Improving The Retail Experience Through Fast Data

Transcription

1 A Forrester Consulting Thought Leadership Paper Commissioned By TIBCO Software February 2016 Improving The Retail Experience Through Fast Data Overview Customers expect better-individualized experiences and services than ever before from the companies that serve them. To meet these expectations, companies must craft situational and intelligent customer interactions that are tailored to customers purchase history, past actions, preferences, and physical attributes. This requires fast, seamless melding of insights from realtime and historical data. While companies are capturing customer experience data in real time through digital touchpoints, they find that inefficiencies in integration, real-time event processing, and advanced analytics inhibit relevant in-moment experiences. Companies that become data agile win out, as they are better able to take advantage of the vast amount of data at their fingertips and ultimately create a customer experience that drives revenue. In October 2015, TIBCO Software commissioned Forrester Consulting to explore how fast data business models (i.e., increased information access, insights, and business agility) have an impact on customers, processes, and offerings. This paper specifically highlights the findings of that study from the retail industry. Forrester examined the hypothesis that improved integration, event processing, and analytics will improve operational efficiencies such as inventory optimization, while enabling a better customer experience. The study found that retailers are looking for how to more effectively use customer data to provide shoppers with a more individualized, omnichannel experience.

2 2 Retailers Want To Deliver An Individualized, Omnichannel Shopper Experience Retailers are doing all they can to win, serve, and retain customers in a hypercompetitive market landscape. Retail organizations recognize that this requires access to real-time data, analysis to recognize critical events, and identification of the appropriate action. When we asked retailers about the reasons that they were improving data processing speeds, our survey uncovered the following top priorities: Individualizing the shopping experience. Customers expect a shopping experience that reflects their purchase history, past actions, preferences, and physical attributes, making personalization a top priority for retailers. To offer customers a personalized experience, retailers will key in on specific aspects where access to real-time information, event processing, and analytics can personalize the instore shopping experience, as well as track customers and behaviors through their digital channels. Providing consistent, omnichannel experiences from discovery to fulfillment. Efforts to establish the right analytics processes will enable retailers to deliver an individualized experience and extend that experience consistently across all channels. Benefits from a connected, consistent, omnichannel view of the customer will trickle down to other aspects of the business, including another top priority: order processing and fulfillment. As retailers look to execute on individualized, consistent omnichannel customer experiences through agile and efficient data-centric processes, they anticipate realizing these top benefits (see Figure 1): Improved customer satisfaction and loyalty. By leveraging agile data processes and analytics, retailers will better understand customers in their journey, anticipate customers needs, resolve their issues quickly and effectively, and encourage repeat business. Improved new customer acquisition. Improving analytic processes related to the customer experience will help retailers capture new customers and retain existing ones. Retailers that understand their customers can anticipate their needs and introduce relevant and attractive offers. By providing a more individualized experience across all the channels their customers use, retailers can make a FIGURE 1 Business Agility Is Aimed To Improve Customer Experience And Acquisition What are the top business outcomes you hope to achieve through improved efficiency of data-centric processes and business agility? (Select up to three) Improved customer satisfaction Higher customer retention/loyalty Improve brand loyalty Increased new customer acquisition Base: 100 retail decision-makers responsible for technology surrounding inventory management and/or customer experience (top four responses shown) 37% Source: A commissioned study conducted by Forrester Consulting on behalf of TIBCO Software, October 2015 positive first impression and turn a skeptical window shopper into a converted customer. RETAIL AGILITY REQUIRES IMPROVED EVENT PROCESSING AND ANALYTICS 48% 47% 52% In order to achieve goals for individualized, omnichannel experiences powered by fast data, retailers are looking to new and improved processes and tools. When we asked survey respondents which new tools they plan to implement going forward, predictive analytics and complex event processing (CEP) topped the list (see Figure 2). These findings highlight two important trends showcasing the importance of improved event processing and analytics: Retailers will capitalize on insights with CEP. As in-themoment data types become available, especially through mobile moments, opportunities for contextual, real-time events and offerings present themselves. Companies investing in CEP solutions will be able to recognize meaningful events and respond accordingly and relevantly. Predictive analytics will unlock dynamic, individualized experiences. Big data, analytics, and event processing sit at the core of predictive analytics. Retailers leveraging these advanced techniques can anticipate customer behavior and event outcomes to unlock highly individualized offers that ultimately lead to greater customer experiences and satisfaction.

3 3 FIGURE 2 Event Processing And Analytics Are Key To Improving Business Agility What are your company s plans to implement processes or tools for improving efficiency of data-centric processes and business agility? Data quality and governance tools 30% New data channels/inputs (e.g., sensors) 28% Partnering with third-party systems integrator 26% Partnering with a cloud storage provider 23% Integration Complex event processing (CEP)/streams 37% Hardware upgrade (e.g., switching to in-memory processing) 32% Partnering with third-party eventing-solution vendor 32% Purchase new analytics platform 30% Event processing Predictive analytics (personalization) 42% Business intelligence (BI) self service 34% Data visualization tools and dashboards 32% Hiring data experts/analysts 31% Improved data exploration tools 30% Analytics/ BPM Base: 100 retail decision-makers responsible for technology surrounding inventory management and/or customer experience Source: A commissioned study conducted by Forrester Consulting on behalf of TIBCO Software, October 2015 Integration Issues And Complex Processes Impede Business Agility Despite current goals to become more agile and responsive through improved data processes, retailers are faced with a number of challenges with integration and real-time processing. We asked survey respondents to indicate where they are seeing the greatest challenges with data agility, and four key areas stood out: Integration across data silos. According to survey respondents, data is often siloed in separate systems across various departments, resulting in challenges with ominchannel visibility of the customer. For a complete customer view, these silos need to merge historical data with real-time data to provide a full picture of the customer. Turning real-time data into actionable events and engagement. The inability to merge historical customer data with in-the-moment contextual data hampers companies ability to anticipate events and act on them (using predictive analytics). Throughout the shopping experience, there are moments where historical and contextual data could be merged to deliver a uniquely relevant moment, yet an inability to integrate data and act on insights in real time results in these opportunities being lost. Complex processes with many stakeholders. There are too many roadblocks between data and the end users to deliver event-based or predictive insights. Our survey shows that turning data into insights and action is burdened by a large number of processes and stakeholders involved with each new customer request. Further complicating this, surveyed retailers lamented that IT holds the controls to the data, which impedes business users from having direct access. A lack of tools and technology. Data silos and congested back-end processes are hampered by a lack of technology for predictive and streaming analytics, selfservice, reporting and dashboards, and alerts.

4 4 FIGURE 3 Data Efficiency Challenges Are Impeding Business Agility How efficient is your company at performing the following tasks regarding your customers journey through the buying process? (Respondents saying very efficient ) Correlate customer information with inventory on hand to provide relevant contextual offer 37% Enabling customer interaction via mobile 35% Being able to track items from vendor purchase, to the publication, to selling channel Develop APIs that link customer data to the in-store experience Provide a complete 360-degree view of the customer 28% 33% 32% Integration Optimize and personalize the shopping experiences through multichannel tracking of customers and behavior Order processing and fulfillment 37% Anticipating and intervening effectively in shopping cart abandonment Detecting fraudulent purchasing behavior 30% 33% 40% Event processing Anticipating customer churn and effectively introducing incentives to maintain loyalty Anticipating product demand and optimizing inventory levels 31% Improve shopping experience through in-store analytics to optimize inventory, product 31% placement, and offers Omnichannel inventory optimization 28% 34% Analytics/ BPM Base: 100 retail decision-makers responsible for technology surrounding inventory management and/or customer experience Source: A commissioned study conducted by Forrester Consulting on behalf of TIBCO Software, October 2015 These issues with integration, eventing, complex processes, and lack of tools hold back retailers from delivering an individualized, omnichannel customer experience. Overall, only about one-third of retailers surveyed consider their use of data to be very efficient with supporting the customers journey through the buying process (see Figure 3). To overcome these challenges and deliver a differentiating customer experience through fast data, retailers will need to address the following: Compiling a full customer profile. Survey respondents claim to be least efficient in creating a complete 360- degree view of the customer. They have difficulty capturing data from interactions in various channels, and then connecting those touchpoints and interactions to a single profile of the customer. Without a coherent understanding of the customer, personalization is near impossible, as is anticipating and preventing customer churn. Optimizing omnichannel inventory. Customers expect to be able to check the availability of a product they are shopping for on their mobile device, online, and in person, yet omnichannel inventory optimization ranks as one of the areas of lowest efficiency. Customers have little patience for retailers that are out of stock and won t hesitate to turn to a competitor to get what they want, when they want it.

5 5 Recommendations Retailers must evolve to keep up with the demands of their customers. It is no longer enough to just capture the account and profile information of customers they expect a contextual, individualized experience across all their preferred platforms. Customers expect that their favorite brands will connect them with contextually relevant, timely offers and advertisements at their moment of need. They expect a consistent experience online, in-store, on their mobile devices, and through any other platforms they choose to engage. They want a highly individualized experience that reflects their purchase history, past actions, preferences, and physical attributes. Reaching this level of customer experience doesn t happen without a holistic revision of data strategy, processes, and technology. It requires proficiency in integration, complex event processing, and analytics. To move your business down the path to data agility: Focus on improving your mobile experience first. Shoppers use their mobile devices to make direct purchases, research products that they later buy through other channels, and engage post-purchase. Design integration, analytics, and event services to coincide with and support desired business outcomes at these mobile moments. Employ the resources and tools necessary for more effective integration. Data moves and changes at different speeds. Core, master data for items, customers, and suppliers changes slowly. Behavior and offers are highly dynamic. Adopt integration capabilities that can seamlessly orchestrate data persistence layers with dynamic data to keep information and insight up to date and relevant. Develop a strategy for greater individualization of the customer experience through advanced analytics. Customer relevancy demands in-the-moment insight that is tailored to the segment of one. Advanced analytics is necessary to make sense of identities, preference, behavior, and intent in order to deliver individualized experiences and offers that increase sales. Methodology In this study, Forrester conducted an online survey of 100 retail professionals in the US, the UK, France, and Germany to evaluate the use of fast data business models to deliver superior customer experiences. Survey participants included IT and business decision-makers responsible for technology and processes surrounding customer experience initiatives. Questions provided to the participants asked about challenges retailers face with business agility and data analytics. Respondents were offered incentives as a thank you for time spent on the survey. The study began and was completed in October About Forrester Consulting Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their organizations. Ranging in scope from a short strategy session to custom projects, Forrester s Consulting services connect you directly with research analysts who apply expert insight to your specific business challenges. For more information, visit forrester.com/consulting. 2016, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional information, go to [1-V7P6T6]