The technology already exists to track customers both on – and offline and follow their individual customer journeys – but many retailers currently lack both the relevant technology and the necessary analytical skills. Penelope Ody asks whether it’s time for a major reassessment of IT capabilities.
ASK customers about the shopping channels they use and the chances are they may mention QVC, Ideal World or perhaps The Jewellery Channel – although they could just as easily tell you that they don’t watch any of them. Ask them where they shop and the answer could be on the phone, online or at the local high street. For most customers the concept of moving between channels or making a “customer journey” is probably quite meaningless: they shop with a particular retail brand and the methods they use to do so are immaterial.
“As we move to the internet of things you can’t really consider ways of reaching the customer as through ‘channels’ anymore,” says Andrew Fowkes, Head of Retail Centre of Excellence at SAS UK and Ireland. “We’re really talking about methods of communication, and that means having the same information and offers everywhere.”
It also means being able to keep up with the progress and changes of a myriad of customer journeys so that if a customer “likes” an item on Facebook or Instagram, then not only does the marketing team send her a promotional offer for that line via e-mail, but as she walks passed the local stockist her phone flashes up a message that it is available now, and the sales assistant knows precisely what she is looking for as soon as she enters the shop.
All very farfetched? Possibly. But it is where big data analytics are headed and much of the necessary technology is already in place. “Retailers must have a central hub of data,” says Fowkes, “and regard however many channels a customer uses as a single experience.”
Online log-ins make it easy to track shoppers but even without personal log-in it is possible to follow activity via an IP address. The same applies in-store, too, as Ankush Mattu, Partner with consultants Kurt Salmon explains: “People tend to leave the wi-fi on...
"When it comes to analytical capability most retailers are probably about 20 years behind Amazon."
their phones switched on and in the US we’re starting to see retailers use this to create a digital signature of the shopper. Combine that with video and they can monitor where the shopper travels to and what they look at; add the transaction data from point-of-sale when they buy and you start to get more information about the journey.”
That information is also no longer purely numeric data. Glassbox Digital, for example, captures a customer’s online activity in near real-time so that if a shopper then calls the customer service desk or heads into a local store staff can immediately see what the shopper has looked at, any problems that occurred, or what items have been bought. “It is an open system,” says Audelia Boker, VP Marketing, “so it can integrate with other big data for analytics down to an individual level.”
Currently most users are in the financial sector so keep data for several years, although Boker suggests that retailers would want to store information for rather less time: “As well as resolving disputes and supporting customer service agents, being able to monitor just how a customer travels through your site can help understand the customer journey and increase stickiness,” she says.
John Trowell, Customer Engagement Solutions Manager at IBM, talks of CJA – customer journey analytics – which is all about visualising and analysing the paths customers take, over time and across channels. “It can bring together not only your own data about a customer,” he says, “but also information from third parties, such as social media or the adverts they click through to.” Last autumn IBM launched its “universal business exchange” (UBX) which operates on a “publish and subscribe” basis so that retailers can augment their own information about a shopper with additional data feeds to better identify and respond to customer needs.
Ultimately, as long as an individual customer can be identified, then such records could be used to build up a more detailed picture of their preferences or lifestyle to improve clienteling or guide store staff. In the US, men’s wear chain True Religion, is equipping store staff with Apple watches which give a haptic response when iBeacons within the store identify the presence of loyalty card members who have downloaded the company’s app. The watches also provide product imagery of a shopper’s past purchases and customers who opt-in can have their social media profile integrated as well. According to John Hazen, Senior VP, Direct to Consumer and Omnichannel at True Religion: “For store associates to be notified via haptic touch on the watch that a customer has entered the store and then be provided with their purchase history in a visual manner is the ‘Holy Grail’ of insight and personalisation.”
At JDA, Anand Medepalli, VP Solutions Strategy, talks of a “leapfrog” in technical capability: “With an app on your phone, the retailer can not only know when you are in the store but can track what you look at, where you go in the store and – with RFID – what you take into the changing room.” JDA is already working with Intel on such developments and expects that these systems could be available and implemented within a year.
also provide product imagery of a shopper’s past purchases and customers who opt-in can have their social media profile integrated as well. According to John Hazen, Senior VP, Direct to Consumer and Omnichannel at True Religion: “For store associates to be notified via haptic touch on the watch that a customer has entered the store and then be provided with their purchase history in a visual manner is the ‘Holy Grail’ of insight and personalisation.”
At JDA, Anand Medepalli, VP Solutions Strategy, talks of a “leapfrog” in technical capability: “With an app on your phone, the retailer can not only know when you are in the store but can track what you look at, where you go in the store and – with RFID – what you take into the changing room.” JDA is already working with Intel on such developments and expects that these systems could be available and implemented within a year.SHARING
While some may baulk at such intimate tracking, the “millennials” – the 18 to 35 age group – are increasingly willing to share personal data with retailers in exchange for better targeted promotions or service advantages. The old concept of loyalty card schemes offering points-for-prizes is long gone, instead schemes, and their rewards, are based on mobile apps. “Apps provide a great opportunity for retailers,” says Jamie Merrick, Head of Industry Insights at Demandware “they should all have them, and allow you to track shopper’s behaviour and monitor where they go in your store.” In return schemes offer information rather than rewards – such as House of Fraser’s, which gives online access to current stock levels or Ocado’s, which offers dietary and nutritional information.
While modern technology is capable of tracking shoppers both on- and off-line and big data analytics can deliver an amazing array of insights in record time, very few retailers have the wherewithal to use either. “All IT bought before 2015 will need to be replaced by 2020,” suggests Andrew Fowkes, “as none of it can deliver the required customer centricity. Customer data isn’t just for the marketing department, it has to be available to everyone in the business. Many retailers don’t even have good stock visibility yet and their ‘big data’ tends to be transactional or purchasing behaviour to which they will need to add unstructured data from customer service centres, tweets and so on.”
Mattu similarly stresses retailing’s IT shortfalls: “They’re not exploiting the data that they do have and they often lack the analytical skills to use their information to its fullest extent. Certainly, retailers spend money on IT – but it is usually the wrong sort of IT: money spent on old technology or an IT team preoccupied with maintaining ancient AS400s. When it comes to analytical capability most retailers are probably about 20 years behind Amazon.”
While some major retailers – notably John Lewis – have bitten the bullet and embarked on major IT replacement programmes, Mattu argues that thanks to cloud-based technologies and software-as-a-service (SaaS) much new technology can be implemented from the operational budget rather than capital investment. Data analysis can also be outsourced as skilled data scientists are both rare and expensive.
Medepalli agrees: “Retailers must invest in data scientists whether that is in-house or outsourced and we’re already working with retailers using cloud technology plus our machine-learning algorithms and analysts to deliver big data insights. Data is the new oil – and it is essential. CIOs should start living up to their title and focus on information not technology.”
With the “Internet of things” set to provide many more ways for customers to interact then those data scientists are also going to have much more to analyse than just shopper’s activity in store, mobile, social or online.