If you mention data and retailing to most marketers they will generally think of two real life examples. The first is Tesco and how it used data from its Club Card initiative to transform its business. The second example is likely to be Amazon , and how it has led the way in understanding customer behaviour to serve relevant and personalised promotions.
Of these two examples, the first highlights how data was gathered and analysed to transform supermarket shopping; a trend that has continued with loyalty cards becoming commonplace. The second is the primary example of how online retailers have access to data and use it, thanks to each shopper’s mere presence on the website generating data.
But what about data being gathered, and used, within bricks and mortar shops? Supermarkets aside, the examples are pretty sparse. The reasons for this are very simple: there are fewer opportunities to collect customer data, the implementation of loyalty cards is expensive and prohibitive for most retailers, and the amount of information gathered in most transactions is low to non-existent compared to ecommerce. So what can be done to help High Street retailers get better access to information about who browses and spends in their stores? What can we learn from Tesco and Amazon as examples of best practice?
I live near a middle-sized market town. We are very lucky in that we can buy a lot of our products from specialised retailers such as the local butcher, wine shop, clothing shops and so forth. To a certain extent we already have loyalty to these stores, but they don’t know who we are in any real detail. That said, some do provide loyalty schemes; both the butcher and the wine shop run multi-purchase redemption cards. However, in reality, they still don’t know who we are.
The challenge here, in my opinion, goes beyond just connectivity. Although better Wi-Fi and mobile coverage would help, something as simple as providing customers with an e-receipt – like Apple stores do – could make a huge difference. As everyone who has shopped recently in an Apple store knows, by providing just an email address to receive your receipt electronically, you are engaging in a dialogue. This creates an opportunity for the retailer to develop the relationship with the customer, including measuring and building loyalty. Personally, I’d be happy to share information with my local shops because I am already loyal, so the chance for them to offer me relevant products and promotions is appealing.
Smaller retailers could be deterred from offering e-receipts based on the perceived cost involved, but they are paying for credit card machines that could easily provide an e-receipt, and the uplift in customer sales would make the business case much stronger, I’m sure. For example, I was at a concert recently where the t-shirts and other merchandise could be bought via a phone or credit card. If this service can be provided in a pop-up at a concert, why can’t it be done by a small retailer in store? Sometimes, and this is where education can help, it is simply about understanding the options available. The GO ON initiative is an excellent venture and should be supported widely; by helping make our local small business owners more tech-savvy, they can have a hugely positive impact.
We also have some retail chain stores in our local town, brands that my wife in particular also likes to shop with online. For me, not connecting the online and in-store channels to recognise and reward customers is a missed opportunity. This is where connectivity needs to play a role. As an example, if a customer walks into a store and the assistant receives a notification that that customer has viewed a product on the store’s website, and can then show the item to the customer, surely it can only increase sales.
This may sound fanciful, but how hard would it really be to implement? It is no different from visiting a website, having your last-viewed product presented to you again and choosing whether or not to buy it. The challenge is the recognition of the customer, and the same challenge exists on-line. As long as the necessary opt-ins are provided and a mobile number is shared, then it comes down to the technical challenge of connecting to the mobile, recognising it and triggering a message, and we know that all of this can be done. Supermarkets have been striving to implement a system such as this but, in general, have failed. My view is that this is about relevance and excitement of the product.
Using a bricks and mortar store as a ‘show room’ is already proving a popular way for technology to help provide consumers with additional flexibility. Being able to look up the provenance, price, availability, selection and colour of a product and see what can be bought in-store, versus on-line, makes a lot of sense. Again, having better Wi-Fi coverage in retail stores to enable customers to connect can only help to make shopping a more digital, and engaging, experience.
Finally, we have an excellent book and coffee shop in our little town. Their challenge is one that is difficult to fix: how do you retain customers who are fundamentally rejecting your product? No matter how many of us book lovers try and convince ourselves that the book is not dying, in reality many people buy a coffee, browse the books and then download them from Amazon. In this instance, what is the shop owner to do?
Having considered this, the shop owner actually has two problems. The first is the ‘Kindle convert’ customer that browses with no intention to buy. He has changed his business model to make use of this, adding more seats to sell coffee and accepting that, in some cases, people won’t. For him, having more technology won’t change this behaviour.
The shop owner has also changed his stock to be more specialist, showcasing high-end, hardback and reference books. Books that people buy because they want to keep them, which leads me onto the second problem. As a rule this works very well, but every now and again, when a book is very popular, the shop owner gets blown away by a national retail book chain, unable to make the most of the hype. The shop owner makes £5 on a book of that size, whereas the big retailer may sell it for £10 less than he did. Sometimes the answer to supporting the local retailer is not just a technology issue, it is also about creating a level playing field. If large retail chains ‘take on’ the smaller retailer, they will win. Is that fair?
There is often discussion around the provision of mobile connectivity for shoppers, but will this help level the playing field? I believe it will, as free Wi-Fi creates instant connectivity. However, waiting for this to be implemented in every privately-owned retail store could take some time. By offering e-receipts, or capturing email addresses in store, customer data can be gathered straight away and begin a low-end relationship marketing programme.
As we are all well aware, the more we get to know our customers and the better the service we provide them with, the longer and more fruitful the relationship we have with them.
Scott Logie is MD of REaD Group Insight