28 Dec Modern retail: Be proactive or become meaningless
The connected consumer is a handful. He has unparalleled information at his fingertips. Hyper competition allows him to play the best price game at his convenience. He doesn’t take the retailer’s word for anything, allowing classic through the line advertising strategies to become impotent. Instead he gets his recommendations from trusted peers or independent digital media. He has extremely high expectations. He is a born sharer communicating with generosity his recommendations, and with vehemence his experience with retail failures.
Retail companies must get the conversation they have with this customer right. Unfortunately in our experience most retailers try to adopt the old economy mass advertising and seasonal discount approach to this interactive informed customer and miscalculate on both the moment and the message. The key to looking at the digital customer is to understand that he is on a journey. The only way to make the customer sticky, maintain profitability and increase the Customer Lifetime Value (CLV) is to engage with him proactively on the right moment in the journey. Only a proactive retailer can cater to the digital customer.
So how do you make a proactive retailer? Many consulting companies make this a 3 to 5 stage process. In reality our personal experience sees this as a two stage process because our definitions are customer centric.
Knowing your customer is at the heart of it. Which means you need to be getting data from all points the customer is touching your business and brand. This data is cross channel meaning you need a unified view of online and retail sales. These channels also need to be seamless according to customer desire and experience. Insights and creation of the customer centric omnichannel is thus linked. A mobile application is no more a vanity project but a must have as customers increasingly transfer ecommerce to larger average screen size devices. When you can buy, pick up, return or replace any item across physical or online retail and offer promotions for same across physical and online you’ve created an omnichannel that can start delivering the data for you to mine. This requires automation of back office and retail, and digital storefront, and supply chain as well as business analytics across this integrated channel.
An example is redemption data sliced by demographics off a digital seasonal promotion tracked in real time that correlates automatically with inventory allowing you better replenishment metrics for the season in general including at retail outlets. Digital metrics around where customers are spending more time but buying less on your online portal or application allow you to train staff in store to increase conversion rates for higher margin items.
The next step is to differentiate and personalize. This is where the data you use touches the customer at those parts of his journey where he is open to input and not committed thus getting a greater share of his wallet and increasing the chances of standout products going viral. Customers hate intrusion but a self-service channel or service that allows them to customize your digital connection with them if implemented intelligently will allow you and the customer to be on the same side. This is the holy grail of retail: A customer experience in which the retailer is a helpful partner on the customer’s journey.
Location based marketing can help you tailor coupons and discount to the individual customer level. It is now possible to identify the customer who has bought from you nine times when he enters the mall housing your store and send him a one off time bound redeemable discount code via sms for his tenth purchase. You can invite the customer with a personalized email featuring exactly those product lines they bought in the store same time last year and so on. An application that sends alerts for only those products a customer wishes to know about is an example of the proactive retailer. The same application should be customizable so the customer only sees what he wants to see and is able to create a prioritized experience. A response time in minutes to a social customer complaint is a proactive retailer retaining the customer that may otherwise be lost.
The digital era customer may be harder to please than any customer in history but he is willing to be delighted and once delighted willing to share his positive experience with people he or she influences. Only a proactive retailer has the chance of consistently delighting them.
This website and its content is copyright of InfoTech Private Limited – © InfoTech 2015. All rights reserved.