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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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GUEST COMMENT From online to advocacy the customer journey is taking a dramatic new turn

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GUEST COMMENT From online to advocacy the customer journey is taking a dramatic new turn
GUEST COMMENT From online to advocacy the customer journey is taking a dramatic new turn
We all know that the way we shop has changed. Our lives are busier. Social, ethical and sustainability concerns guide our choices. We get our latest great item of clothing delivered to our house within 90 minutes of ordering on our mobile, and we expect our favourite retailers to service and not just sell to us.

This is the era of the smarter customer and retailers must engage this new breed by offering immediacy and personalisation as a minimum requirement, through deep understanding of each shopper and being able to deliver instantaneously on promises across whatever means customers connect.

Although easy to understand, this is still hard to do. Retailers have to drive the last few per cent of cost out of their operations while also investing in new experiences, which becomes a difficult balance of cost versus service. Last mile efficiency is compelling retailers to bet on ever more accurate (and rigid) forecasts, while competition is forcing the industry to invest in delivering new experiences using the latest innovations.

We are therefore seeing the digitisation of the front office – first started in IT companies and front of house in the hospitality sector – moving into the high street. High street retailers are trialling innovations such as augmented reality to bring digital into the customer side of the store. Mobiles are giving consumers access to feature-adding apps and social data is revealing the all-important ‘why’ customers purchase, beyond just the ‘what’. Technology and insight are combining to improve the shopping experience. The shop has become a stage as retailers use drama and personalisation to win back customers into the store. Retailers, in short, are focused on great brand-differentiating retail ‘theatre’, at the lowest possible cost.

Dramatic advantage: from great in-store experience to advocacy

Retail theatre is arguably now more achievable than ever, delivering the full value of the retail brand across multiple channels often all at once. The store is where retailers will combine the best online experience with the best offline one, augmenting the physical with the virtual to create experiences that will make shoppers want to try and then buy. In the future the store will be the digital front to the retailer’s brand, not the website.

Even for shoppers who don’t stray far from the sofa and might see the store as the “old model”, the shop is still more often than not the stocking point, the collection place, and where they will top up an order or return goods, browse for ideas or seek advice.

Offering these transaction points and connecting them is essential in understanding the smarter customer. If retailers can see this big connected customer picture, they can then do more to keep customers loyal in the face of competitive offers, getting them to spend more and even market on retailers’ behalf. This is called advocacy and is arguably the most important topic on every retail marketer’s agenda.

Advocacy

Advocacy is important because it is about understanding the customer, being relevant, adding value and listening to them. Customer advocacy is the ultimate customer relationship towards which all retailers should be aiming. It is the real target of all customer engagement programmes as it is what ultimately will lead to a higher lifetime spend, and keep customers coming back for more, while also performing the most powerful form of marketing.

As such it takes on many forms. It could be as easy as providing vouchers, links and incentives to share promotions with friends, or it can expand to more sophisticated interactions such as product services and calling on a customer's creativity to submit video, apps or other content on behalf of the brand. Whatever they may be, retailers need to give their customers the tools and the data to enable them to be advocates.

Outsourcing marketing to the customer is the ultimate form of advocacy and online is the natural channel to help retail achieve this new intimacy with the customer. Loyalty cards are well established and offer some insight, but the utopia would be to be able to collect insight in a non-intrusive way, and use it to deliver real value and the type of personalised content that makes customers return.

The insight jigsaw completed in-store

Retailers are already collecting data outside of the store from multiple sources including our social networks, our credit card and smartphone usage, web and mobile browsing. Moving this data collection in store is the next step in multi-channel maturity. Retailers want to be able to understand key ‘moments of truth’ that drive interest for a customer browsing the aisles – when they arrive, what they are looking at, what goes in the basket, what advert or promotion was viewed before they arrived, how long they stayed in a particular section and many other examples applying to a specific customer buying a specific product. Putting together this jigsaw puzzle of parts to create a picture of a consumer is critical in serving the smarter customer – the more pieces providing the better clarity of the picture.

This is not new. For example retailers have previously invested in insurance services in order to acquire rich customer data on postcode, family members and key financial data. However this implied a delay in targeting, and good online examples already happening use digital to create immediate experiences. This is the fundamental smarter customer online principle: use a digital service to offer a great experience that also creates a data point that adds to the customer picture. Good examples in retail include mobile help in store to capture shopping preferences, booking delivery slots to capture address information, call centres responding on social media to capture email IDs and direct mail serialised promotions that join address to store and basket. These all help create the customer picture.

Cross-sell based on behaviour

Once retailers have this picture, albeit with gaps, they can see their customer and infer behaviour, helping them to apply the key marketing tactic that may help propel this customer to the place of those who are like them but spend more. Many retailers have failed to realise the power of the community and instead market on previous individual purchases, attempting to sell customers that camera or shed over and over again. The real value is to cross-sell based on what is proven, by behaviour, by product category and the all-important customer picture, including that specific customer’s attitudes, groups, emotions and previous purchases helping to create something they can reliably use to offer as a personalised next best action.

So what are retailers doing today to get the store to be an even better experience than online? New technology is allowing them to use social groups on Twitter and Facebook to infer behaviour and to use mobile phones as identification on arrival in-store. Technology is then helping the retailer to add the all-important context; not only does the retailer know who the customer is, but they also know where they are, the time of day and potential mission.

With this new level of insight retailers will be able to deliver valuable next best actions customers will want to get involved in whether they are researching, browsing, buying or asking for service. Placing the store in the centre of the very best next action will continue to foster a community of advocates. This is what the smarter customer is demanding and this is what technology will help retailers deliver in the high street because it is easier, more exciting and more rewarding than sitting in front of the tablet at home.

Danny Bagge is digital front office leader, IBM UK and Ireland.
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