Shoppers today do not see the many channels that retailers have as distinct and different, rather they view them as quite the opposite and expect that retailers recognize shoppers across all channels with which they interact. To satisfy the ever-increasing demands of the shopper, modern retailers need to understand their shoppers (and consumers) through insights and analytics to ensure their offering has customer relevance and a seamless experience across retail sales channels.
The vision in an omni-channel strategy is to engage shoppers in an intelligent, relevant, timely, and seamless way across all channels. It is delivering the right product, to the right place, at the right time, to meet the demands of the shopper. It is also in providing a real-time response to consumer demand or preference changes based on behavior analysis. Finally, it is in providing information and guidance to assist the shopper in making the best shopping decision possible. Here are several omni-channel best practices to consider:
- Fuel Store Traffic: Understand the value of leveraging omni-channel platforms – especially the web – to drive traffic to the still most profitable retail channel (stores)
- Web-to-Store: Leverage the data and cross-channel insights to understand the value of the website to drive store traffic, incorporate web insights to help merchandise in-store, convert web browsing to store sales, and leverage untapped web cross-sell and up-sell opportunities to help drive store traffic
- Clicks-to-Picks: Encourage / provide incentives to pay online, pick-up in store; start product return process online and drop item off at store
- Pay With Cash: Reserve products online and pay with cash at the nearest store
- Endless Aisle Program: Order, ship, and deliver out-of-stock products (buy in store, ship from another store / warehouse)
- Customized Merchandise Assortment: Store-level assortment customization to better reflect shopper profile/attributes, while still ensuring a unified, overarching branded message from corporate HQ
- Store Differentiation: Placing merchandise in stores based on shopper demographics and preferences; “Custom-fit” stores and merchandise to better reflect shopper attributes
- Demographics, Segmentation, and Customer Behavior Drive Merchandising: Collaborate with suppliers to drive a clear and timely direction on merchandising to help personalize the store experience for local customers
- Demand Driven Replenishment: Automated inventory and replenishment driven by historical demand and based on seasonal and casual impacts tailored to specific locations and location groups
- Create Clear, Consistent and Compelling Content: Because it can take more than five impressions for an individual to recognize a brand or specific marketing message, follow the three “C’s” for marketing messages. Communications must be clear (not confusing in words / phrases), compelling (interesting and/or topical to the receiver), and consistent (regardless of channel – web, in-store, mobile, the messaging, offers, and content are consistent).
- “Channel” Your Messaging: Some shoppers are on Facebook. Some shoppers are on Twitter. Some shoppers shop online and avoid the brick n mortar store. Some only shop the physical store. Some shoppers only shop your outlet store. Some shoppers buy your products through a third-party retailer or online outlet. Effective integrated marketing campaigns span retail touchpoints and deliver a customized, yet brand consistent, message and offer to shoppers.
- Drive Campaign Decisions Based on Analytics: Integrated analytics are changing the way brand marketers think about integrated marketing. As is typical in Retail, organizational silos limit coordination of retail-based integrated marketing campaigns. These walls must come down across silos in order to enable enable omni-channel communication and interaction.
Retail Mobile Engagement
- Online and Store Linkage: iPad/iPod deployment for employee knowledge, enhanced customer service, and employee productivity
- Shopping Convenience: Mobile apps and shopping walls blending the physical and virtual spaces allowing shopping anytime, anywhere
- Quick Assess to Information: QR Codes for convenient shopping and expert information, smart phones to leverage in-store signage
- Social: Enable social shopping, promotions, and word-of-mouth marketing
- Localized Offers: Location-based services = personalized offers
- Customer Loyalty: Strong leverage of mobile to drive loyalty programs
Dynamic Customer Segmentation
- Historical Customer Purchase Behavior: Tailor specific, highly relevant offers designed to stretch/grow basket and drive customer engagement
- Dynamic Segment Value-Propositions: A valid customer segmentation for a customer-centric strategy, at minimum, should satisfy four requirements: Should offer a distinctive and compelling solution that is not readily available elsewhere and is superior in meeting the segment’s functional, financial, emotional, and/or self-expressive needs; should drive purchase and/or usage behavior for the segment in one or more of the following ways: trial, loyalty, preference, wallet share, cross-sell, and/or price premium; should lend itself to continuous learning and improvement through an ongoing program of test-and-learn experiments; should be sustainable and defensible in the face of responses from competitors
Online Activity Fuels Personalized Engagement
- Digital Marketing Optimization: Enhance the customer experience, drive traffic and incremental sales by understanding common browsing patterns and identifying how web behavior impacts both store and web sales
- Insights: Drive additional store and web sales by leveraging advanced click-stream analysis and data insights.
- Cross-Channel Behavioral Analysis: Combine customer click-stream data with other multi-channel customer behavior-based data sources (in-store POS, kiosks, contact center, etc.).
- Clickstream Pattern Analysis: Identify common click-stream patterns and how they are correlated to web and store sales (insights into customer purchase intent) that are not available elsewhere.
- 360 Degree Customer View: Create a multi-channel behavioral view to drive segmentation and targeting strategies as well as marketing spend.
- Purchase Path Identification: Associations between purchase paths.
Big Data Drives Loyalty Programs
- Highly Customer-Relevant Loyalty Programs: Leverage the data to better understand the lifestyle relevance of the member. Leverage big data analytics to break out of the generic loyalty rut.
- Understand the WHO: Personalize content and drive consumers to take a second look…know and understand customer buying behavior inside your eco-system AND outside your eco-system (what your customers are doing elsewhere online, what their friends are buying)…know what behavior, lifestyle-relevant segments they fall into.
- Customer-Centered Loyalty: Know how your customers want to be rewarded – Some want discounts, others want product previews, others want to feel important.
- Promote/Enhance Brand: Personalized, customer relevant loyalty can go above-and-beyond just responsiveness (and enable brand with a heart, a soul and a pulse).
Social CRM Optimization
- Social CRM: Actively leveraging social networks to drive sales by presenting one-to-one customer deals and value-propositions and incentivizing viral marketing. Leverage the impact of influential consumers on brand sentiment and sales.
- Understand the WHO: Holistically understand who customers are, what they value, how they behave, their purchase patterns and brand affinities.
- Track and Monitor: Track and monitor all (or by select, highly targeted customer segments) social media user experiences.
- Sales Driving Insight and BI: Incorporate daily/weekly multi-channel consumer insights into promotions, pricing, store operations, supply-chain plans.
- Merchandise Marketing in Real-Time: Establish baseline customer metrics and drive highly targeted engagement process to new levels.
- Create Customer Affinity Segments: Use sales data to understand and leverage customer segment brand and merchandise preferences and affinities.
- Highly Customer-Targeted Merchandise Promotions: Establish baseline customer metrics and drive highly targeted, highly customer-relevant impulse merchandising campaigns and promotions.
- Sales Driving Insight and BI: Incorporate daily and weekly multi-channel consumer insights into impulse and treasure hunt merchandising promotions, pricing, and supply-chain planning.
- Targeted and Direct Affinity Merchandising to Enhance Margin Mix: To balance low-margin traffic drivers and mark-down promotions
Since shoppers do not distinguish between channels, retailers will have to support seamless integration among and between each of them. The industry is evolving quickly in its shopper and consumer data analytics capabilities. The ongoing challenge for retailers will be how to best analyze all this rich data and derive from it valuable insights about what consumers want and need.
TD: Justin Honaman
Title: Managing Partner, Consumer Goods / Retail North America Analytics Practice Leader
Twitter: @jhonaman @teradataCPG #teradata