing, or worse, going under. And it is all because they are getting it all wrong about who 'the customer' actually is and how to look after them. Ivan Mazour, CEO, Ometria
Nowadays, each week seems to bring with it news of another major high street retailer struggling to turn a profit. This is normally attributed to an overall dip in consumer spending, or recent weather putting consumers off hitting the shops. It’s rare that a retailer will come out and blame the fall in sales on the fact that they are just getting things wrong, or just aren’t appealing to the customer anymore.
When news broke recently that Debenhams has been hit with underperforming figures, the blame was placed on consumers preferring to shop online. But will its plans to offer in-store gyms, beauty bars and new food and drink concessions (including a Nandos) be enough to encourage consumers back in store?
Our guess is that it will depend on how much the retailer is also willing to invest in looking after, and retaining, its customers on a 1 to 1 level.
‘Customer’ vs ‘Consumer’—what’s the difference?
The words ‘customer’ and ‘consumer’ are often used interchangeably, as if they mean the same thing. But when it comes to brand experience, the terms are revealing of two entirely different approaches—one of which is far more future-proofed than the other.
‘Consumers’ are the unknown: a group of people that may or may not have an affiliation with a brand. They can be broken down into neat conceptual groups—for example, “one thousand 18-30 year olds have been surveyed to show that 89% of them are actually now Thrillenials
”. But how useful are ‘tribes’ and target demographics to retailers who are actually trying to sell a product?
A consumer-centric mindset in marketing translates as throwing out the same message to the masses in the blind hope that it will resonate with at least some of them and prompt them to make a purchase. It promotes the kind of unpersonalised ‘batch and blast’ marketing that recipients have been contending with for years (and are fast growing tired of).
The more a retailer doubles down on these generic, undifferentiated marketing messages, the more they risk alienating those who don’t happen to be interested in that message at that time. And the more messages a consumer receives that they have no interest in, the more they tune out and the less likely they are to feel any sort of affinity with that brand.
This is why it’s time for retailers to stop selling to consumers and start focusing on the customer
What does customer-centric marketing look like in 2018?
When I say ‘focusing on the customer’, I don’t necessarily mean marketers should forego all acquisition efforts in favour of customer retention (although retailers would certainly do well to focus more on maximising the lifetime value of individual shoppers instead of pouring money into increasingly expensive acquisition channels).
More, I believe that by putting the individual customer (the things they buy, their behaviour when they browse your site, the amount of loyalty they’ve shown towards a brand) at the centre of marketing, retailers can start to create meaningful messages that inspire action, loyalty and ultimately increase revenue.
Years ago, the customer-centric experience that kept people coming back was the local newsagent remembering and anticipating regulars’ daily orders, or the shop assistant who had worked long enough to know what each customer wanted before they knew it themselves.
Vendors would make their clientele feel special, and suggest products based on a deep understanding of that person and their preferences.
This concept of a customer-centric experience shouldn’t disappear as retailers scale—in fact, with so much competition, it’s now more important than ever for retailers to get to know their customers as individuals and treat them accordingly.
What has changed is how they can go about doing this.
The majority of customers today shop in many different ways, from far-reaching places and on a host of different devices. Consequently, it’s up to a retailer to communicate with them on the right channel, at the right moment and with the right message.
From newsletters displaying individually-personalised product recommendations to tailored offers pitched at exactly the right level to prompt an individual shopper to purchase to mobile push notifications letting a customer know something from their wish-list is now back in stock, the customer experience today sits across all devices and can be powered through any channel in order to ensure a message delivers.
Customers are increasingly expecting this type of personalised treatment, so why aren’t more retailers sending customer-centric marketing messages?
The first is lack of joined-up customer data - too often customer data is siloed in different places, making it impossible to extract any sort of actionable insight that could help send a personalised message. For instance, a retailer may consider a customer ‘lapsed’ because they’ve not made a purchase in the last year online, when actually that customer has been regularly making offline purchases in-store during that time.
Likewise, the ability to extract meaningful insight out of all of the customer data a retailer is sitting on and turn it into personalised marketing messages is often a challenge; given the sheer scale of online shopping in the modern world, it would in most cases be humanly impossible to get to know each and every customer and offer personalised recommendations and offers to them.
Luckily for retailers, the tech that enables them to put the customer first - whether that’s creating a single customer view that brings together everything a retailer knows about a customer into one place, using machine learning to extract valuable insight from that data, or turning that insight into individually-personalised marketing messages - isn’t a far-off dream, it’s available to them now.
The customer is always first
In the short term it might look good for this month’s sales figures to get a quick sale from a ‘batch and blast’ mailout. However. by providing a genuinely tailored and meaningful experience, a customer is far more likely to stick around for longer, invest more in a brand and thus generate more long-term value for the brand in the future.
The data is available for brands to give customers the same personalised experience we used to expect from our local grocery store in previous years. The retailers that will survive will be the ones that use this insight to create an experience for their actual customers and stop focusing on acquiring the unknown.
This goes beyond making sure that the high street survives; it spreads across the thousands of retailers that are all fighting with likes of Amazon for market share.
It’s time for retailers to stop marketing to consumers and to start thinking about their customers because in this day and age, people won’t accept anything less.