ITS GETTING PERSONAL
CUSTOMERS EXPECT MORE AND MORE RELEVANCE WHEN THEY SHOP ONLINE, AND PLATFORM VENDORS ARE ENGAGED IN A RACE TO KEEP UP THROUGH PERSONALISATION AND MORE, WRITES CHRISTIAN ANNESLEY
Not so many years ago retailers’ IT systems were mostly there to serve the companies’ own ends: reconciliation and reordering of stock, accounting systems and so on. But in 2013, with cross-channel retailing in full swing, it is the customer that has moved centre stage in the race to deliver functional, ecommerce-ready platforms that integrate the back end while also enabling a seamless, nuanced customer experience across myriad channels and devices.
So how are platforms helping to evolve customer engagement right now – and where might things head from here?
Frank Lord, vice president for EMEA Oracle Retail, says the challenge for retailers today is to strike the right balance between “operational efficiency and delivering personalised customer experiences” that foster loyalty and optimise sales.
It’s personalisation that stands out in that description, offering as it does potentially huge opportunities for those retailers that can engineer businesses not only to identify the most profitable and accurate recommendations, but also to close the sales loop and fulfil customer demand.
The opportunity arising from personalisation is one that plenty are trying to understand – with some of the latest survey stats illustrating the context. Oracle’s Evolution of Experience Retail research, for example, recently found that in the UK nearly half (49 per cent) of consumers rate personalisation as important, here defining it primarily as “receiving offers/discounts based on preferences” – whether in store or not in store.
That’s one among many potential definitions of personalisation, of course, and it’s worth sounding a note of warning here.
MARKETING MESSAGE OVERLOAD
When done effectively, personalisation in all its forms can be extremely powerful, but other research – specifically an Economist Intelligence Unit survey for Lyris – also flags up a potential problem: an eye-watering 70 per cent of consumers say they find personalised messages annoying when the “attempts at personalisation are superficial” and some 63 per cent claim they receive so many personalised messages that they no longer mean anything to them.
One challenge, then, for retailers is to look at how to move beyond simple personalisation communications, and towards other forms of engagement and community-building, including socially driven moves such as reviews and recommendations (preferably unmoderated for ‘authenticity’) or by developing customised offers, which consumers usually accept more readily to find the best deals – even if the data mining that’s needed to do this sometimes raises privacy issues.
That’s not to say that personalisation isn’t working for some retailers. Consider Emailvision, which supports more than 600,000 campaigns each month from more than 3,000 clients – and says it often succeeds in delivering better customer engagement through effective personalisation and targeting of email campaigns. When Office Shoes used the technology to aid better targeting of its email marketing campaigns, open and click-through rates went up by 64 per cent and 240 per cent respectively compared with untargeted campaigns, while the jewellers Astley Clarke used behavioural technology to personalise individual shopper experiences – and boosted conversion rates by 60 per cent.
A SINGLE ONLINE IDENTITY
If those are two of the latest examples of email personalisation working, an altogether different way of looking at the question of personalisation is to try to understand where things are headed. According to Steve Rothwell, chief executive of the mobile couponing specialist Eagle Eye, one logical conclusion of the personalisation race is that very soon each individual consumer will have established a single identity online that will enable them to enact payments and promotions and coupons, as well as seeing some of their personal preferences and choices attach to this online identity too.
Eagle Eye’s pitch is that it acts as a repository of the data that’s now circulating through mobile devices, enabling retailers to evolve what they do with few integration or fraud concerns, and using just the existing credit card terminals and EPoS technologies.
“With our system the customer is sent a unique PIN code to their mobile and enters it into the card terminal in-store,” says Rothwell. “Our system immediately authenticates the code and the value of the mobile coupon or gift voucher is deducted from the transaction. It’s simple and convenient for the customer to use, for the retailer there is complete security and better intelligence for reporting and CRM purposes – and the infrastructure itself has applications well beyond vouchers and couponing.”
Tesco Clubcard has been using Eagle Eye since late last year to take its rewards service digital. Seven of Tesco’s retail partners – including Pizza Express and Café Rouge – have now signed up to offer digital rewards, driven by the initial
results which showed 96 per cent of consumers opting to receive their offers digitally rather than as physical vouchers.
Platforms such as this also point to a future where interoperability between platforms is such that platform integration itself eventually becomes a non-issue for retailers. There’s a way to go, clearly, but that’s the vision. Quite how long it will take to get there remains to be seen – and in the meantime many suppliers of today’s ecommerce platforms are still busy embedding extra functionality rather than looking to optimise interoperability.
HOW TO ENGAGE – AND SELL – ONLINE
One notable development of ecommerce platforms lies in the use of real-time support for customers on websites, whether through online live-chat or voice support from a customer representative. One such real-time engagement service is from LivePerson, which currently integrates with well-used ecommerce platforms from Hybris and DemandWare as well as being offered as a stand-alone proposition for retailers to integrate themselves with their particular platform.
LivePerson has been particularly successful in its work with BT to convert would-be customers into new business: it says its support helps to deliver 23 per cent of BT Retail sales by engaging with users who are confused by pricing, struggling to navigate to particular offers or who don’t fully understand new product launches.
The service works by applying a set of rules that identify – in real time – potential new customers that are experiencing difficulty during the order journey. Invitations to chat live with product specialists are offered to those visitors who show signs of needing help when they are reviewing the marketing and pre-sales pages of the website or placing an order. And, before engaging, LivePerson enables the sales advisers to understand what customers are looking for as well as helping them relay an appropriate solution once they have made contact.
“Many of us have questions that need answering when making a decision about an online purchase – particularly a complex or high-value one,” says Tony Heyworth, LivePerson’s international marketing director. “The idea is to cut the abandonment rates by giving visitors the information they need quickly and efficiently, but interacting in just the right way.”
What’s critical here, says Heyworth, is that site visitors get intelligent, informed engagement at just the right time.“If you are in store you don’t want help from a sales assistant all the time, do you? Sometimes you’ll have some questions and it’s then that you want them to be on hand. That’s actually a process that’s easier to manage online, because a visitor’s interactions with a website tell us a lot that a sales person could not necessarily know in store.”
It’s a multifaceted offer, with the live-chat option sometimes leading to a voice call and even video support – both through a customer agent finding a relevant video to play to help a visitor or, sometimes, through a face-to-face video call. If it sounds a sophisticated proposition for larger corporates with high-value sales to secure, that’s not the whole story either. The high-value side of the equation usually applies, to make the service worth the investment, but even a medium-sized travel company like Exodus is making use of the system, to convert a higher proportion of the two million visitors to its site into buyers of what is a premium product.
“The logical conclusion of where things are headed is that the consumer will have one identity online for coupons and to enact payments and other promotions. A flexible architecture is what’s needed, and the winners on this journey will enable that flexibility while keeping up with the challenges around security and the risk of fraud.”
Steve Rothwell, chief executive, Eagle Eye
“For retailers with more complex offerings in particular, the need to offer real-time assistance to a consumer on a website increases. We all have questions when we are engaged on ecommerce websites and a service like LivePerson, which analyses the behaviour of visitors in real times and works out when and how to interact, is an important extra ingredient for many sites – and a conversion tool.”
Tony Heyworth, international marketing director, LivePerson
The customer in charge
“The major evolution over the past year is that retailers are working to ensure they provide their customers with a connected interaction throughout the shopping experience. This more than likely will involve multiple touch points and interactions across multiple channels. Retailers now clearly understand that the consumer is firmly in charge, demanding ‘commerce anywhere’. The online space has to become totally interoperable as part of the connected retail experience.”
Frank Lord, vice president for EMEA, Oracle Retail
In 2013 personalisation and tailored support is moving centre stage, whether through personalised email campaigns, personalised content for site visitors and registered users, or the increasing use of live-chat and intelligent support for targeted customers. The infrastructure is changing too, with ecommerce platforms adding functionality and dedicated new platforms joining up the ecommerce ecosystem. Retailers are also becoming more socially driven, engaging with customers through social networks and increasing use of customer reviews.
CUSTOMER ENGAGEMENT BY INDUSTRY
AUTOMOTIVE The auto industry is focused on expanding its customer base through customised promotions. Deep analysis of consumer data (analytics target consumer segments rather than individuals) now tops the list of marketing strategies, up from 13 per cent five years ago to 30 per cent today (above the all-industry retail average of 23 per cent).
BANKING The banking industry is working to regain trust. Customer retention is cited as the top marketing goal by 42 per cent of executives, a jump from 23 per cent five years ago (and much higher than the all-industry average of 28 per cent). Banks have moved to personalise outreach to consumers, but they lag behind other industries in presenting consumers with individualised offers and promotions.
CLOTHING The clothing industry still uses offline channels extensively and has been slow to adopt online channels. Clothing buyers are not intensive users of company online channels for any particular part of the purchase decision process, although they are relatively dependent on peer reviews. Three-quarters (75 per cent) of consumers say pricing/promotions are what they want most from company channels, above the all-industry average of 67 per cent.
ENTERTAIMENT The entertainment industry emphasises retaining current customers and tailoring messages to geographical and consumer segments. The focus has shifted from personalisation more generally towards individualised offerings. Deep analysis of consumer data to target offers is deemed important by 27 per cent of executives (four points above the all-industry average), up from 19 per cent five years ago.
MEDIA The media industry — under siege from online competition — has entering new markets as its top objective, cited by 45 per cent of executives, up nine points from five years ago. The industry assigns more importance than the others to developing deeper consumer insights. The media industry also leads in the importance attributed to online channels for building brand awareness and places more emphasis on increasing sales, building customer loyalty, differentiating products and cultivating influencers. The media industry spends a big slice of marketing budgets on email (33 per cent using more than a quarter of their budget vs. an all-industry average of 28 per cent).
TRAVEL The travel industry has been seriously challenged by disruptive technologies as more and more travel providers deal directly with customers and as services have become commoditised. Greater emphasis is now placed on collecting and analysing data for individual customers. The industry leads in the use of data for guiding product research.
Source: Mind the Marketing Gap, The Economist Intelligence Unit sponsored by Lyris.