Retail: It’s all about gaining consumer confidenceMarch 18, 2015 No Comments
Featured article by Jean-Michel Franco, Director, Product Marketing, Talend
It’s no secret that the Internet and e-commerce have revolutionized the retail industry in recent years. E-commerce has drastically changed the way in which information about a customer’s journey to purchase is captured. Companies can now determine with relative ease what a specific customer is looking for, how they found the site, products they have purchased previously, and even past purchases they abandoned.
E-commerce has not only opened up the possibility of gaining a better understanding of customer behavior, but also allows retailers to react in real time based on this information. Distributors are now considering applying this concept across all sales channels – stores, call centres, etc. The dual challenge facing most retailers today is developing a full understanding of the customer journey across different sales channels (multi- or omni-channel) and reacting with greater accuracy across all of them, including physical retail outlets.
This is not as easy as it seems. The knowledge obtained by the seller differs depending on the channel chosen by the customer. At a checkout counter, the customer may only be recognized if they own a loyalty card or have already visited the store. In the latter case, it is extremely complex to make the link to past purchases. Similarly, a website may enable the collection of data on the intention to buy, but it is difficult to correlate these events with purchasing transactions that are not made online and in the same session. While challenging, it is critical for retailers to find a way of making these connections. The stakes are high, given that 78% of consumers now do their research online prior to making a purchase.
One solution is to integrate sensors into the various elements that make up a customer’s purchasing journey, then analyze and cross-reference this data to extract concrete information from it. For instance, internet users often visit commercial websites during the week in order to prepare for making a purchase on a Saturday. If, for example, the store has a self-service Wi-Fi facility linked to a mobile app it can follow the customer’s journey right up until the actual purchase, or even influence it by proposing a good deal at just the right moment.
Engaging in this process is done in a gradual manner. It usually begins with a very detailed analysis of the customer’s online journey to collect information and cross referencing it at an aggregated level with actual purchases to determine correlations and refine segmentation. This information must then be cross referenced for a second time with the transactional data from the physical stores and the website, which enables the retailer to map the customer’s journey from the intention to buy to the purchase. It’s a matter of developing a recommendation system in real time throughout the customer’s journey that yields a dual benefit: increased sales and greater loyalty.
The main challenge facing retailers in the future lies in the value-added services that they may or may not be able to provide to their customers to accompany their products or services. Consumers have learned to be wary of digital technology. For example, they create specific email addresses to get the offer they need without revealing their true identity in order to prevent further contact. More than ever, they will only be inclined to share profile information or detail about their purchasing intentions if they trust the retailer and believe a relationship would be beneficial.
How do you create this trust? Via value-added services. When consumers see that their interests are being considered, they do not feel constrained or trapped by commercial communications. Imagine that, on the basis of the till receipts or a basket that is in the process of being filled, a retailer can guide the choice of products presented to a consumer based on personal criteria. Customers are aware that their journey is being tracked by the retailer, but if they derive some benefit from it, i.e. personalized offers, they will be less inclined to object. Amazon has paved the way for this with its “1-Click” ordering. In other sectors, such as the taxi industry, newcomers have gone even further, revolutionizing the customer’s journey with digital technology: from searching for a service to payment through a range of innovative services that make the customer’s life easier, such as the automated capture of expense forms.
In a world in which advertising and tracking are increasingly present, data analysis that is carried out with the sole aim of commercial transformation is ultimately doomed to fail as it is based on an imbalance between the benefits offered to the customer and those gained by the supplier. Until now, personalization in retail has largely been limited to marketing and measured in conversion rates, except in the case of distributors that have increasingly relied on customer loyalty. Multichannel is not the invention of distributors – it is a reaction to consumers’ wishes. Even Amazon, Internet pure player, is going to start opening physical stores. In order to be successful, retailers need to do whatever it takes to become better acquainted with their customers’ journeys in order to gain their trust and respond more effectively to their wishes.
Director, Product Marketing, Talend a developer of big data integration software and related solutions.
Jean-Michel Franco is Director of Product Marketing for Talend’s Data Governance solutions. He has dedicated his career to developing and broadening the adoption of innovative technologies in companies. Prior to joining Talend, he started out at EDS (now HP) by creating and developing a business intelligence (BI) practice, joined SAP EMEA as Director of Marketing Solutions in France and North Africa, and then lately Business & Decision as Innovation Director. He authored 4 books and regularly publishes articles, presents at events and tradeshows and can be followed on Twitter: @jmichel_francoCLOUD COMPUTING, DATA and ANALYTICS , SECURITY, SOCIAL BUSINESS