How to use better data to put customers first

There’s a lot riding on the single customer view. In the ever-changing world of retail, it’s becoming a key way that retailers can differentiate. By understanding customers better than competitors do, retailers can make the entire buying journey more attractive – from the way they send out communications, to the offers they give individual customers.

James Knowles, Acting Head of Commercial Content Operations at Retail Week, presented at Microsoft Future Decoded 2017, giving the results of research around retailers, data and the single customer view. After surveying 70 chief marketing officers, Retail Week found that only 8.6% of respondents said they have achieved a single view of the customer, while 15.7% think they’ll get there in a year. However, one in five said they’ll never achieve this.

When a single customer view is deemed so important, why are this many CMOs saying it’s never going to happen? Well, it all comes down to data. How you gather it, how you manage it, how you handle privacy needs and regulations, and how much your customers are willing to give you.

Better data – not just more

61% of the respondents to Retail Week’s research said that better quality data would help improve retention and loyalty. And then retailers can use this better data to underpin strategic decisions and improve market performance.

At this year’s Microsoft Future Decoded, we heard how better data solved many problems for one customer, retailer N Brown Group. With roots as a mail-order company, N Brown Group is now a successful e-commerce company – all thanks to data. Using the Celebrus data collection tool from Microsoft partner D4t4 Solutions, N Brown Group understands its customers in an advanced way. Celebrus collects a rich set of data from a variety of sources. Across all digital channels, it collects everything that shoppers do on a website, from the tabs they open to the clicks they make.

Consumers are driving a lot of the innovation in retail. They’re now more value conscious, they’re always-on, they’re socially engaged, and they’re channel agnostic. And this is making it increasingly difficult for retailers to differentiate on the traditional factors of price and location. The competition now lies in knowing the customer better than other retailers do. In having the ability to make business decisions at the speed of light. In understanding customer behaviour, desire, intent, preference, and lifecycle. In having a single customer view.

And this is exactly what Celebrus enables N Brown Group to do. If, for example, a customer views a pair of jeans, N Brown Group can send an email that’s timely and relevant, with the right content and context. And when using a combination of transactional and web data – rather than just traditional emails – N Brown Group sees sales per email increase by 25%.

The better use of data has meant that N Brown Group can not only react to customer wants and desires, but also predict what they’ll want next. They already used a predictive model, scoring around 75% accuracy. But after using web data to bolster this, the retailer increased accuracy to 93%. This predictive modelling – machine learning – also shows them who to market to, showing who responds well and who doesn’t, saving them from wasting money on those who never engage. The team removed the bottom 10% of targets, and improved return per contact by 8%.

Seizing the data gives retailers like N Brown Group the power to understand their customers even better and interact with them in a way which delights them.

Data, Black Friday and the Golden Quarter

With Black Friday and the Golden Quarter on the way, we spoke to James Knowles at Retail Week about how important data is at this time of year. It’s key to have robust data management and insight, as it could be the differentiating factor between a customer buying from your store – or your competitor’s. if retailers aren’t using data insight in the right way to target their customers appropriately, they could miss out on the sales. Retailers should be using data insight to do everything from personalisation to stock management.

Retail Week asked 70 business leaders about the sort of data they’re collecting, and what they’d like to collect. And while the data they’re capturing – names, ages, addresses – helps retailers build demographic profiles, it’s still basic. It doesn’t tell them what their behaviour is, or what their attitudes are towards the business. So, the next stage for retailers is to look at how they can get data about attitudes, behaviours and lifestyles.

During the Black Friday and Golden Quarter period, Retail Week emphasise how important it is to use data to have a single view of your customer, and a single view of your stock. Putting both views together lets you target customers with appropriate messaging, then offer them products that you know they can buy. This comprehensive view of your stock and your customer will let you deliver the best possible customer experience.

While this year’s Black Friday and Golden Quarter are coming up too quickly to make major changes now, there’s a number of things you can do for next year. James recommends that retailers should look at how you can drive data management throughout your entire business. Some retailers are doing this by appointing a director of customer insight, a CIO, or a Chief Customer Officer, to help drive the message from board level down through head office and into stores. But it must involve putting data at the heart of strategy, and then giving it the resource to function properly.

Putting data and technology first

So, the data is there. It’s available and it’s ready for retailers to use. The question is, will you get there first, or will your competitors? Knowing and understanding your customers is key to staying ahead. You need to know them across every channel and in any store, you need to know how they like to shop, when and how they want to talk, and what sort of goods they’re interested in.

To make this single customer view happen, retailers need to put data at the heart of their strategies. This may be through a cultural change, or appointing a chief data officer. It’s likely going to involve technology investments, and an update to processes and policy.

At Microsoft Future Decoded, we heard from Andy Foley, Head of Retail Business Systems at Specsavers, who showed us how the global company has put technology and data first. Specsavers works with Microsoft partner, MPP Global, to enhance and upgrade the company’s subscription services.

Andy confirmed that customers are now driving the need for change, saying they expect a next day/same day Amazon experience. Doing nothing was simply not an option. Specsavers must grow to maintain their market leader status, and system change is an enabler in growing a business.  His advice was to be inquisitive and don’t be afraid of the start-up. To speed up change of this nature takes time, but it’s crucial to drive momentum.

Another of our partners, Blue Yonder, emphasised the importance of data in aiding decision-making around merchandising and supply chain. Working with a leading supermarket chain, Blue Yonder implemented an impressive supply chain solution, using AI and cloud technology, that has improved a key business metric: on-shelf availability. The system is in all 500 stores, with daily decisions for over 26,000 SKUs, based on store-specific historic sales data incorporating seasonality, events, weather data and promotions. It has resulted in a 30% reduction of shelf gaps in stores, without increasing waste and mark-down. As well as increased workforce efficiency, reduction of missed sales, and an automated manual ordering process, the solution has meant less stockholding in stores and a YoY increase in sales.

With the right technology and a rich data set, retailers can create digital engagements that are personal, contextual and relevant. They can base their understanding on purchase history, demographic information, location, time of day, preferred channel, product information, and other data sources. With this, retailers can:

• connect with customers at the right time, via the right channel, with the right offers.
• give sales associates the customer data they need to deliver personalised in-store experiences.
• predict what customers want before they act on it, using predictive analytic solutions.
• let customers add items to a cart from any digital touchpoint in the shopping journey.
• improve, shorten and transform the customer journey.

Watch this on-demand webinar to hear more about what you can do in retail with the right data