Retail is tough. Even with the slew of recent, optimistic headlines regarding increased consumer confidence and greater discretionary spending, blockbuster shopping weekends like Black Friday disappointed this year, with just 55.1% of consumers hitting stores and a 6.4% decline in spending compared to last year, according to the National Retail Federation. Worse still, brick-and-mortar stores experienced an 8% decline in same-store sales over the last two years, according to recent Commerce Department figures. The continual and ever-competitive struggle to thrive in retail remains an omnichannel problem.
So how can retailers stay afloat and work to remain one step ahead of their competitors? The answer is relevancy. Relevancy allows retailers to serve consumers’ needs better than the competition. It’s a simple yet crucial concept: The more relevant you are to a consumer, the more they believe you can meet their needs, which leads to more engagement and more sales.
While the scope of the challenge has changed, serving your customers by understanding their needs better than the competition remains a powerful retail strategy. Retail growth is increasingly driven by winning more purchases from the customers you already have, not by constantly churning through them. And the only way to win this “share-of-wallet” game is by understanding them more thoroughly and faster than the competition (i.e. what they buy, when, how and on which channels). Even just understanding isn’t enough, actually. Retailers need to turn this understanding into actions that impact all the decisions they make that affect each individual customer (e.g. pricing, offers, assortment, service, etc.) and have the ability to do this at scale, with hundreds of stores, thousands of products and millions of customers.
So, how exactly does a retailer provide relevancy? Leverage the wealth of consumer interaction data you already have — transactions, blogs, email logs, call center records, etc. Used properly, this is more than enough to really get to know and understand the individual consumer, who they are, how they shop, where and when they shop, what merchandise they like and don’t, how price sensitive they are and what offers they prefer. Not so long ago, having access to this level of insight into each and every customer sounded impossible. But with the explosion of Big Data, the emergence of the “connected customer” who leaves data footprints at every turn, the power of cloud computing and the breakthroughs in data science, it’s a reality now. So use it! Your customers will never stop appreciating your efforts to deliver relevant communication and personalized shopping experiences.
There are enormous business benefits in providing relevancy. Imagine the impact on your business if you can eke out just one more purchase a year from your consumers. Outside of grocery and drug store chains, most retailers have built their businesses on the average customer shopping only once or twice per year. But by delivering relevant and personalized value to individual customers, even for customers who may not have shopped at a retailer in a year or more, retailers have the ability to move the average number of shopping experiences up to two or three times per year. The impact on the bottom line from that kind of improvement is massive.
I encourage retailers to prioritize relevancy in their 2015 competitive strategies. Work to serve your customers’ needs better than the competition. Deliver relevant and personalized messages to individual consumers to ensure your mobile shopping app is saved to consumers’ home screens, your emails are being opened and your web site is bookmarked. In today’s world of fluctuating consumer confidence, ever-increasing price transparency and infinite shelf space, relevancy can make the difference between the winners and losers in the battle for customers.
Graeme Grant is the VP of Predictive Intelligence at Demandware. He is formerly the President and COO of CQuotient, which was acquired by Demandware in October 2014. CQuotient is a leading predictive intelligence platform focused on retail where the dominant use case is dynamically tailoring and personalizing the content of an email or web site to each individual consumer’s tastes. Brant is a start-up and high-tech veteran with particular expertise in the retail sector, and has held previous positions at Allurent, ProfitLogic, Oracle Retail and others.