In recent years, the Internet and e-commerce have revolutionized the retail market. Beyond the ease of buying or consulting advice from other consumers, e-commerce has mainly changed the way of capturing information about the purchasing process of a customer on a custom basis.
Retail and customer knowledge, boosted by e-commerce
For example, the e-commerce buying process allows businesses to know how a particular customer arrived at their website, what the customer bought, related products that were searched, and other recommended products to purchase. This reconstruction of the customer journey was extremely difficult to achieve when the only purchase channel was a physical store and the only trace element was the purchase. At best, the customer was only identified at checkout, which forbade the provision of personalized recommendations during their shopping experience.
Now, with a better understanding of the customer experience, e-commerce has opened the opportunity not only to better understand customer behavior, but also to react in real time based on these behaviors. Due to the success of such programs, retail professionals have begun to apply these concepts to all sales channels – in stores, call centers, etc. This has doubled the current challenge in the retail business. Now retailers must fully understand the customer experience through various sales channels (multi or omni-channel), while benefiting from greater accuracy, including the physical outlets.
The answer is not so simple …
If a customer makes an in-store purchase, the knowledge obtained by the seller is not the same for every purchase made. The only way to recognize a return customer is through the use of a loyalty card or at a minimum, if the customer has already visited the store. However, if a second purchase is made, without the use of current technologies, it would be extremely complex to link with past purchases.
Similarly, a website can collect purchase intentions, but it is extremely difficult to correlate these events with purchasing transactions if they are not made online in the same session. The stakes are high, given that 78% of consumers now conduct research on the web before making a purchase (the famous web-to-store or ROPO).
Big Data brings businesses closer to the best consumer habits
One solution, is to integrate indicators at various stages of the purchasing journey of a customer, and then analyze their journey thru the use of big data to gain knowledge of their buying habits. For example, we often see customers research Internet retail sites during the week to prepare for shopping on the weekend.
If the customer has a wireless device with self-service associated with a mobile application for customizing the customer experience, the store can send notifications to the customer while they are shopping at a store location to influence their purchase. This influence could be offering additional discounts or promotions while they are shopping in the store or at the time of purchase.
Some of our customers are already largely involved in this process, which is done gradually. The process starts with a very detailed analysis of the online customer experience to collect information of intent, across an aggregate level with actual purchases at a catchment area for example, to determine correlations and refine the segmentation.
Then, the information is crossed with transactional data in physical stores and website, which allows customers to create a path from the intent to purchase to various purchase channel options. Thirdly, we develop a real-time recommendation system throughout the customer journey that has a double effect: it helps sell more and retain customers better.
The main challenge of the future for distributors actually lies in the value added services they will or won’s be able to provide their customers by supporting their products or services. The customer has learned to be wary of digital information. Often, customers create specific emails to receive emails that do not reveal their true identity, to protect against future solicitations. Customers are less inclined to share their personal information until they have confidence and see benefit in the information being provided.
How do we build this confidence? Through value added services. When the customer receives an offer that is of interest, they do not feel forced or locked in commercial logic to make a decision. Retail websites can help customers build their shopping carts by guiding them through a selection of products based on personal criteria.
For example, sites enabled with these additional services can remove products containing peanut oil since the customer has indicated their son has a strong allergy. In retail, the customer experience can be mapped by using information provide in their user accounts. Amazon’s “1-Click” command paved the way for using information like this to improve their customer’s experience. In other sectors, such as taxis, businesses have further revolutionized the customer experience through the use of digital technologies. These technologies are now allowing customers to research payment options for services, and automate the capture of expenses for later use.
In a world where advertising and tracking are increasingly present, data analysis in a single business transformation objective is ultimately doomed to failure because it is based on an imbalance between the customer and the supplier profit. So far, customization in retail tends to be limited to marketing and is measured in conversion rate, apart from distributors, more and more, which have relied heavily on loyalty.
Multichannel is not an invention of the distributors, but a reaction to consumer desires. Think about it even Amazon, the Internet pure player par excellence, has begun to open physical stores. Why? Because they understood that essential element was missing in their bid to complete the knowledge of their customer’s journey.