In the aftershocks of the global financial crisis, a new frugal spirit emerged. Instead of spending, Australians chose to hold onto their money. When they did spend, they were more likely to purchase online, particularly from overseas retailers. Consumers however are no longer satisfied to have products simply pushed in front of them, expecting a personalised shopping experience when, how and where they want. This rise of smarter more empowered and discerning shoppers has increased pressure on retailers to find ways to win over consumers and build long-term loyalty.
Today, nearly 80 percent of Australians shop using some kind of technology, whether it’s the web, a mobile device, TV or an in-store kiosk. For retailers to deliver the tailored experiences consumers demand, they must engage across all retail and marketing channels - consumers expect retailers to interact with them regardless of whether they shop in-store, online or on the go.
By adopting a multi-channel approach, retailers can interact with customers and learn what they prefer and how they behave in various retail spaces. They can then analyse this data to build a customer profile – a single view that provides a deep insight into how shoppers typically make their purchases and what they expect from retailers. Developing a unified view of each customer is not an easy process however - the average company operates 14 different customer databases. As a result, only 7 percent of retailers consistently engage customers across multiple channels.
To achieve this, retailers should gather both online and mobile customer browsing data to assist in anticipating customers’ future preferences. Similarly, tracking and monitoring real-time conversations and referrals on social media while engaging with online communities can allow retailers to spark conversations and excitement around the brand. Through loyalty programs, companies can also clearly see which product and retail channels consumers prefer. Furthermore, such programs reveal how strongly consumers respond to direct marketing approaches and how sensitive they are to price movements across multiple retail channels.
When analytics and these three sources are combined, a richly detailed view of the customer emerges. Retailers can understand how consumers behave when they shop and interact within different retail environments; and how they respond to different efforts to assist them to buy their product or service – a multi-dimensional profile of individual customers and their behavior.
By employing these customer-driven retail initiatives, retailers can:
- Optimise marketing spend. If customer analysis shows a group of consumers is more responsive to social media campaigns during the Christmas holidays, it makes sense to skew the media budget towards social media to boosts sales and revenues in this period.
- Personalise marketing. Instead of push marketing, retailers can now provide highly tailored, personalised offers through the retail channel that targets the individual customer. They can make similar recommendations or stage interactive events across multiple channels based on their analytical knowledge of each consumer.
- Promote customer-centric merchandising. By understanding which products people fill their shopping baskets with and why, retailers can make the goods available when customers want them. Understanding consumers price sensitivity also allows them to set clearance and markdown prices that effectively return the highest margins.
By using customer analytics to provide Australian consumers with the personal shopping experiences they demand, retailers will ultimately increase sales, boost profits and drive growth.