GUEST COMMENT Can CRM cushion the sales crash?
Peter Zeun is business development executive at HSO
It’s often assumed that the high street’s loss is online retail’s gain. But while it’s true that footfall in bricks and mortar stores has dropped dramatically since the digital revolution, many retailers have now identified that a symbiotic relationship between the two is the most likely route to a sustainable and successful future.
After all, although consumers may appreciate the convenience of online shopping, there are still advantages to traditional ways. In a recent survey by HSO, over half (53%), of those polled said that if logistical barriers such as inconvenient opening times, parking difficulties and so on – were removed, then the in-store experience would be their preference. In fact, 71% said that the ability to touch and feel a product was an important part of their decision to buy.
Alongside these ongoing ‘inconveniences’ are less predictable ‘events’ such as the weather. For example, John Lewis’s sales fell in the second week of December 2017 owing to inclement weather. The department store’s takings fell 0.6% to £171.4 million with director Maggie Porteous explaining: “Adverse weather and heavy snow saw fewer people head outside to shop – impacting all categories.”
What anyone outside of the upper echelons of John Lewis can’t tell is whether online sales benefitted as a result. Yet increasingly retailers are turning to customer relationship management (CRM) systems to help identify a consumer’s preferred channel and gain a single view of all their interactions regardless of how they have shopped.
In this case, the retailer might have chosen to contact all in-store customers on their database on the day of the snow and offer them an incentive to shop online that day or to return to the store when the weather improved.
CRM has been an accepted part of a sales and marketing department’s toolkit for many years now, particularly in B2B organisations. Consequently, it is often associated purely with contact management. Retailers are more likely to use an ERP for stock and supply chain control and ignore the need to manage the customer journey.
Yet, today’s customers have come to expect that a retailer will know who they are, what they have purchased in the past and their preferred ordering and delivery methods. They may buy, say, a handbag, in-store and when they get home decide to buy the same item for someone else as a birthday present via their mobile phone. They assume when they call a central number that the customer service agent will know that they have just visited one of their stores.
However, any retailer who is serious about developing an omnichannel customer relationship strategy – that is developing a single view of all customer interactions regardless of how they have shopped - should deploy an efficient CRM solution. This could be an extension of their ERP solution or as a standalone software. According to a RIS/EKN Customer Engagement study, the cost of not being omnichannel is 10% in lost revenue.
Also according to another study, this time by IDC, shoppers that buy through multiple channels have a 30% higher lifetime value than those who shop using only one channel.
With this unified view of a customer, retailers can deliver personalised messaging and targeted offers. By connecting the high street store to the digital world, they facilitate a seamless customer journey from a mobile app to point of sale and beyond.
One of the most valuable aspects of a CRM system is the data it generates. This can be used to direct communications, offers and content to customers in ways that show they are being identified as individuals. When you engage with a customer in this way, it is making them feel important.
Improving the customer experience can include helping them save money by timely discount offers; save time by providing visibility of stock levels and in-store availability of goods and add value by providing useful information and advice. It can attempt to influence purchasing behaviour by rewarding loyalty by holding exclusive shopping events, pre-sales previews and additional discounts.
Other incentives include dedicated customer service, customer appreciation letters and personalised communications – and of course, the loyalty reward scheme, allowing retailers to deliver offers based on purchase history. It’s all about capturing the imagination of the client. For example, you could devise an offer on a coat one month, a hat to match another and a handbag to complete the outfit the following week.
Creative retailers can find a way to encourage their customers to forward their content on social networks, sharing details of things they’ve bought and writing reviews. But they must bear in mind the whole time that if the comment is negative it could do significant damage – and so be ready to counteract this if and when it happens.
This is why it pays for retailers to stay connected with their customers and react to any feedback, no matter what the sentiment may be. Social features within a CRM system will provide the easiest way for retailers to do this.
With a powerful CRM solution and strategy in place, retailers can develop social media engagement, roll out effective loyalty programmes and utilise marketing automation tools, facilitating a retailer’s whole omnichannel experience.
As a result, it’s no longer a case of the high street versus online, but encouraging loyalty to the brand as a whole and then encouraging customers to shop in whichever way is best for them at the time.
Photo credit: Mykyta