Drive loyalty today while transforming your retail business for tomorrow.
In the cutthroat world of retail, winning customer loyalty is becoming a complicated business. At one time, loyalty was about price and convenience, but today, creating loyal customers requires more sophistication. To stay competitive, you need a robust digital foundation — one built on collecting data online and offline, segmenting your audiences, and personalizing content through data-driven real-time and dynamic experiences.
It’s a solid start. But to reach your goal of being a customer’s first choice, you need to develop even more immersive and trusted experiences that seamlessly connect both their online and offline journeys. Indeed, in an eMarketer report, 69 percent of millennials said they would pay more for products or services if they received their most desired benefits from a retailer — benefits such as a higher degree of relevance, flexibility, and service from the brand.
To deliver these benefits to your customers, you need to offer seamless campaigns to multiple audiences personalized to their location and channel presence. At the heart of these efforts, of course, lies data. But it’s more than just having the data — it’s being able to execute on that data across multiple channels now as well as new channels in the future.
Retailers that are upping their data management game are finding that they can increase loyalty by focusing on key performance indicators (KPIs) like visitor frequency, transaction size, and lifetime value. But they are also finding that as new technologies and channels such as the Internet of things (IoT), augmented reality (AR), chatbots, and virtual personal assistants (VPA) enter the retail space, they are better prepared to embrace and succeed in these new channels than their competitors.
Managing offline and online data for a complete view.
In a world filled with data, it can be hard to make sense of it all. With first-, second-, and third-party data coming into your organization from a number of different places, you may have the data to build a complete view of your customer, but not the means to do so.
In Boulogne-Billancourt, France, leading beauty retailer Sephora was struggling to understand how their loyalty program was working and needed more control of their data to figure it out. To better drive future loyalty, the retailer needed a way to drill down into their data. They wanted to be able to compile sophisticated segmentations using each customer’s unique transactional history gathered from various interaction points.
As highlighted in an article in AdExchanger, Nordstrom had a similar pain point. With digital subsidiaries such as Trunk Club, HauteLook, Nordstrom.com, and NordstromRack.com — all with their own data stash — Nordstrom couldn’t gain a comprehensive customer view that would allow them to perform cross-device targeting and comprehensive attribution. They also didn’t have a good way to connect online data to their brick-and-mortar data.
To address their shoppers’ expectations for relevant content and their own need for a consistent experience across channels, Nordstom invested in a data management platform (DMP). “We realized we have really good data,” said Kindle Fell, senior product manager for advertising technology at Nordstrom, “but we needed it consolidated in one place.”
A DMP is a buyer-side platform that creates a centralized location for all types of data, allowing you to create target audiences based on a combination of in-depth first- and third-party audience data. Additionally, DMPs can accurately target campaigns to these audiences across third-party ad networks and exchanges. They can also accurately measure which campaigns perform the best across segments and channels to help you refine media buys and creative.
With a DMP in place, Nordstrom could compile data from multiple sources in a centralized location to get a complete view of their customers. With this additional insight, for the first time last holiday season, Nordstrom could see who was shopping at both Nordstrom.com and Nordstrom Rack and market to them appropriately. Instead of looking for proxy metrics like return on ad spend, the retailer was able to meet more tangible goals, like moving customers deeper down the sales funnel in order to acquire new customers.
Similarly, Sephora knew that they needed to be able to go beyond providing simple discounts and look at the lifetime value and the full journey of the customer if they wanted to remain relevant and beat out competitors. But to achieve these goals, they needed to gain better access and control of their data.
By creating a consolidated location for all data, Sephora gained a comprehensive view of their customer audiences. They could drill down to compile sophisticated segmentations using each customer’s unique transactional history gathered from various interaction points, including point of sale, web, and call-center activity. Further, they could use their tool’s response-tracking functionality to calculate buying behavior indicators by these segments according to the number of products bought during the last 12 months, the number of different brands purchased, and the number of different stores where purchases were made. This in turn helped the retailer improve their targeting efforts and drive more loyalty.
Having this kind of data could also potentially allow a retailer like Sephora, for example, to go beyond offering just sales and deals. By being able to know that a customer purchased an eye pallet in-store, the retailer could then retarget that customer via email with an offer for a set of brushes — heightening the relevancy of the offer.
Over time, these types of tactics have allowed Sephora to double their loyalty program response rates without increasing campaign spending. They have also gained the ability to measure campaign effectiveness according to brand, geography, and interaction channel.
Get to know your data.
Seamless cross-channel campaigns drive higher loyalty.
As Nordstrom knows, having a way to connect online and offline data is a critical component of being able to improve the customer experience and drive deeper loyalty from customers. But to do this successfully with multiple audiences across multiple channels, you need more than the ability to create highly targeted segments. You also need the ability to automate campaigns across channels to provide your customer seamless personalization wherever and whenever.
Using a DMP helps with compiling offline and online data so that you can increase your conversion rate by knowing where your audience is and personalizing every touchpoint — whether that’s online or offline. But you also need a creative campaign that resonates with your shoppers.
The Container Store’s loyalty program, called Perfectly Organized Perks (POP!), is an example of when a retailer excels at creating a seamless multi-audience campaign across channels that will drive loyalty.
Starting with an in-store experience, customers can sign up to join the Container Store’s loyalty program at tablet kiosks. The retailer then uses email and other online channels to drive customers back to their stores by offering free gifts. Picking up a free gift not only gives customers a reason to be excited to visit their nearest store, but it also gives store employees opportunities to connect and build trust with these high-value customers.
But that’s not all — the Container Store has continued to expand on how it can integrate the online and offline experience for its customers. Recently, the retailer began testing an integrated concierge experience that helps customers navigate its stores. Here again, the Container Store orchestrates the campaign across multiple channels, using email to inform customers of this new concierge service. Then, when customers call the store before visiting, their very own concierge greets them and helps them throughout the store.
For brick-and-mortar stores that are struggling to maintain shoppers’ loyalty, finding a way to bridge the online and offline experience is crucial. Likewise, so is having the data and the technology to execute creative concepts that feel genuine and build better relationships with your customers.
Transform your retail business today for tomorrow.
One of the biggest advantages of ramping up your data-driven marketing efforts today is that you’ll have the dual advantage of seizing the moment while being poised to take control of the future. This means that you glean actionable data insights that will allow you to deliver relevant and personalized content now, while simultaneously readying your organization to use that data in new and emerging channels.
According to the “2017 Digital Trends in Retail” report by Econsultancy, intelligent, conversational, and immersive experiences powered by artificial intelligence (AI) and virtual reality (VR) are where the future lies for retail marketers. And while these technologies may still be in their infancy, it won’t be too far in the future before they become mainstream.
Retailers like Rue21, a specialty retailer of teen apparel and accessories, are already embracing new AI-powered technology such as chatbots. Rue21’s chatbot is a virtual stylist on Facebook Messenger that works to learn a shopper’s interests and preferences, respond to their requests, and even make recommendations for complementary items.
By leveraging the popular social media platform, Rue21 can better target their primary audience — millennials. And their efforts aren’t focused on customer service as is the case with most chatbots. Instead, they’re about personalizing the experience to drive loyalty.
“They [chatbots] have the potential to not only deliver exceptional online experiences, but also inspire purchases and increase the number of items in people’s shopping carts,” notes Michael Klein, Adobe’s director of industry strategy for retail.
Another exciting channel for retailers is the use of virtual personal assistants (VPAs) like Amazon Alexa, Apple Siri, Samsung Bixby, or Google Home. Thanks to improvements in speech recognition and increased adoption rates, voice computing is becoming a natural way to communicate. As VPA continues to become more prevalent, retailers should be looking at how to incorporate this channel into their campaigns as well.
AR and VR is also growing in retail. Lowes, IKEA, and John Lewis are among retailers that are giving customers experiences that allow them to visualize how appliances and furniture will look in their home. In addition, a report by IDC suggests that retailers will most likely see the channel adopted in the apparel area, where the technology can be used by shoppers to visualize different clothing and accessory choices, access product information, and communicate with sales associates. And to complete the sale, these technologies can allow customers the option to initiate and complete the purchase from within the fitting room.
As exciting as these future technologies are, being able to launch any of these new technologies or channels successfully will require data. For AI-based technologies like chatbots and intelligent voice systems that rely on machine learning to become smarter, the more data the better — since data is what helps these technologies learn how to further personalize the experience. And it won’t just be data input into the systems that helps retailers, but also data pulled from these technologies. For instance, voice analytics are already available and can track metrics like user ID, intent, number of users, number of sessions, session length, and frequency of use from voice-enabled assistants.
Personalized experiences mean knowing and responding to your customers personally. And while technology like bots and AI may feel cold and impersonal, if they’re loaded with the right data, these technologies can provide your customers with an experience that’s tailored to their specific needs and wants in real time — even if the want is as simple as getting customer support faster from a chatbot than a live person.
Take the next step.
Becoming an experience business that can deliver the kind of personalized moments your customers crave is a necessary next step for retailers. Transformation, however, is a process. It starts with simply collecting first-party data online and offline, then learning to segment audiences and use dynamic content, and finally, implementing a DMP solution that will give you even more sophisticated control of your data. Once you have the digital foundation and analytics you need in place, you’ll be able to orchestrate seamless cross-channel campaigns that build customer loyalty and enhance customer acquisition.
Those who hesitate and don’t take the next step now will not only miss the current opportunities to connect with customers, they’ll also miss future opportunities to transform their business. And rest assured, as the digital landscape continues to change, the stakes will be just as high, if not higher, tomorrow as they are today.
Adobe Retail Team, “Conversing for Commerce: How the Rise of Chatbots Will Improve Your Customer Experience,” Adobe, May 23, 2017, https://blogs.adobe.com/digitalmarketing/customer-experience/conversing-commerce-rise-chatbots-will-improve-customer-experience/.
Bruce Swann, “How The Container Store Bridges the Gap Between Offline and Online Marketing Channels,” Adobe, October 3, 2016, https://blogs.adobe.com/digitalmarketing/campaign-management/container-store-bridges-gap-offline-online-marketing-channels/.
“Digital Intelligence Briefing: 2017 Digital Trends Report in Retail,” Econsultancy, 2017.
Kelly Liyakasa, “A DMP Boosts Nordstrom’s Business Transformation,” AdExchanger, March 27, 2017, https://adexchanger.com/advertiser/dmp-boosts-nordstroms-business-transformation/.
Khari Johnson, “Adobe Launches Voice Analytics for Siri, Alexa, and Other Intelligent Assistants,” Venture Beat, June 29, 2017, https://venturebeat.com/2017/06/29/adobe-launches-voice-analytics-for-siri-alexa-and-other-intelligent-assistants/.
Leslie Hand and Robert Parker, “IDC PlanScape: Digital Transformation of Omni-Channel Commerce for Retail,” IDC, June 2017.
“Sephora Gets a Marketing Makeover,” Adobe Case Study, 2014, http://wwwimages.adobe.com/content/dam/acom/en/customer-success/pdfs/sephora-case-study.pdf.
Yory Wurmser, “Loyalty Marketing,” eMarketer, February 2016.