Harnessing GDPR to increase retail customer engagement

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By Ashish Koul, President of Acqueon

It’s no secret that the retail landscape has drastically changed, and amount of challenges the industry faces has increased. 2017 saw UK consumer spending slow to its lowest level in five years, highlighting that retailers are all vying for a piece of a pie that has been getting smaller. To succeed in such an environment, it’s vital that retailers learn to stand out. If retailers can get customers to their website – which is already a big ask – it’s even more difficult to keep them there. All it takes is a few clicks for them to move to a competitor’s site – highlighting the need to engage customers to increase their ‘stickiness’. The key to achieving this is personalisation.

The better an organisation knows its customers, the more effective personalisation can be. Data is the answer for many when it comes to understanding customers more intimately, from their likes and dislikes to their purchase history. This allows retailers to target potential and returning customers with personalised offers and messages – increasing engagement and ultimately sales. However, the introduction of the EU General Data Protection Regulations (GDPR) has made this entire process more difficult by adding restrictions on the use of data. The result is that e-commerce providers now need to work on a better balance between profitability, profit, and privacy.

A unique experience

Increasingly, it’s not just what your message is, but how you deliver it, that can make the difference. Online behemoths, like Amazon, are changing customer expectations – in fact, Amazon is consistently voted best in the UK for customer satisfaction. To compete, online retailers need to match the ease-of-use offered by the Amazons of the world, while also ensuring they connect with customers in a way that suits them – whether that’s via email, Facebook, chatbot, text or phone – retailers have to provide a consistent, omni-channel experience that reaches all audiences.

Customers also expect retailers to manage their experience end-to-end – from sale to delivery. Gone are the days when people would be happy to sit at home all day and wait for a parcel – they want delivery times in small windows of time, and real-time updates, or even to be offered discounts if a delivery is delayed. This lifts the bar once again for etailers looking to provide a compelling customer experience. Using data analytics to transform customer experience management and marketing is therefore a necessity for the modern retailer; helping to drive higher click through rates, reduce abandonment rates, and ultimately increase sales. But there is a new problem ahead.

Getting personal

This use of data has becoming increasingly complex with the introduction of GDPR, which represents a major evolution in data security and privacy. From an operational perspective, GDPR states any data that specifically relates to a person, ultimately belongs to that person – not the organisation creating, holding or processing it. E-commerce organisations will have to obtain and record explicit consent for personal data to be held or used, with data collection kept to a minimum and only used in the context agreed with the customer. Customers can also choose which channel they wish to be communicated through and in what context.

And there is a lot at stake. A breach of GDPR can result in fines of up to 20 million Euros or 4% of global turnover, not to mention the reputational damage and operational costs. It is important to note too that a GDPR ‘breach’ does not have to involve any loss of data, it also covers misuse of data; for instance sending marketing information to an EU citizen that has requested not to receive such correspondence, or sharing data with a third party provider. It’s no surprise that eight in ten retailers are worried about GDPR compliance.

Embracing opportunity from regulation

Yet, handled right, GDPR is an opportunity to increase customer engagement. Automating as much of the customer engagement process as possible will be essential to maintaining compliance and reducing cost and complexity. Using a customer engagement platform can help retailers to control outbound communication and cross-reference that the customer has given explicit consent for their data to be used, as well as identifying what channel they prefer to be contacted over. This means businesses stay within the law, but more importantly it also ensures that customers aren’t targeted with irrelevant communications which could put them off the brand.

Retailers must keep in mind that it’s not just about avoiding fines, but the focus should be on transforming and improving the customer experience. By improving all elements of the retail journey and associated communication, customers are more likely to value communication rather than be disgruntled by it. This change in perspective will improve brand loyalty. Today there is no longer a place for unfocussed mass outbound texts or e-mails etc., we are now firmly in the era of personalisation. Ignoring this will likely result in customers voting with their feet and deciding to shop elsewhere. Retailers must ensure all communications with customers are relevant and targeted on their preferred channel, resulting in a positive impact on retailers’ bottom lines.