Retailers are endeavoring to improve customer experiences by prioritizing content personalization, connected experiences, and campaign orchestration as part of an overall trend in digital marketing strategies, according to Adobe’s Digital Marketing Survey 2017.
Winning the race for delivering better customer experiences requires the ability of retailers to collect, analyze, and operationalize data in order to create relevant and personalized content. The survey found that more than 45 percent of retail companies plan to invest in the structure, people, processes, and tools associated with digital marketing maturity.
Optimizing your content requires a good understanding of your customers, says Jamie Anderson, executive of experience and strategy at ICF Olson, a digital marketing agency. “Think like your customers,” he says. “Get out of your chair and go into your stores and watch what happens.”
The percentage of retail companies in this year’s Digital Marketing Survey that view themselves as advanced in terms of digital maturity was 25 percent — about on par with the overall industry average. Digital maturity is an indicator of a company’s technical skills, use of automation, and level of data integration.
A recent report from Gartner also notes that large retailers are also using artificial intelligence (AI) to leverage “big data” for customer-centric marketing and merchandising, and to power customer-facing bots and virtual assistants.
Walmart, for example, is using machine learning to help deliver better customer experiences. The retail giant is also using technology as a bridge between their online and in-store ecosystems. “We want to make sure there is a seamless experience between what customers do online and what they do in our stores,” Lauren Desegur, vice president of customer experience engineering at WalmartLabs, recently told Forbes.
Other retailers, such as J.C. Penney, are using machine learning to automate online marketing to display personalized, targeted marketing messages that are driving sales conversions. While J.C. Penney continues to struggle with its brick-and-mortar stores, the ability to use customer data and predictive analytics for laser-focused marketing helped J.C. Penney grow online sales by 17 percent last year.
Overall, according to the Digital Marketing Survey, more than 63 percent of retail services marketers view their companies as either advanced or focused in terms of digital maturity. The survey, which is designed to reflect the pace of the digital marketing transformation, included marketing leaders from North America and Europe. According to the survey, marketers across all industry sectors that categorize their companies as advanced in terms of digital maturity more than doubled between 2016 and 2017, from 11 percent to 24 percent. That means a quarter of the 1,165 marketers surveyed believe their companies are transforming their business processes in order to better understand and use their data.
By contrast, retailers reported no significant change in digital maturity over the past year. But, overall, 81 percent of retailers surveyed said their digital marketing efforts have resulted in at least some differentiation for their brands.
Looking ahead, retail brands are focusing on email marketing, CRM, mobile technology, and analytics in order to better connect with customers and to differentiate themselves from their competitors.
Email marketing and CRM are still priorities.
Retail companies are particularly interested in leveraging email marketing to connect with customers across platforms and devices. According to the survey, priorities for email include personalizing email content (41 percent), using responsive mobile email (39 percent), and leveraging dynamic content in emails (32 percent).
RS Components is indicative of how retailers are leveraging the power of email. Part of the UK’s Electrocomponents PLC, RS Components is using data gleaned from web analytics to develop and deliver personalized messages to customers and prospects.
Across the retail sector, companies are also focused on better use of CRM data (36 percent), automated personalization (34 percent), and integration of analytics across channels (31 percent). More retail companies are also intent on making their content more personal and engaging, with 55 percent of retail companies using automated personalization technology for mobile, and 49 percent using automated personalization for web-based content.
When it comes to specific metrics for assessing customer experience, conversion rate is the preferred yardstick across industries — with about half of all companies using it. For the retail sector, customer retention is the number-one metric for measuring the impact of digital marketing on customer experiences.
Mobile bridges digital and in-store experiences.
Retailers also are embracing mobile technology strategies as part of an omnichannel approach to optimizing customer experiences. “Overall, whole customer views continue to be the most important digital marketing strategy across industry sectors, but audience reach, mobile app engagement, and mobile app analytics are all gaining in importance,” says Michael Klein, director of industry strategy for retail at Adobe.
Macy’s is an example of a digitally mature retailer that has developed a mobile tool to improve customer experiences, online and in person. The Macy’s app helps customers visiting a store by offering relevant information about specific product location. Meanwhile, grocery retailer Waitrose is focused on improving the in-store shopping experience by providing direct assistance to customers through its own customized smartphone app.
As Michael notes, 90 percent of retail sales in the United States still occur in physical locations. But, he adds, “56 percent of all retail is influenced in some way, shape, or form by digital.”
Mobile technology has emerged as a powerful tool for bridging online and in-store experiences. For example, with proximity technology, a retailer can identify when a customer is near a physical location and deliver a personalized message to drive that person into the store. “Based on all the information a retailer knows about you, they can deliver an optimized, personalized offer to hopefully get you into a store,” Michael says. “It also is possible to connect the digital and in-store engagement to create a seamless customer experience across all touch points.”
Leveraging data and analytics.
The ability to use proximity technology for real-time marketing underscores the importance of harnessing integrated data, including everything from customer purchasing history to browsing preferences. One common denominator in digitally mature companies is often called a “whole” or “360-degree” customer view. Developing a complete customer perspective, a 360-degree view, is achieved by integrating and acting on data from across the spectrum of customer interactions.
Getting a handle on data analytics is the key to optimizing personalization. “One of the challenges for retailers is to really understanding how to get a full understanding of who their customer is and what they want,” says Michael. “The ability to personalize goes back to the ability to understand who the customer is. If I don’t know who you are, I can’t customize content or experiences for you.”
In order to refine those targeted marketing efforts, retailers need data to measure effectiveness. Real-time data analytics is increasingly important to marketers across all industry sectors, with 40 percent of companies already leveraging data metrics as part of their digital marketing efforts. Integration of analytics across channels (38 percent) and predictive analytics (34 percent) are also important technology tools.
As the 2017 survey results indicate, retail marketers are using data and analytics to better understand their customers. “We have all these wonderful tools and quite a bit of data on customers,” says Jamie. “But delivering a good customer experience requires a company armed with the right data and information to treat people as people. That means the business, user, and technical requirements are all developed from the perspective of empathy for customers.”
That ability to really understand who your customer is can help drive a highly personalized content narrative. “At the end of the day,” he says, “digital marketing is all about how you find the right person at the right time and place, so that you can deliver content or functionality that is meaningful to them. It sounds simple, but retailers have to remember that we are still in the people business.”
Learn more about implementing data targeting and analytics tools that will help your company become a more digitally mature enterprise, and read more in our #DigitalMarketingStudy series.