We all know that the volume of data we’re producing in our daily lives is increasing all the time. From our collective addiction to social media and smartphones, to online banking and consumption of news, we’re constantly outputting a stream of tiny data points to companies that provide us with services.
Although this may be slightly disconcerting for some, there are undoubtedly many benefits to be gained from sharing data, and from companies using it in responsible ways.
The retail sector was one of the first to realise the potential value of the data that digital transactions and online behaviour generates. Even before the days when it dominated online commerce – back when it only sold books – Amazon was able to offer its customers personal recommendations based on previous purchases and where they had spent time on the site.
Today, retailers are using systems that are much more advanced, based on much richer data and integrated across multiple channels. In the age of Big Data, systems have been optimised to absorb the vast quantity of information that is being created by our digital lives.
Businesses are improving database systems around efficient access and processing—listening to and learning from the data at their fingertips, and using this data not only to better personalise the entire shopping experience, but also to influence merchandising decisions on sites, and at the store level.
The unprecedented access to data has enabled the development of more sophisticated algorithms and processing, which accelerate the identification of consumer trends and advance more accurate predictions at the individual level.
The process is by no means simply a one-way street however, and advancements in data and analytics have not taken place in a vacuum. Consumers, too, have grown increasingly savvy, and today expect to have a pervasive personalised shopping experience regardless of the channel.
Customers today are more discerning than ever before, and expectations have never been higher. Fail to meet them, and you not only lose your customer, you also get to hear about your failure on Twitter and Facebook. Complaints via social media can often be biting, but retailers are getting more adept at engaging on these platforms, and ultimately it’s yet another source of data that can be collated, analysed and potentially leveraged for personalisation.
The more granular retailers can get with personalisation, the more loyalty they will engender. Successful strategies will use data from four distinct realms: Product (e.g. price and availability), Content (e.g. videos and promotions), Customer (e.g. purchase history and lifetime value) and Context (e.g. customer location and web sites visited). Data from these realms will be integrated and analysed against relevant criteria, and predictive models will be built which will be capable of making decision in milliseconds, providing real-time personalisation.
It’s easy to envisage how this works in the digital world, and most of us will have encountered personalisation while shopping online. Creating a bridge between e-commerce and in-store commerce is less widespread, but an exciting area that will see more development in the coming years.
In-store technology like iBeacons will become familiar fixtures in retail outlets, and will become increasingly useful for both shoppers and retailers alike. They will connect with smartphones to display localised offers and promotions in-store. These could be unique to each customer based on spending habits, browsing history or proximity to a certain date, such as a birthday.
iBeacons can be deployed from around £700 and set up in-store in less than a week. The key to their success will be to provide simple, direct messages that are truly personal and can save customers time and money.
For example, on entering a store, an iBeacon could trigger a click and collect order, enabling you to skip the 15-minute queue. Or it could encourage you to buy toothpaste based on your purchase history and the fact that it was two months since you last did so. Promotions will only be welcomed once they have a legitimate use, and marketers have earned the right to present them.
Consumer experience is now the primary ground where retailers do battle. Customers have instant access to pricing and product information, and can switch retailers in a heartbeat.
This means the front line of customer loyalty is consumer experience, with personalisation the key weapon. Those that can deliver a rich, integrated, personal journey across multiple retail channels will be the winners, while those that don’t will be left behind.
Matthieu Chouard is Vice President and General Manager of EMEA at RichRelevance.