DECODING
DATA-DRIVEN
RETAIL
With businesses being increasingly driven by data, the future of retail will be deeply wedged by how brands manage personal data trails, left behind by shoppers at different touchpoints.
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Miranda has just realized that no matter what she does online-whether it’s checking email, social media, or just surfing the Web-she is constantly bombarded with ads based on the contents of her shopping carts. What seems like an inexplicable invasion of privacy can be traced back, to her purchasing behavior. She recalls that a couple of weeks back, she had ordered a luxury watch online for her husband as a surprise anniversary gift. She had browsed a few websites searching for the right brand, price and also read a few reviews before making the purchase. Since then, she has been stalked by online retailers peddling similar products.

If you have shopped online in recent years, Miranda’s story should sound familiar. Brands are desperately trying to collect data from both their current shoppers and potential customers, hoping that some of it will be of value. Their data-hungry websites use the information gathered from visitors’ search logs and browser histories, including the trails left behind at storefronts and other digital touchpoints, to push their advertising without evaluating its impact or relevance. But what happens when the consumer has already purchased the product and continues to be bombarded by the same ads?

The effort becomes more like a shot in the dark. Shoppers have the right to feel irritated. This is where synchronization of data comes in, and this is where the online retailers perhaps went wrong in Miranda’s case.

While the growing volume of customer information is good for business, this data-mining frenzy is only worth the trouble when it is managed well and is appropriately targeted. This means that in order to drive the biggest results, the focus should not be on aimlessly collecting data but rather about finding something valuable. Determine what questions you want your data to answer, then quickly dump what is irrelevant or has no tangible answers on how it will impact business outcomes.

Brands should be developing insights into what motivates customers to buy, their decision-making process and how to provide them with personalized shopping experiences. Brands must also learn to master the art of subtlety in reading this immensely complex data, in order to discreetly influence buyers as they steer their path back towards the shopping cart.

UNLEASH THE POWER OF THE CONSUMER

Many customers like Miranda do not have problems sharing their personal data or having their shopping habits tracked-if it leads to a better experience. In return for their data, they now expect personalized services and relevant communications from retailers that are convenient, contextual and on-demand, across all touchpoints and segments.

Despite so many recent developments in retail, one thing that has yet to happen is the convergence of both online and offline platforms. Both continue to operate in two different worlds, even when selling the exact same merchandise from the same company or brand. For instance, if a buyer makes an online purchase, there are instances when a customer is refused to be served offline. This doesn’t normally go down well with customers. They increasingly want a blend of the two, regardless of channel, for maximum convenience and choice, in real time and at scale.

According to the Planet Retail study, ‘The Power of the Individual-Unleashing the Power of Me’, retailers are recognizing customers’ desire for a seamless online-offline experience, which is achievable by digitizing shopping experiences across the board.

TIP OF THE ICEBERG

Most retailers interviewed identified the challenges inherent in forming a unified view of shopper interactions, even though it would help them better understand customer activity across channels. It is difficult to achieve because in several instances, retailers are able to access only fragmented customer data, which limits their ability to do anything with it. Without clear data, achieving consistency and personalization becomes enormously challenging. Before they can deliver enhanced customer experiences, retailers must master the basics, such as optimizing assortment mix, fulfillment options, and product availability, both in-store and online-and the basics still give many of them trouble. Unless retailers are able to clear these bottlenecks, delivering end-to-end solutions from demand to fulfillment will be an unattainable objective.

TO DRIVE THE BEST RESULTS, THE FOCUS SHOULDN'T BE ON AIMLESSLY COLLECTING DATA BUT RATHER ON FINDING SOMETHING VALUABLE.

MAXIMIZING SHOPPER EXPERIENCE

Retailers are now compelled to adopt innovative methods to meet the demands of digitally-informed shoppers expecting personalized service and a seamless omni-channel experience. These shoppers are also seeking instant gratification.

There are several available tools catering to this emerging market, which collect all kinds of customer activity data to offer a finer-grained, cross-channel view of customers. However, such capabilities represent only the first step in responding to and targeting them, and are yet to recognize them as individuals. Once that next step is achieved, retailers will be able to track shoppers’ activities and layer that over their personal identifiers to predict what they may be looking to buy-perhaps before they even know it themselves! If retailers can then zero in on their shoppers’ locations, they can use it to further personalize each engagement.

Given the limited information retailers currently possess of omni-channel customer behavior, we can’t expect that they will be ready to deliver truly personalized experiences to individual consumers. Thus, we label the possible outcomes just described as ‘hyper-personalization’-as current average levels of personalization do not go far enough.

DATA COMES FIRST

How transparent and well-informed will brands be about their data-gathering efforts? Both online and offline retailers have to embrace a data-first strategy and make sense of it all to pre-empt customer needs and provide the right product at the right time through the right channel. Only then can they ensure that every experience is seamless for the shopper and also result in more positive business outcomes.

by SANNITA CHAKRABORTY SAHA

//Disclaimer: Certain portions of the article have been adapted from a report by Planet Retail, Powered by Wipro, titled The Era of the Individual: Unleashing the power of ME.
You can read the full report at www.wipro.com//