Bricks-and-mortar retailers have barely seen a week pass by in the last few years without another bad news story hitting the headlines. Stagnant high streets, currency fluctuations, political uncertainty, stuttering consumer confidence, CVAs, disruptive competitors – you name it, retailers have faced it. Here Grant Brown, managing director data management at Experian looks at how digital transformation, supported by accurate data, can pave the way for retailers to optimise their operations, improve customer satisfaction levels and help turn their fortunes around
For major retailers, facing a myriad of pressures that include squeezed margins, a culture of heavy discounting and the onslaught on online shopping, raising prices isn’t always an option if they want to maintain a profit and ensure their future survival.
Like any business in the digital age, brands are at risk of falling behind if they are unable to improve operational efficiency, while delivering higher standards of customer service that keeps shoppers engaged, spending and loyal. Consumers are seeking out retailers that provide a slick service that is intuitive to their needs, know their personal preferences and can merge the experiential experience of shopping in physical stores, with the convenience of placing online orders from home or mobile.
Digital transformation gives retailers the tools to deliver a true omnichannel customer experience, though only if it is underpinned by strong data. Many have attempted the delivery of omnichannel shopping, but services are often disjointed and operated in silos. From ‘personalised’ email offers to in-store digital kiosks, reward apps and past transactions, these initiatives can all add value and promote store visits and sales – but to really be effective, they need to be connected.
What is required is a platform that draws in data and information from multiple sources to create a single customer view (SCV) of every person who interacts with the brand. This can tell retailers how someone shops, how much they spend, their shopping preferences, demographic information and what channels they are most likely to respond to – whether that is online or in a physical store.
By bringing together different datasets, from social media analytics, contact centres, as well as website and store visits, retailers can identify opportunities to personalise their customer communications.
This is particularly important given that, according to a recent Experian report, improving customer service levels was highlighted as a strategic objective of digital transformation projects by 79.3% of businesses. The findings also give weight to the idea that the SCV is a key part of any digital transformation project, with 92% of businesses believing it to be essential.
Retailers are operating in a climate of fierce competition, where the consumer is king and an abundance of choice places customer satisfaction, repeat custom and loyalty in the highest regard. This is, once again, supported by the report, with 43% of respondents saying their customers expected ‘consistent and personal communication across every touch point’, while one in five wanted communication to be ‘frictionless because they are recognised’.
Accurate data is always going to be the retailer’s silver bullet for delivering the best customer service, improving customer satisfaction levels and driving sales. Digital transformation prompts businesses to invest in new tools, but the success of any project is only as good as the accuracy of the data that is fed into it.
If retailers are going to wean consumers off their diet of discounting and promotional shopping, they need to offer a value-added service.
Gone are the days of blanket email offers to customers, retailers need to speak directly to individuals, tailoring the content of their communications in line with their preferences, lifestyle and demographics.
Online-only brands such as Amazon are already at an advantage, since they have much of the information at their fingertips. However, a traditional retailer with both physical and online stores, must bridge the gap between them to create a true omnichannel shopping experience.
The consistency and integration of customer data are key, but so too is compliance with privacy laws and best practice, notably GDPR. Members of the public are well-aware of the value of their personal information, and if they are going to hand it over to retailers, they expect to see value in the form of personalised experiences and security. Having these systems in place is essential if retailers want to achieve a SCV, fed by accurate and correctly managed data that informs every stage of the omnichanel shopping experience.
At a time when retailers have to fight for every penny, investment in digital transformation projects have the power to deliver real value – and a point of difference – for customers, but only if the data they use is complete, consistent and compliant.
For further information, download the latest DataIQ and Experian research report www.experian.co.uk/blogs/latest-thinking/data-and-innovation/digital-transformation-research-report.