Retailers must get to grips with the ‘deluge’ of data that it is gaining from its customers in order to deliver the personalised results those customers want to see, says a new study.
For while 75% of retailers surveyed for the SAP (UK)-commissioned report say their customers demand a more personalised service, and almost two-thirds (64%) say they are under pressure to innovate and improve their customer retention, more than half said they had more data than they could use. Some 88% of companies of the 100 surveyed said they found it difficult to turn the customer data they get into useful insight that could help with that task of personalisation.
“2012 is the year a lot of retailers are putting a lot of focus on the customer because it’s so important in this economic climate to be able to retain your loyal customers as much as possible,” said Chris Osborne, retail industry principal at SAP UK and Ireland. “Therefore to be able to give them that kind of personalised service and personalised promotions, becomes increasingly important. More than three quarters of the retailers we surveyed said their customers had become more responsive to offers over the past couple of years or so. I guess the reason is that customers have less disposable income so they’re driving a hard bargain by shopping around.”
He said customers were not only demanding cheap prices, but also wanted retailers to recognise them as individuals and support them with their specific requirements.
“To do that effectively comes back to having the right kind of data about your customer and your overall customer population so that you can design your offerings around what customers actually need,” he said.
For retailers the challenge is, according to the report, which examined 100 retailers’ plans for technology investment in the year ahead, to balance profitability – a priority for 76% - with the need to reduce costs that 65% of respondents cited. Seven out of 10 said they were more likely to respond to that by investing in customer-facing technologies rather than back-office work.
Osborne said retailers needed not to choose between front of house and back office functions, but to achieve consistency across their whole business. “Retailers need to get to grips with Big Data now in order to be able to cope with the deluge of data that is available, both on their business and their customers,” he said.
He added: “We all know data is valuable, it’s why we have spent the past ten years working tirelessly to record as much of it as possible. But without using it, it loses us time, money and the ability to provide good customer service.”
More than third (37%) of the retail companies surveyed said customers were becoming increasingly reluctant to provide information. Just under half (49%) said customers’ expected improved services because of the increased availability of data.
“The more you fail to act on data, the more customers are likely to lose interest and look towards your competitors who are providing a more personalised service” said Osborne.