Retail experiences begin with knowing your customer.
“If you want to create connections with customers at any level, you need to understand who they are. You can’t understand them without the data.”
Emotionally connected customers have twice the lifetime value as highly satisfied customers, according to research published in the Harvard Business Review. These emotionally connected customers not only buy more products and services, visit more often, and exhibit less price sensitivity, they also pay more attention to a brand’s communications and recommend the brand more often.
Yet since most paths to purchase look more like a maze than a straight line, gaining an understanding of who your customers are and what experiences drive them to purchase requires multiple types of data.
“Analytics is really the backbone of helping us be quantitative in our understanding of our customers,” said Mike Amend, former vice president of online at Home Depot. “[Data is] helping us understand what our customer journeys are, helping us understand what are the friction points or the fallout points of customers as they’re interacting through our experiences.”
Retail giant Target has seen the value of data in connecting with their customers on an emotional level. For over a decade they have used data to better segment and personalize their marketing efforts. As a result, they’ve built empathy with their customers by providing offers and coupons that align with significant life events such as a move or a marriage. And data is still fueling Target’s growth today as the retailer evolves to meet its customers where the data says they are — and that’s increasingly online. In 2016, according to Internet Retailer, Target’s online sales rose 23 percent year over year in the first quarter compared with a year-earlier rise of 38 percent.
As Target’s escalating online success shows, a good data strategy should go beyond just knowing who your customers are and what they want, to knowing how and where they interact with you. In fact, research in the Harvard Business Review shows that customers who engage in an omnichannel experience are much more emotionally connected and thus consistently more profitable.
Research highlighted in a Retail Week article indicates that shoppers now expect retailers to “know” their digital journey when they enter a physical store. About one-third (32 percent) of shoppers in the survey said they expect the stores they visit to know what prior research they’ve done on the retailers’ websites and apps — including their wishlists, abandoned carts, and related social media activity — so they can receive better service.
For retailers like Home Depot, leveraging the virtual alongside the physical is critical to delivering the relevant experiences to their customers. But they can only do so when they have the right types of data — both real-time and cross-channel.
For Home Depot, real-time data has allowed them to quickly and inexpensively get feedback on what types of offers or content are most relevant to customers. It has also helped them to “know” what their customers wants in the moment. For retailers like Home Depot, their mobile device app could automatically sense that a customer is in the appliance department and tailor an experience based on location — perhaps offering free delivery and installation on appliances.
When a customer adds products to a shopping cart on a smartphone, they expect that the same browsing history and shopping cart will be accessible even when switching to a laptop or tablet. Yet despite consumer expectations for a seamless cross-device shopping experience, delivering on it is not so easy. Without cross-device data, retailers find themselves with inaccurate conversion data, poor conversion attribution, and incomplete segmentation groups — leading to inconsistent or depersonalized experiences for the consumer.
Retailers can overcome this hurdle in some instances. On sites that require the customer to log in or “authenticate,” it is possible to determine which devices connect to which customer. However, rather than create more authentication events, retailers can join a device co-op — where members pool their data on device usage. Such a resource provides retailers with a powerful opportunity to gain information about their customers, and not just the device they’re using. Equally important, because only “the link” between devices is shared, not user profiles or site-visit data, customer privacy remains protected.
A device co-op not only helps brands recognize familiar consumers using unfamiliar devices, it provides the ability to connect the dots between interaction points on a customer’s digital journey. As a result, retailers can deliver consistent and personalized experiences to a person, not a device.
“Cross-device stitching gets really exciting when you move beyond focusing on user traits and begin tracking a customer across their day, serving them new and relevant content through device-level personalization.”
For many retailers, silos created by departments are a roadblock for unifying data, as are large legacy systems that spread data across all different parts of the business. Breaking down these silos isn’t easy, but you need a single view of the customer in order to know what content will deliver an emotional connection.
According to Econsultancy, less than 30 percent of marketers use call-center data to map and track website visits and customers who are engaging both online and offline. Yet knowing both offline and online data and how it fits into the full customer journey is critical to gaining a complete view of the customer.
Consider a customer who makes a one-time golf club purchase in a sporting goods store and then continues to receive promotions for golfing equipment by email. Future content offers are guided by this single data point (the in-store purchase). However, in this instance, the club was purchased as a gift — the customer isn’t even a golfer — so the email offers are irrelevant.
When you can unify all your data into a single view, you have a complete picture of who your customer is — at all times and on all devices. And from this evolved vantage point, you can deliver the types of experiences your customer wants — driving loyalty and increasing revenues.
Yet, overwhelmed by the challenge of collecting and connecting data, many marketers have taken a step back rather than forward in their data-driven efforts. According to Econsultancy, the perceived opportunity for data-driven marketing has declined from 16 percent in 2016 to 12 percent in 2017.
“The Art of Integration,” Adobe, 2016.
Christopher Ratcliff, “More Than 40% of Online Adults Are Multi-Device Users: Stats,” Econsultancy, March 7, 2014, https://econsultancy.com/blog/64464-more-than-40-of-online-adults-are-multi-device-users-stats/.
“Empowering Customers Through Digital at Home Depot,” Adobe Experience Cloud, June 15, 2015, https://www.youtube.com/watch?v=uxRsAXGCnL4.
“Home Depot Execs Discuss Future of Retail, Smarter Home,“ Home Depot, August 2, 2016, https://corporate.homedepot.com/newsroom/home-depot-execs-discuss-retail.
“How to Build the Right CX Strategy,” Forrester, January 10, 2017.
Sandra Guy, “Target’s Q1 Ecommerce Sales Account for a Growing Share of Revenue,” Internet Retailer, May 18, 2016, https://www.digitalcommerce360.com/2016/05/18/targets-q1-e-commerce-sales-account-growing-revenue-share/.
“Understanding the Customer Journey,” Econsultancy, April 2015, https://econsultancy.com/reports/understanding-the-customer-journey/.