Online retailers today are facing unprecedented challenges and opportunities.
To start, today’s consumers are more tech-savvy and less brand loyal than previous generations. Millennials and Generation Z have serious spending power, and retailers can’t afford to ignore the needs of these empowered, demanding consumers. The most successful retailers know that delivering a great customer experience is paramount – often more important than products, services, or even price.
COVID-19 is a force multiplier of these trends, accelerating the shift toward global ecommerce and placing renewed emphasis on the customer’s digital experience. As consumers, we’re ordering everything online from our dinner to our toiletries, relying on delivery services now more than ever. Ecommerce is booming and many retailers are taking steps to address consumers’ changing shopping habits amid this unprecedented demand. Tesco, for example, is leveraging artificial intelligence (AI) technology to implement a gig-style way of working to optimise its scheduling and ensure there are enough delivery drivers to meet demand. Other retailers are following suit, reimagining everything from their delivery infrastructure to their customer journeys and digital touchpoints.
However, this rapid shift to online services is easier said than done. In the absence of face-to-face interactions, companies must rely on digital data to create a consolidated view of the customer in order to personalise the experience. AI and machine learning solutions can help, but many companies don’t have the infrastructure in place to reap the benefits of these tools. Additionally, as retailers collect more data from consumers to make the new shopping experience a seamless one, they need to maintain customer trust.
Retailers looking to make smart use of data to connect with their customers and build strong, trusting relationships should consider the following best practices.
1. Leverage AI to identify customer buying patterns
In this new era of customer engagement, retailers need to be able to create one consolidated view of the customer. It is no longer enough to simply look at a customer’s transaction history; often people look at products but don’t buy them. The use of AI, along with transactional information, can help retailers map information about the customer more effectively, and more accurately identify the behavioural patterns of that individual.
For example, if a customer always buys posters from a particular sports team, the winning retailers will create an offer for game tickets or other related merchandise. This type of intuitive offer creates a “surprise and delight” moment for the customer and helps build brand loyalty. Every click, swipe and chat is a chance to learn more about what customers are looking for and what they want. By unleashing these insights, retailers can deliver authentic experiences that create greater value and relationships that last.
2. Simplify infrastructure to improve data quality and integrity
In order to become a truly data-driven company, retailers need to simplify their infrastructure by adopting modern technologies. Many organisations have rushed to the cloud, a piecemeal approach that results in legacy apps and data all over the place. Without the ability to bring all of that data back together, organisations suffer from cloud sprawl. This legacy weight impacts both the quality of the data and the ability to form useful insights from it, negatively impacting the customer experience. For example, if a retailer incorrectly identifies the age of a customer, that customer may be shown age-inappropriate offers which is not the best way to build brand loyalty.
Increasingly, retailers are investing in and implementing enterprise integration platforms that connect seamlessly with various data sources and applications. These centralised hubs not only drive data standardisation and accuracy, they also allow organisations to experiment and scale quickly, which is critical for meeting the current spike in demand for online services.
3. Build an enterprise-wide data governance programme to cement trust
One of the best ways for retailers to demonstrate that they are being responsible custodians of customer data is to have a cohesive data governance strategy in place. Many organisations consider customer data to be “theirs.” This mindset is not only false, it’s bad for business. The data belongs to the customers, and today’s digitally aware consumers are increasingly demanding more ethical behavior from suppliers when it comes to data privacy.
A data governance model that inspires trust has three key qualities: it captures quality data; it is consistent in definitions and terminology; and it protects against unauthorised access to data whilst governing appropriate uses. There is much room for nuance in how such a model is implemented, but these are the fundamentals.
The ability to make decisions based on quality data is transformative. Data and analytics are critical to successfully navigating rapidly changing consumer expectations and succeeding with digital transformation. Leading retailers are reimagining their digital strategy to focus on compelling online experiences and brand loyalty, setting themselves up for success in the COVID-19 era and beyond.