The critical role of customer data in successful retail transformations
By Sarah Friswell, CEO at Red Ant
There’s a lot more to embracing the potential of retail technology than just signing up for new tools and technologies.
Data is hailed as possibly an organisation’s biggest asset in the post-pandemic digital age and retailers must know how to make the most of their increasing data to take advantage of tech investments to build customer sales and loyalty.
Data management and integration is currently retailers’ biggest challenge, according to 25% of retailers surveyed by Red Ant.
And 40% of retailers rank omnichannel strategy as their main priority - they realise they need a retail solution which integrates all customer channels and delivers competitor outperforming CX for the long-term.
What they’re less confident about is how to build robust data foundations for a consistent cross-channel customer experience.
Why customer data is the holy grail
With online shopping and tech-based in-store experiences now the norm, the balance of power within the retail experience has tipped in favour of the customer.
Knowing your customer has never been more important as, according to Salesforce, 88% of customers say the experience a company provides is as important as its product or services.
Retailers must bring all of the benefits of online shopping into the store - access to personal profiles and shopping history, stock checking and inventory management, rich product content, online ordering, fulfilment from other stores and faster payment options – and erase channel silos to deliver, through clienteling, a personalised, profitable customer experience.
An advanced data maturity stance is critical for retailers to bring people, products and business processes together as part of adopting a retail technology ecosystem.
This means integrating data from all business areas, from customer service through to stock management, into one ecosystem to gain a single view of customer activity.
But although 37% of retailers surveyed marked data as a ‘priority’, 39% of retailers lack confidence in the quality of their data, saying it’s adequate but could be improved.
The core types of customer data
Retailers can’t afford to underestimate the importance of their customer data in successful retail transformations.
There are four types of customer data that every retailer should have, which need to be gathered, harmonised, and put to work through the ecosystem:
· Basic or identity data
This is base-level, functional information that forms the foundation of a customer profile, such as their name, contact number, email, social profile and income.
It’s vital for initial identification of the customer, ‘setting the scene’ for assembling further data related to the customer and creating a ‘big picture’.
It’s also useful in building operational efficiencies for order management, payments, and deliveries. This data is captured through online orders, in-store checkout and loyalty programmes or store cards.
· Engagement data
This reveals how a retailer’s customers engage with them across all sales and operational touchpoints, including likes and shares on social posts, loyalty programmes/subscriptions, and email and newsletter sign-ups.
It is critical for measuring promotional and product campaign effectiveness, assessing brand messaging, brand image and testing approaches and new initiatives. It is captured through quantitative social platform analysis, product campaign analysis and qualitative sentiment analysis.
· Behavioural data
This focuses on how customers act during their shopping experience, rather than what they say about themselves, including purchase history (both in-store and online), abandoned baskets, and wishlists.
It’s essential for enabling personalised customer journeys, tailored communications, and ‘saving the sale’ and minimising discarded purchases, which are a major threat to revenue. It’s captured through online orders, customer profiles, and in-store shopping metrics.
· Attitudinal data
This is based on opinions provided first-hand by customers, such as survey responses, online reviews, and unstructured social commentary.
It builds a profile of customer sentiment, assessing brand perception and standing, and it is captured through online and in-store direct to customer research initiatives, reviews analysis, and social activity monitoring.
When this is coupled with operational data including order and inventory management, and product and full catalogue information, it contributes hugely to customer loyalty. Retailers truly understand their customers and can apply data-based intelligence to deliver relevant, superior personalised experiences.
Benefits of a comprehensive data management strategy
Many omnichannel and clienteling solutions are able to offer surface integration of one or two data areas. But only an ecosystem that integrates and uses all of them will enable retailers to be able to deliver on their promises.
CTOs should look for a platform that brings existing, new and third-party systems - such as payment systems, social marketing, and fulfilment - to work seamlessly together for the biggest benefits.
Benefits include rapid and cost-effective delivery of digital transformation projects, by not reinventing the wheel each time and using pre-built applications and integrations wherever possible.
It also enables continuous development on top of the systems that are already in place and built-in analytics to provide continuous insight and data to justify business cases and identify failures and successes. Taking advantage of cloud delivery is key to enabling retailers to become more innovative and responsive.
Having a solid, cross-business foundation for data integration is absolutely vital for retailers to react to change quickly, build personalised relationships and become truly future- and customer-focused.
But retailers must first be ‘data-ready’ to ensure their retail transformation is a success.
