Data the key to Christmas cheer
While songs on the radio might contend it to be the most wonderful time of the year, Christmas can be a very stressful period for retailers. Competition is fierce and tough calls need to be made on pricing, stock, and staffing levels. Under the shadow of economic uncertainty, this Christmas is likely to be even harder. The British Retail Consortium (BRC) is predicting a gloomy festive period and data from IHS Markit and Visa already shows that spending dropped by 2% in October.
In order to try and generate a bit of festive cheer for the industry, retailers will be thinking about how they can make the best of the season. But beware: putting too much focus on one time of year when it comes to customer acquisition is a slippery slope. Sales aren't just for Christmas, after all.
The fact of the matter is that there are many effective customer acquisition and revenue-generating strategies that can be put into practice all year round, but to do this well requires a strong grasp of customer behaviour and shopping habits. Consumers are now using more touchpoints than ever – both online and offline – meaning retailers have never had so much access to real-time data about consumers. These unique data footprints are a gift for retailers, as long as they are in a position to effectively harness the data, analyse it and derive actionable insights.
Unfortunately, the data that retailers collect from various online and offline channels often remain siloed. Fragmented internal systems simply aren’t capable of making the necessary links between data and channels. This is highly problematic as it means there may be multiple views of the same customer, making it difficult to make sense of their shopping habits or to communicate with them effectively. This often results in time and marketing budget being wasted – the wrong people are targeted, or channels that offer only a low chance of conversion are used. Further, getting competitive intelligence is still the path to attracting new customers in any retail category, but not many retailers invest in the technology to get and utilise this data.
So how can retailers overcome the challenges of data disparity to ensure they are targeting the right consumers at the most opportune moment? It’s all about the creation of smart retail environments where all of the data relating to an individual customer’s journey can be accurately mapped. AI-driven data intelligence platforms can collect and analyse data about online and offline purchasing behaviour, social media activity, location, credit scores, and WiFi usage. The 360-degree view of the consumer that can be generated from these data maps are able to provide rich and deep insights into an individual's actions, preferences, and behaviour – all in a non-personally identifiable (PII) way.
A smart retail environment can also help retailers to make better business decisions using data from their own consumers and those of their competitors. For example, we can analyse data from high street competitors Primark and New Look to find out why Primark’s sales are up and New Look’s sales are down by 8.4%. We can find out that Primark has 61% more visits from 18-25 year olds than New Look, receives a higher average daily footfall, and has twice as many female visitors in comparison to New Look’s male dominated walk-in rate. From a sales and marketing perspective, New Look could utilise this data to better appeal to female consumers between the ages of 18-25 years and to encourage walk-ins through discounts and offers.
Retailers that want to better use data intelligence to improve their customer acquisition strategy need to follow some key principles. Firstly, they need to have a cohesive approach to unifying data. It is vital that the technology they use is capable of unifying multiple real-time identifiers across channels and identifying every individual if they want to gain a unified picture of their consumer. They also need to tailor this approach to gather as much data as they can on their competitors.
The second key principle revolves around the attribution of data. Too often, performance is measured solely via methods such as last-touch attribution. This approach ignores the complex nature of modern paths to purchase. It is vital for retail brands to utilise tools that provide a comprehensive understanding of effectiveness. The easiest way to achieve this is by syncing attribution data between online and offline channels, and merging it with consumer insight.
The final key principle is that of data accuracy. The right technology partner will enable retailers to make sure the correct data streams have been unified to create a true picture of the consumer. A robust approach to source verification and cross-device comparison is required, using data in real-time. It is also vital to constantly refresh, assess, and merge data streams to minimise the risk of duplication or inaccuracy.
Customer acquisition is a constant challenge, and retailers need to know what their consumers’ preferences and actions are throughout the year. The right technology partner can help retailers to master the art of acquisition by building a holistic picture of each customer and deriving useful, actionable insights from their data. This enhanced understanding can enable retailers to effectively connect with their consumers throughout the year – not just at Christmas.
Also published in Retail Technology