There’s no doubt that digital innovation is revolutionizing the retail landscape — just imagine that today, the average person produces some 1.7 MB of data every second. Leaving an information footprint everywhere we go in the online world, it’s those that can make sense of this data that get ahead of the competition.
Peter Drucker, the father of modern business management, is attributed with an iconic quote: “If you can’t measure it, you can’t improve it.” But today, when technology gives us the capability to make virtually everything measurable, moving from data to insights — and ultimately to meaningful action — is where the true challenge lies.
As 76% of businesses that are advanced in their integration of technology, business goals and analytics report a more favorable market position, retailers today can’t miss out on using customer data to improve virtually every aspect of their operations.
1. Adapt your offerings.
Today, every single variable in customer behavior can be utilized to decipher even the most nuanced preferences. By keeping a close eye on customer data, you can not only adapt your offerings in real time but also predict future retail trends and fuel new product creation centered exactly around your customers’ wants and needs.
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Specifically, retailers can replace products that aren’t performing well with those in high demand, stock up in advance on products that tap into current market trends, and even utilize demographic data to fill in a specific gap. This can help you distinguish yourself from the competition, and also find out what your customers want even before they know — and serve it to them on a golden plate through personalized marketing efforts.
For example, broadening the product portfolio to match the needs of older customers — one of the most pronounced trends of the pandemic — can help you make big waves in today’s digital battleground. By understanding what kind of people shop with you, you can work to build way stronger relationships.
2. Alternate prices and offer promotions.
It’s scientifically proven that humans simply love a good deal. Not only does the purchase trigger a sense of satisfaction in our brain — even when we buy something we don’t need — but it also feeds on the fear of missing out, a key concept in marketing and beyond.
By affecting digital purchase decision-making, promotions and special offers inherently drive sales and create memorable shopping experiences that cultivate loyalty. Whether it’s alternating prices based on the latest market trends or nailing the best time to offer promotions, advancing a data-driven promotions strategy is vital.
In 2020, 88% of consumers in the U.S. used coupons when making purchases. By leveraging dynamic behavioral segments, retailers can offer personalized promotions for products the customers have recently bought, searched for or buy regularly. So, instead of sending a dog-food offer to a customer who has a cat, taking a few percent off their regular Whiskas purchase will definitely help you score some extra points.
3. Market better.
An omnichannel experience is no longer a mere perk, it’s an absolute necessity. Marketers today use 9.4 different channels on average to reach out to their audience, and these interactions should be as seamless and personalized as possible. Using customer data to ensure this, while optimizing your marketing campaigns, is key to success.
By utilizing tools like Google Analytics, Facebook Insights and even your POS data, you can get to know your customers better and note their buying preferences, favorite payment methods, demographic data and specific behaviors. Based on such datasets, you can then serve them relevant information on new products, services or content that directly matches their unique interests.
Moreover, keep a close eye on how individual customers react to the different interactions across channels and double down on successful strategies. Someone might hate phone push notifications and only communicate through email — and the other way round.
An example of a retailer that has mastered the art of marketing to their customers is Sephora. By observing high mobile engagement, the cosmetics giant has tailored new mobile experiences and also turned to innovative AI and VR technologies that allow customers to virtually try on makeup pre-purchase — directly taking innovation to disrupt their specific niche rather than just innovating for the sake of it.
4. Improve interactions and customer service.
Even today, many retailers still get customer service wrong, simply because they don’t realize that even modern businesses need to stay human first and foremost. Rather than mindlessly automating every step of the way, think about how technology can help you mine data to empower your team to serve customers better. Friendliness and human approach will never go out of style — that’s a fact.
By tailoring the experience to individual customers, such as communicating on their preferred channel, you can drive satisfaction and avoid awkward situations of customers having to repeat information they had already shared.
Retailers that want to go the extra mile can even profile customer personalities and create specific actions throughout the major milestones of their buying journey. There’s no doubt that when offering compensation during a difficult customer service conversation, an impulsive buyer might react differently than a regular shopper with a strict budget — so understanding these realities can help you offer the right resolution.
5. Predict – and prevent – churn.
As McKinsey notes, data and insights can help you preempt problems in the customer journey in many different ways. Today, retailers are increasingly implementing systems to easily track and understand what is influencing customer satisfaction and detect specific events to look out for. By creating a framework of predictive scores for each customer and outlining their unique personalized journey, you can ultimately evaluate the ROI of each customer experience investment and observe its effects.
For example, you can utilize customer data to identify abnormalities in behavior and reach out proactively to maintain a strong relationship. Likewise, it can help you find which fields your customer might need extra education on to make their experience smoother. Ultimately, while it’s important to tailor messaging and actions that don’t seem pushy, you can also come up with an alternative marketing solution right after a customer unsubscribes from a specific channel, such as email.
In today’s ever-competitive online marketplace, retailers are constantly racking their brains to implement new technologies and innovations to differentiate their offerings. Rather than seeing a close focus on data as the “necessary evil” that will help you take your services to the next level, always make sure that every data process works toward one thing: a better customer experience.
Chaim Lever is the Co-CEO of Four, the Miami-based split-payment platform designed to bring financial empowerment, cash flow and freedom to the hands of shoppers. Four is democratizing the financial system by providing simple, affordable and fair financial services to help more than 100s of millions of people live a better life. With a background in behavioral psychology and marketing, Lever is providing the most advanced payment system to accommodate the dramatic shift in consumer spending behaviors, while also driving the retention and conversion rate of online consumer brands.