Why data is the future of bricks-and-mortar retail
Wednesday, May 20, 2015/
There is no denying traditional retailing is changing dramatically with the rise of digital. Bricks-and-mortar operations have changed forever as digital innovations provide both the power and the promise to transform and invigorate the traditional retail experience.
Imagine that when a customer walks into a store, a retailer can immediately identify them using beacons and then send them personalised recommendations and discounts based on their recent multi-channel purchase intent and interest searches. In the future, this scenario might even include a virtual reality or robotic personal digital shopping assistant and a biometric payments system with tailored loyalty discounts.
And it’s not just the potential for a ‘push’ of information and services to consumers. Retailers will also be able to identify a consumer coming into a store and will be able to gather information and insights into their retail preferences to help shape future marketing efforts and improve in-store and online retargeting initiatives.
It is all a matter of convergence – first of technologies and then of customers’ data drawn both from the on- and off-line world to effectively engage and target customers in real-time, 24/7.
While the future aspect of that scenario may seem a little far-fetched at present, a cross-channel approach to retail is fast becoming the expected norm. Forrester was the first research house to identify the concept of the ‘always addressable customer,’ outlining in its 2012 report that two thirds of all Americans under 45 are always addressable. Since then the further rise in smartphone penetration has blurred the lines between the physical and digital retail experience with alarming speed. This brings with it challenges but also immense opportunity for reinvention by retailers and their marketers.
Smartphones have been considered the most significant driver of retail disruption to date but it’s increasingly clear a number of other nascent technologies (as applied to the retail world) are also promising to revolutionise the industry, including RFID, biometrics, voice recognition, beacons, GPS, 3D printing, virtual reality, robotics and even MRI.
While some of these technologies will ultimately be widely adopted by the industry – and some will ultimately fall by the wayside – one thing is certain: customers, information and products will become increasingly, continuously and inextricably linked. And in turn this will drive and enable a single, connected and always-on customer experience for consumers.
That means the clock is ticking for retailers. They need to work out how to best gather, organise and manage the vast amount of data available to them from the multiple and emerging channels in their offline and online worlds, and harness it all to secure insights that will enable dynamic marketing and in-store innovation. In short, they need to navigate their way towards establishing a real-time single unified view of each of their customers so they can engage with them, whoever they are and wherever they are, at scale and with certainty.
This will not only be critical for activation of campaigns and initiatives but also for measurement.
Today, marketers often don’t accurately measure cross-channel campaigns because they are unable to attribute a customer’s behaviour to certain channels. For example, many marketers are not collecting sufficient mobile data, or aren’t merging mobile data with web data. As a result, they can’t know with certainty whether a customer engaged with mobile or with both mobile and web, or which of the two channels triggered conversion. Without measuring and matching the right data, it is impossible to create accurate customer profiles from which to measure their efforts or construct marketing campaigns.
A single unified view of the customer makes it possible for marketers to see the impact of, and understand the influence of, each channel on customer behaviour and provide insight into the route to conversion. This type of window into the consumer journey has the potential for huge upside in enabling retailers to properly allocate media spend in a fragmented market that is only getting more complex. A unified data layer is a game changer in helping unravel and track the individual strands of the path to purchase and consequently invaluable as we move to a re-imagined retail landscape.
Put simply, a retailer’s future ability to deliver a positive consumer experience will be wholly tied to its ability to connect the many disparate data points across the customer journey.
With huge innovation ahead retailers need to find a way to manage their data with a future-proof solution so they can easily and simply integrate new technologies and solutions as they emerge.
Think of it as survival of the fittest. Those retailers who are single minded in pursuing a single view of the customer stand to win the game.
Warren Billington is managing director of Signal in Australia, New Zealand and South East Asia.