The 360-degree customer view is the Holy Grail of today’s retail industry. Consumers are increasingly demanding personalized, seamless experiences, and organizations need to act promptly to stay ahead of these expectations.
Customers are more willing than ever before to share their data if they are confident it will enhance their experience. Shoppers value personalization just as much (if not more so) than merchants, and will happily tell brands what they want to know if it results in a better experience.
The Foundation of the Experience Economy
Data — more specifically, the 360-degree customer view — is the foundation for developing the ideal customer experience and convenience engagement. Information allows organizations to personalize the shopping journey, which creates positive experiences and builds loyalty.
Essentially, this all comes down to customer analytics. According to Forrester’s Brandon Purcell, “customer analytics uses customer data and analytic insight to design customer-focused programs that win, serve, and retain customers.”
The challenge, though, is collecting data from each and every touch point to create a relevant, detailed portrait of each customer. While this is a massive action item in itself, companies often need to look beyond their walls and outside of their own experiences to gain the nuanced insight required to effectively personalize each customer’s experience.
Quality Over Quantity: Why Personalization and Context Matters
Why is personalization such a key part of any successful retail strategy?
It comes down to how success is measured. Retailers are seeking more than just conversion; they want loyalty. Similarly, customers are looking for brands to invest in them, get to know them and personalize their experience.
The proof of this is that customers are willing to pay more for brands when they get value out of the experience. How can retailers deliver on this added value? By investing in gaining a complete 360-degree view of their customers, and then using this insight to make every part of the buying journey personalized, comfortable and engaging.
That means winning retail experiences are a function of data.Data is what makes the world of personalization go ’round. Without it, retailers have no way of understanding who their customers are or what they want.
Many retailers create simplified customer personas and call it “personalization.” Sadly, this is nowhere near good enough.
Marketing to personas creates a number of fallacies and headaches for retailers. Take, for example, an upper-middle-class working mom who lives in suburban Dallas. An auto retailer would naturally peg her for a minivan or a midsize SUV — she has kids and disposable income and needs a car for getting the family around town. What they don’t realize, however, is that this woman spends her weekend on a ranch and needs the power, size and capacity of a pickup truck.
Gaining the required context to make every offer and experience personalized is exceptionally difficult, so we can forgive the auto retailer above for getting it wrong. The error may seem minor, but with customer loyalty on a knife’s edge, retailers need to find ways to mitigate these risks.
The Risks and Rewards of Third-Party Data
Proprietary customer data fuels personalization initiatives, but it can only get retailers so far. Customer journeys are no longer linear: spending habits, personality traits and more combine to add depth, nuance and context to this journey, and these variables need to be reflected in individual data sets. Enter the power of collaboration.
Since people don’t only engage with one brand on their shopping journey, solid, trustworthy third-party data can be a real game-changer for personalization efforts. This information can even help businesses that are lagging the industry in establishing their own internal data strategies and capabilities.
At the same time, however, cost and data validity are important factors in whether third-party data is worth it. If you can’t trust the data, or if it costs more to acquire than you’ll get out of it, is it really worth it?
Collaboration: The Best Way Forward
The situation around the utility of third-party data is a complex puzzle. On one hand, it can add invaluable context to your personalization efforts. On the other, it can potentially introduce more problems than solutions.
Quality third-party data can be invaluable, but so too can collaboration with other retailers and industry leaders outside of retail, such as automotive and hospitality. Instead of looking within your vertical, look instead at the journey your customers take:
- What did the customer do before and after interacting with my brand?
- What loyalty program data would be valuable to extrapolate upon?
- How does my brand compare against others in the customer’s lifecycle pattern?
Building the customer journey from their perspective will reveal a trove of opportunities to work with other industry leaders, share data and better understand your customers. This entire concept rolls up into the value of collaboration. Engaging, data-driven and individualized experiences are extremely difficult to create using just the internal data at hand.
In the experience economy, context is what makes all the difference.
Suzanne Larabie is a Vice President with Capgemini who provides vision and innovation to clients as they seek to transform their businesses. With a strong focus on data and analytics, she helps clients understand how to leverage data-driven insights for competitive advantage. She can be reached at firstname.lastname@example.org.