The Retail Marketing Challenge

Transcription

1 TRENDS The Retail Marketing Challenge INTEGRATING CUSTOMER DATA TO IMPROVE CUSTOMER ENGAGEMENT; DRIVING TRAFFIC IN-STORE AND ONLINE 1

2 About SmartFocus The Internet of Everything is the macro-trend of connectedness that s changing the way customers shop. With more than half of online visits and a third of ecommerce transactions now coming from mobile devices, mobile and proximity marketing are more important than ever. At SmartFocus, we have capabilities to provide context-aware marketing for a mobile world. Our technology will help you truly know your customer and engage them with the right message, at the perfect moment, wherever they are in store and online across all of their preferred channels. SmartFocus is the leader and innovator in contextualized and personalized messages. Our platform includes beacon technology that knows when your customer visits a physical store; real-time predictive recommendations generated at the precise moment they open your or visit your site; and powerful insights that use smart analysis of Big Data to effortlessly generate a truly personal experience. For more information, please visit us at: 3

3 Executive summary Retailers have worked hard to adopt systems and incorporate strategies that create positive brand experiences, drive footfall to their stores and bring traffic to their online sites. However, for most retailers, marrying the store experience and the online experience has been a challenge. While these business areas coexist, they are often developed and executed independently of each other, supported by disparate teams and systems. As technology becomes more sophisticated, so do consumers and their expectations. For the online store, consumers expect to find product and store information quickly and easily. They also expect a flawless check-out experience. Today s consumer spends about 1 minute on a web page. Slow load time, confusing navigation, lack of accurate information will drive these visit times down and will result in visitors navigating to other sites that fulfill their needs. Retailers need to create a more seamless retail experience, which can only be achieved through a multichannel approach that addresses each stage of the customer s shopping journey. By identifying and understanding shopper behaviour and preferences, in-store and online, retailers will be better able to satisfy consumer expectations whether in-store or online. Philipp Schindler, vice president for northern and central Europe at Google, told the World Retail Congress in 2010, It s time to stop differentiating between the online and the offline world Your customers don t see it that way everything is integrated. Customers aren t distinguishing between each of your hundreds of retail locations, or between your stores and your e-commerce site 1. He couldn t have been more right. 1 Sam Decker, ClickZ. Make Your Brick-and-Mortar Store More Like Your E-Commerce Site. January 11, RETAIL MARKETING

4 Remembering our digital roots Do you remember what online experiences were like for consumers 5 to 10 years ago? We ve gone from pages that feature many links to driving content through fewer clicks. We have moved from static websites to more interactive and connected online experiences. Finding the right balance of information for the brand and its shoppers has grown out of continuous, data driven testing. With a strong eye on metrics, online marketing teams have worked hard to find the design and site experience that has paved the way to full-service, online stores. During this evolution, there were strong concerns about whether online business would negatively impact the store business or more importantly, impact the profitability of the business as a whole. Even with these fears, it was recognised that the internet is a critical channel that no retailer could afford to ignore. Over the past decade, most retailers have come to the conclusion that creating a compelling online store was a much better option than allowing their competitors to steal consumer traffic, even if it risked cannibalising some of their own in-store traffic. To avoid distraction and disruption to the bricks side of the business, many retailers introduced their online colleagues to the business as a new clicks division that would focus on all things digital. These digital teams would be separately managed and independent from the groups that focused on offline, in-store activity. In most companies, this situation has persisted with the development of whole divisions, complete with operations, IT, finance and marketing teams. With time, experience and new business challenges, this business architecture is now changing and becoming more integrated. 5

5 Coming together as one business As annual US online sales approach $200 billion, the total share of retail sales is steadily increasing from 5% five years ago to 9% presently. Consumers in their 20s and 30s, do approximately one quarter of their shopping online. To attract shoppers of all kinds, retailers need to build a strong online offering, as they improve their instore experience 2. As the pressure of online-only retailers mounts, it becomes more critical for the organizational walls between online and offline to come down. Targets and objectives will shift towards customer growth, regardless of the sales channel. To do this, the business must create a single view of the customer by integrating the internal systems that collect and capture customer data from all the retail touch points: In-Store Purchases Online Call Centres Mobile Applications and Sites Print Media Social Media Marketing When retailers attain a 360 degree perspective of their customers, key actionable insights will be discovered that will lead to better business decisions, brand and customer experiences. For instance, if a business is looking to stimulate consumer spend and increase the lifetime value of their customers, the strategy has to evolve from the basic approach of sending the same online offers to the entire customer database. Consumers expect more from their preferred brands. Analytics or intelligence technologies that integrate customer data will provide retailers with a more complete view of their customers. Inside the customer data, for example, it s possible to find the following pieces of customer information: There is a large segment of customers who only shop in the store when there is a sale. 2 The Economist. Retailers and the internet: Clicks and bricks - Many retailers are being too slow in reinventing themselves for the age of online shopping. February 25, COMING TOGETHER AS ONE BUSINESS

6 More than 60% of customers live within 20 miles of a retail location. Of those customers who live within 20 miles, most prefer 3 of the 6 product lines. Sales in this geographic are an average $50 per customer. 30% of the customer base in this geographic area have not been to a store or made an online purchase in over 6 months. 20% actively shop in-store and online, making an average of 2 purchases a month. With this type of data and knowledge, retailers are able to create a number of targeted and personalized marketing campaigns that engage specific segments of the customer base: Sale only segments where marketing is only sent to customers who purchase during sales. Create in-store and online campaigns that recommend and cross-sell products. Reactivate lapsing customers with an incentive to return and visit you again. It s also a great opportunity to find out why they haven t visited in a while, share a survey or give them an opportunity to provide feedback. However, make sure this feedback is acknowledged. Set up in-store promotions or seasonal events that will help drive footfall to the store. In the past, organisations had to invest significant amounts of budget, time and resource to develop targeted and personalized marketing campaigns. With the evolution of technology, the cost and time required to develop data driven campaigns is significantly reduced. Additionally, customer intelligence technology is moving from a nice to have to essential because the insight is required in order to increase conversion rates and improve customer engagement. In 2012, iconic luxury retailer Burberry, known for their digital adoption, is taking their integrated collection of in-store data to introduce a program called, Customer 360. With customer permission, the company will record their buying history, shopping preferences and fashion phobias into a digital profile that sales staff can access using hand-held tablets. With this information, sales assistants can see what purchases a Brazilian customer last made while on a stopover in New York, and what they last said about Burberry on Twitter or Facebook. Arming staff with valuable customer data enables them to be more engaged and knowledgeable about their clients and provide them with a truly personalized customer experience. 7

7 Smarter marketing starts with marketing intelligence When consumers now interact with businesses, they expect that the information shared will facilitate a more meaningful, relevant and engaging brand experience. If a business chooses not to make use of the information they already have about their customers (name, location, product preferences, sizing, loyalty, etc.), they are missing out on marketing opportunities that can impact the brand and business for years to come. Now more than ever, it s critical that customers not feel like a number even if the reality is that they re part of a database of millions. With databases that can only be accessed by IT staff and developers, marketers and other areas of the retail business are disconnected from the customer data that underpins their business. This disconnect is now being corrected and simultaneously expanding the role of marketing as we know it. When we think of our favourite marketers, we tend to think about wordsmiths, creatives, idea people, advertisers and communicators. They may be analytical, but they have never been analysts. As marketers try to get more engaged with customers, they recognise the universal desire to be data-driven, but many do not feel they have the information they need to make real-time decisions. In a report by Columbia University Business School s Center on Global Brand Leadership and the NYAMA, 29% of marketers report that their marketing departments have, too little or no customer data. Interestingly, 36% report that they have, lots of customer data but, don t know what to do with it, while 39% say, they don t have the resources to turn their data into actionable insight 3. While retail organizations work tirelessly to become more integrated, there are technologies available to marketers that will help to better understand the behaviors and preferences of their customers and prospects. To ensure campaigns are successful, retail marketers must have their customer data at the heart of their campaigns. With marketing intelligence technology, marketers gain a visual representation of their data. Using drag and drop features, they can analyse their data and apply customer insights and segments into their online marketing campaigns. 3 David Rogers Don Sexton, Center on Global Brand Leadership, Columbia Business School and the New York American Marketing Association (NYAMA). Marketing ROI in the Era of Big Data: The 2012 BRITE/NYAMA Marketing in Transition Study SMARTER MARKETING STARTS WITH CUSTOMER INTELLIGENCE

8 SmartFocus s Retail Cheat Sheet DRIVE SUCCESSFUL AND EFFECTIVE DATA-BASED CAMPAIGNS WITH ACCESS TO THE FOLLOWING CUSTOMER DATA BETTER UNDERSTAND BEHAVIOURS AND PREFERENCES TO CREATE MEANINGFUL AND RELEVANT SEGMENTS FOR CAMPAIGNS DEMOGRAPHIC DATA Gender Is your client Male or Female? Campaigns that share gender preferences such as Gift Campaigns For Him, For Her, etc. Identify products that are gender-specific Create newsletter genderspecific campaigns Lifecycle Dates What is the customer s birth date? When did they start subscribing to your brand? What are significant lifecycle dates for the customer? (Wedding, anniversary, birth, reaching certain limit on loyalty points, etc.) Develop campaigns that acknowledge customer lifecycles like their birthday, personal anniversaries or dates related to the business relationship Create age-based segments to target specific demographics or clusters Geographical Where does the customer live? Do you know of other destinations the customer frequents? Deliver geography-based campaigns to help drive traffic to local stores and create awareness around in-store events Share relevant in-store information with specific customers based in geographically desirable areas 10 SMARTFOCUS S RETAIL CHEAT SHEET

9 PURCHASE BEHAVIOUR Purchase Date What customers are buying? Are purchases online, in store or both? Use purchase history and behavior to create campaigns that will stimulate spend, promote the re-order of products, cross sell and up sell of other products that fit customer profiles. Total Purchase Value When did the customer make a purchase? How frequently do they make a purchase? Do they only purchase during specific times of year? Establish re-activation campaigns for customers who have not made a purchase in the past days Product Line How much do customers spend? How frequently do they make a purchase? Recognise VIP top spenders for loyalty programs Targeting customers who purchase during sales Online Interaction Do customers purchase specific product lines? Do they reorder the same products? Do you collect information about product preference Create campaigns that promote popular products Share promotional campaigns Develop customer segments based on buying habits Develop campaigns that introduce customers to new products or services Season / Timeframe How do clients browse products? Do they abandon baskets? Do they participate in social referral? Create campaigns to re-engage customers, provide recommendations, thank them for positive reviews, and contact them if they have had a negative experience Do your customers buy your products during a specific time of year? Do they purchase during sales only or at any time? Develop Seasonal promotions Create Trigger campaigns based on time of year customers purchase Distribute holiday campaigns Target customers with daily specials on their preferred day 11

10 Leveraging marketing intelligence across all online retail channels is one of the most powerful ways for marketers to deliver truly relevant, personalized and timely campaigns for cross sell, up sell, reactivation and retention to customers. Sending the right message to the right customer at the right time, increases response rates and conversion rates, but can also maximize brand impact and ROI in-store and online. The relevance of the content be it web, , mobile, social or in-store is determined by the single customer view, the transactions both offline and online driving the content of marketing campaigns. By understanding the preferences and behaviors of your customers, marketers can begin using data proactively to develop personalized campaigns that drive sales and guide customers through their purchase decisions; creating one whole customer experience. Imagine, for example, a fashion retailer using social data to make timely purchase recommendations. Perhaps suggesting formal wear in marketing when a customer tweets about a business meeting or promoting evening wear on the homepage of a mobile app after accepting a Facebook event to a party. The customer s shopping experience becomes a more seamless affair. 4 PwC/Kantar Retail. Retailing 2020: Winning in a polarized world RETAIL MARKETING

11 A report by Price Waterhouse Cooper and Kantar Retail acknowledges that communicating in a personalized and contextualised way will change the nature of the retailer. No longer are they just sellers, but experts in their field be it about their products or their customers. Retailers will always have the signage and service to present, but if they don t apply what they know about their customer, they may lose the opportunity to build loyalty, something no retailer can afford to lose. Marketing intelligence is critical as it enables retailers to know a great amount about their shoppers, with insights that go well beyond their transactional behavior 4. 13

12 Conclusion As retail brands integrate across all business channels from the store to online and all points in between, retailers have the opportunity to create more holistic marketing campaigns, driven by the data you have about your shoppers, that promote the products and product lines your customer s love in store and online, the events and stores that are geographically desirable, sales they can participate in, and extras that continue to keep them connected and loyal to the retail brand. Today, we re seeing a new generation of software and services that are dedicated to helping businesses understand this data. Why? Good data analysts are in high demand. McKinsey estimates 5 that the US will have a shortfall of 140, ,000 data analysts over the next few years and of equal importance, a shortage of 1.5 million people with the business skills needed to make decisions on the data. Simply analyzing this multidimensional and complicated data is not enough. It has to be actionable through the development of new business processes, rapid innovation and near real-time change. SmartFocus s marketing intelligence technology bridges the gap that exists between marketers and their data; supporting the overarching strategies that places customer needs, preferences and lives at the centre of a business. Customers are no longer just shoppers who buy a product from a business. They can also be loyal fans who engage with your product, content and company; interested stakeholders who become heavily involved with your brand; enthusiastic advocates who spread your gospel and encourage others to join. Retailers have the opportunity to capture, analyse and act upon connected data from multiple sources to create a single view of the customer. Taking this step is important to secure the increase in marketing budget that enables better customer focused marketing. Connecting these interactions to the marketing plan will be the key to success for nextgeneration retailers. 5 James Manyika, Michael Chui, Brad Brown, Jacques Bughin, Richard Dobbs, Charles Roxburgh, Angela Hung Byers at McKinsey Global Institute. Big data: The next frontier for innovation, competition, and productivity. May for_innovation 14 RETAIL MARKETING

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