How Retailers Can Provide Personalized Shopping Experiences–Anytime, Anywhere.
There is a problem with which traditional retailers are struggling. Their competitive landscape is increasingly brutal with the advent of online competitors and rapidly evolving customer expectations. To make the problem worse, retailing has now become a 24×7 business, instead of the traditional store hours of 9 to 5, with it the definition of what a “store” is. Physical stores, web-sites, kiosks, smart phones, and even social networking sites are now considered “stores.” These changes are creating a new generation of consumer who demands a unique conversation, unique in that it’s contextualized for them, from retailers across multiple channels in real time.
Say Hello to the New Consumer
So what can retailers do to drive revenue through new channels and keep ahead of their competition? The 21st century customer is all about the experience. Retailers need to differentiate themselves through unique customer experiences to build loyalty; they also need to link business processes like inventory optimization, pricing, and supply chain to provide real time “levers and switches” to maintain optimum business performance by adjusting the rules and constraints as market conditions change. In order to get this level of personalization, customers are willing to “opt in” and provide a little bit of information about themselves (location, buying patterns, behavior) so that they can expect the customer experience aligned to their specific needs.
What is this Context and how do Consumers Want you to use it?
Context is the combination of Time, Relevance, and Behavior. With context, a retailer can be expected to:
Respond TIMELY – When am I interacting? This may be now, while I’m in a store/website. This may be later, when it’s been a while since I thought about your brand – a timely reminder.
Focused on RELEVANCY – Give me coupons, messages, offers, alerts specific to my shopping profile. It should relate to who I am and what I have done. And sell me what you can deliver.
Based on BEHAVIOR – I browsed your website for certain item recently, but I usually buy the item at the store. Can you help me find that item in store by sending me a text on my cell-phone? What have I done before and what am I doing now? A combination of prior and current action is crucial to understanding intent and preference. Don’t send me stuff I’ve previously refused – it’ll only annoy me.
It’s Time to Think Different
Some of the traditional channels like mail, television and catalogs are diminishing in relevance as customers are moving to different channels for media consumption: channels like SMS, email, Facebook.
The old “spray and pray” approach of handing out coupons via newspapers/Groupon and Google doesn’t provide the visibility and response you need to ensure that offers do drive the additional revenue expected by the retailer. If a specific customer has shown a propensity to buy a certain item at full price (for example, a specific brand of lawn mower), a retailer should be able to detect that in real time, and provide offers for related items (like perhaps, weed-killer) that he has not bought before: help the customer extend and “complete” the purchase.
That said, some highly targeted offers and messages continue to be extremely effective using traditional channels. This shouldn’t be overlooked; it should be included in the context. However, what’s changed and is changing at a very fast clip is the customer’s tolerance for “context delays”. Customers now expect very little latency between an action and the incorporation of that action into their context. As said previously, activities like price optimization, inventory management, store operations and loyalty programs all have to be linked in real time to enable appropriate pricing, offers, and service to customers.
In order to achieve success, retail solutions need to consist of the following components:
- Accurate, clean, and contextual customer/product data
- Analytical capabilities that allow identification of relevant patterns – traditional demographic analysis doesn’t really work anymore
- Creation of contextual offers based on analysis
- Execution platform for contextual customer management
- Capabilities to optimize contextual offers based on real time analysis of production data
- As this drives more activity, elastic deployment platform that grows/shrinks with this activity
Stay tuned for part 2 of 2 of this series where I will discuss in detail how device-based technology is increasing visibility and insight on exactly where an item is in the supply chain and stores, and how to achieve what TIBCO calls “the 21st century platform” that can achieve your customers’ expectations and so drive revenue.