With supermarket giant Tesco announcing its worst sales figures in 40 years, it has never been clearer that consumers are becoming more discriminating about where they spend their cash.
Retailers are going to increasing lengths to attract and retain customers. Many, maybe even most, are using detailed information about shopping habits to make evermore targeted offers to customers through vouchers at the checkout and online.
But if everyone is playing the same game, can everyone be a winner? Is there a limit to the effectiveness of such approaches to drive customer loyalty when consumers are becoming increasingly promiscuous and cost driven?
Ian McCaig, co-founder and chief marketing officer at data experience management platform Qubit, says: “The modern consumer lives in a multi-screen, multi-channel world and can arrive at their final purchase after an extended ‘research-to-checkout’ journey. They expect their experience to be an easy one, with products of interest readily displayed and optimised websites that enable them to browse across devices.”
The availability of data presents retailers and marketers with a massive opportunity to truly understand their customers, says Mr McCaig, as online teams are much more knowledgeable about who is visiting their virtual store than the high street shop assistant.
“Data allows marketers to deliver a tailored experience, serving customers with products similar to those they have previously bought or offers and merchandising based on their engagement with the brand,” he says.
But is it all about collecting data? Matthew Todd, head of retail data at PwC, says we’re too hung up on it. “It’s not all about data, it’s about profitable growth,” he says, “You need to know before you start the process that you are going to be able to make changes and monetise it. The hype around big data frequently overlooks this.”
The availability of data presents retailers and marketers with a massive opportunity to truly understand their customers
Mr Todd agrees that consumers are more savvy than ever. “They look around,” he says. “I saw a lovely example of a company running a promotion on its Facebook page. It was offering a discount to its ‘best customers and friends’. The very first reply was, ‘Here is a link to a better deal’. It completely undermined trust and made the company look awful. I also saw that someone on eBay had auctioned promotional codes for Xboxes.
“You need to have control over all of your promotions. Trust matters more than everything else. If you aren’t in control, the consumer will find out and you will be undermined.”
And this is the challenge. “It’s about reinventing your marketing department,” says Mr Todd. “Keep a record and have a clear plan. Do more with fewer promotions.” The most important aspect of this, he says, is to focus on what’s in it for the customer: “It’s not one customer. There are many different segments. Middle-aged bloke versus bright young thing. Have you really got the right programme for everybody?”
What many retailers do wrong, he says, is to collect data in multiple buckets. “Some retailers have an e-mail list, customer service list, loyalty scheme list, friends on Facebook,” he says. “These are all unconnected buckets of data. And this means you can’t run a co-ordinated campaign.”
Moreover, the new “right to forget” ruling – Google’s service to allow Europeans to ask for personal data to be removed from online search results – means that retailers with multiple buckets have to find that person in each bucket or face a data protection fine. “I met one retailer who had 21 separate buckets. It’s accidental unthinking,” says Mr Todd.
Qubit’s website optimisation technology helps hundreds of retailers, including Topshop, Wallis, DFS and Farfetch, to understand the data and behaviour of their website visitors, enabling them to create personalised website experiences and drive conversion rates.
Menswear retailer Burton, for example, uses weather-targeting technology, directing users to weather-appropriate products based on their local weather and temperature. Burton also discovered, using their feedback tool, that delivery charges were holding its users back from purchase so it offered them with an exclusive free-shipping code to encourage final sale.
David Capaldi, chief executive of customer experience management software provider Opinurate, says it’s all about the personal touch. “Many commentators argue that choice has killed brand loyalty, but I’d argue that the opposite is true – that, in a time of unlimited choice, people feel most comfortable with brands they know and trust, and that trust depends on the fragile concept of customer service,” he says.
Through its cloud-based platform, Opinurate collates information that it receives from customers and presents it in intuitive, real-time dashboards providing customer insights. The information is analysed and individually presented to different staff within the business, from front-line workers to board members. This allows staff to understand customers’ preferences, as well as providing an overview of the company’sperformance, with the ability to drill down into detailed information.
Mr Capaldi adds: “Customers say they appreciate dealing with companies whose staff made them feel valued or special, where they say they are treated as individuals, are listened to and feel they have the opportunity to ask questions. The technology exists to provide real-time feedback on key criteria to all staff and to make this an ongoing focus for changing behaviour and exerting real change.”
However, Mr McCaig warns of going too far. “Retailers need to be aware that there’s a fine line between ‘personal’ and ‘creepy’, and marketers need to use their judgment to ensure that customers feel well served – not stalked,” he concludes.