It’s All About The Customer Experience.
With the advent of the digital age, today’s retail shoppers are informed, instrumented, interconnected and now in control of the path to purchase. Due to this, marketers around the world are trying to figure out the right strategies, marketing mix and approaches for the omnichannel shopper – a shopper that is extremely knowledgeable, hyper-connected and shops at-home, in-store and on-the-go. The omnichannel shopper is demanding a seamless and more personal experience. Marketers need to adapt and find ways to effectively engage with their shoppers at every possible touchpoint. Making this a priority can pay off big for retailers. According to a Bain & Company survey, an average company loses 20% to 40% of customers every year. Reducing attrition by 5% can improve bottom line profits by 25% to 85%. Also, increasing loyalty by 1% reduces costs by 10%.
Leading CMOs recently shared their expertise and real-world examples in an industry research report – “The CMO Guide to Omnichannel Personalization”. The report provides marketers with actionable insights, critical enablers and advice for how to succeed with omnichannel shoppers in this new retail environment. The guide is based on the exclusive insights and extensive know-how of top retail marketers including: GameStop, Godiva, The Home Depot, Jamba Juice, JCrew, Michaels, OfficeMax, Petco, Quiznos, Roundy’s Supermarkets, Saks Fifth Avenue and Sears/Kmart.
Linking Theory And Practice
At the most basic level, omnichannel personalization is an evolving practice, effectively engaging customers across all touchpoints through relevant interactions that uphold a consistent brand identity, but are tailored to meet customers’ unique preferences.
Success in omnichannel personalization means that marketing must revolve around customer engagement. A one-way monologue from retailer to customer is no longer sufficient; only a two-way dialogue will enable retailers to truly understand the shopper and obtain the knowledge of what really matters to them.
Techniques vary and are highly creative. For example, the CMO Guide reveals that Quiznos, a franchised fast-food restaurant with locations globally, engages their customer at all touchpoints in the decision path to create a real-time customer recognition program that leverages both customer and in-store engagement devices.
Michaels Stores, one of the largest specialty retailers of arts, crafts, framing, floral, wall decor and scrapbooking, believes a key benefit of online targeting vs. the paper circular is the ability to adjust messages and customer offers minute-by-minute, not just weekly.
Michaels is using heat maps, a measurement tool that uses content statistics and analysis of online messaging, to help the company determine which email campaigns are the most effective and with whom.
Managing Big Data
The key to successful omnichannel personalization is finding a way to capture relevant and actionable data, and being able to sift through noise to create critical 360° customer profiles. The management of data also requires a true partnership between the CMO and the CIO; the interdepency between these roles will continue to evolve. High quality data provides comprehensive customer profiles, from which an optimized and personalized customer experience can be created and executed at every interaction both in and out of stores.
It’s All About The Customer Experience
The customer experience is the cumulative impact of all interactions that an individual has with a business, its products or services. Marketers must never forget that unhappy customers are more “powerful” than happy ones, because they are much more likely to tell others about bad experiences than happy customers are to share a good one. Omnichannel personalization is about finding ways to create, retain and amplify happy customers. The CMO Guide showcases companies like Amazon, Burberry and Maverik, all exceedingly shopper-centric companies. The CMO Guide also shines the spotlight on Petco. Petco is giving customers outlets for their passion through social media, which not only enhances the customer experience, but provides a sense of connectivity with the Petco community.
Further important takeaways from this research include:
Obtaining Actionable Insights From Data: Disparate signals are emerging from the marketplace. A retailer’s data needs to be aggregated and analyzed to understand the market, including segments within it and the what, when and where surrounding shopper needs. The results of the analysis then must be systematically operationalized.
Adopting Shopper-Centric Strategies: Once retailers have defined their target market and market segments, they need to align their strategies to effectively serve those customer segments. The key is putting the customer ahead of products and solutions ahead of functional silos.
Becoming Increasingly Shopper-Centric: The organization must move from a “product-centric” to a more “shopper-centric” approach. This entails not just providing new metrics, but internal adoption and alignment.
Breaking Down Organizational Silos: Operational issues will emerge. Implementing omnichannel personalization means breaking down existing organizational silos and working together in new and more productive ways. For example, obtaining CEO sponsorship and then creating a position that sits above Merchandising, Marketing, Operations and IT with responsibility for the shopper experience is an organizational change that could help break down silos and improve the overall customer experience.
Staying Abreast Of New Technologies And Adapting: Keeping up with emerging technologies and maintaining the optimum skill sets on board is challenging, but vital for success. This means ensuring the retail organization is flexible and responsive to new technologies. Examples include:
- Customer Segmentation: A more advanced way to segment is customer hyper-segmentation, or micro segmentation, which groups small numbers of customers into extremely precise groupings, based on various factors, including predictions. Retailers can then direct specific marketing actions to each micro-segment to maximize the effectiveness of every contact with each customer. By tracking and carefully analyzing how different marketing actions affect the spending behavior of different micro-segments, it’s possible to predict the varying effectiveness of different marketing actions on different micro-segments.
- Optimization Technology: There is now optimization technology available with optimization engines, which provide optimal engagement (an offer, an invite, a newsletter, an event, a game etc.) with a customer based on their personal preferences and behavior (product, channel, vehicle, frequency). These preferences come from the data collected, measured and appended to the individual customer profile, then blended with marketing strategies, analytical insights and custom business rules to achieve performance objectives. Sophisticated engines seamlessly integrate data and analytics to simulate optimal scenarios and create forecasts to benchmark results. When a shopper takes an action, evaluating these actions becomes a critical input to the master data file at the individual customer level, which then becomes key inputs to the driver analytics and the cycle repeats and tunes itself.
Develop A Road Map: The road map should cover a minimum of two years and include detailed milestones for digital, social, mobile and in-store engagement. The road map should leave room for flexibility so a retail organization does not miss emerging opportunities. Being nimble is critical for success.
Whether a retailer is purely bricks and mortar or is a true omnichannel player, it must adapt to a new set of rules. It is not the retailer that is omnichannel – it is the shopper, and it is up to the marketer to create the ultimate customer experience.