GUEST COMMENT How can online retailers foster more meaningful relationships with customers?
The biggest challenges facing online retail businesses are often perennial. How can I make my customers more sticky, more loyal, less likely to browse around, when that’s likely how they found me in the first place? These are cyclical issues – no customer is static and businesses of any kind have to work continuously to keep pace with change. But in an online retail world where infinite choice is a mere mouse click away, how can a brand make sure it is continuously responsive and adapting to customer needs? Essentially, how can they protect their business’ greatest asset?
The answer, of course, to all of these worries, is greater knowledge. What do my customers really want? Why do they buy from me? How can I serve them better and give them more of that? And of course this answer is usually just as straightforward; the answer lies in data. It’s a solution that online-only, digital native businesses are often more capable of seeking than more traditional organisations, who may have ingrained organisational and operational layers to traverse before they can pull together those nuggets of insight. Getting that data – beyond the mere transactional, functional, base customer level and translating it into something that delivers something valuable to the business- there’s the rub.
Obviously business in general is becoming ever more data savvy, and retail especially so. In a world of near constant attrition, the recognition of your customer and their needs has a huge part to play in successful enterprise. This is, of course, the reason why loyalty cards have become so widespread in the retail landscape over the last fifteen to twenty years. It is a tangible expression of the value exchange in action: creating literal card carrying ambassadors for your brand while giving the brand the ability to better understand their actions and transactions. It has, however, reached a tipping point where loyalty programmes’ ubiquity have undermined their success – when according to McKinsey, the average household has 23 loyalty programme memberships, what does that actually mean for loyalty? So brands should always be on the lookout for ways to include their customers in the brand story, to access that crucial insight; let’s not forget, you don’t necessarily need a loyalty card scheme to encourage loyalty.
The changing relationship of customers with their data was the subject of a report we worked with the Direct Marketing Association to produce. In it, we investigated what incentivises customers to share their data with brands. Beyond financial incentives, which is the most widely recognised way to unlock access to data, the absolute key to what makes people give more information into their worlds is trust, and this is an area where online retailers scored particularly well, rating behind only the NHS, banks and the government in terms of organisations which consumers trust with their personal data.
The numbers of people who believe they have to share their data in order to buy things has increased significantly, to 73% – a fact supported by growth overall in online retail. Comfort levels of sharing personal data with businesses have also grown. However, what has also increased is individual awareness that this data has value, often tangible value, back to an organisation. Many people expect discounts, offers, freebies or other incentives in return for sharing more about themselves, and this is something retailers need to recognise and address. The bar has been set by loyalty cards that, in order to gain insight, you must offer something in return.
What does this mean, then, for online retail? I would say that customer expectation, as evidenced by the research, now dictates that, to gain more insight, you have to offer those customers something back, and more than good service, quality products or speedy delivery. All of these should now be considered the basic tenets of being in business. Businesses, especially retail, cannot afford to fail to know their customers, to recognise them as individuals, and take the time and effort to learn what they want. This relationship is not a distant one. If people are going to give you their information, they want to be treated like people in return, people you know, people who have put their trust in you; trust that needs nurturing to be sustained. And so this trust needs to be reflected in online use of data.
It has to be respected, protected, and replenished so that your understanding of the customer remains current, to honour and respect the relationship; to build the trust. This willingness to entrust retailers with personal information needs to be responded to – not only to look after those shoppers spending their time and money with your brand, but also to look after the future direction of your business. That the DMA research found that over half (57%) of respondents are also likely to share information with an organisation in return for better services and offers should be a call to arms to agile online retailers looking to enhance their offering. The current trend towards personalisation, backed with the technological developments to personalised website landing pages and marketing messages to particular individuals’ needs, should inspire a much more symbiotic and responsive future for shoppers and their retailers alike. Jed Mole is European marketing director at Acxiom