For many retailers Christmas wasn’t the consumer “spend fest” they’d hoped for. And, according to the KPMG/Ipsos Retail Think Tank, lower spending will continue in 2016. So retailers are being urged to get smarter if they want to keep the tills ringing. Here are 5 rules from a “Big Story” in a pre-Christmas issue of Retail Week, along with the addition of our own number 6;
1. Without customer-specific transaction data you're travelling blind
A failure to collect data means that most have no idea who their best customers are and whether they also buy online. And, with the cost of collecting it plummeting (mainly down to the replacement of card-based loyalty schemes by mobile apps) there’s really no excuse.
Retailers that don’t have full visibility of customers and the ability to target and manage them across channels will find themselves distinctly disadvantaged and continuing to operate on a “best guess” basis.
2. Chief Executives must be tech-smart
Peter Drucker famously said that “Marketing is too important to be left to the marketing department”. The same could now be said for IT. Change in tech is so fast, and often so fundamental, that the C-Suite needs understanding, ownership and, perhaps most importantly, agility when it comes to embracing technology driven innovations.
3. Multiply the bang you get for your marketing buck
The “one offer to many” promotions of the past have no place in modern retailing. They’re not just risky but wasteful of resources, budget and opportunities. Winning retailers will need to replace these blanket offers with those tailored to individuals and their preferences/buying patterns/history. Personalised direct mail, rather than the static printed coupons of old, along with e-coupons are much more effective often hitting 10%-15% redemption rates.
4. Develop a single view of each customer
Whether they’re “bricks and mortar” customers, prefer an online shopping basket or opt to transact via a mobile app, “seeing” the customer holistically and as one rather than separate entities is crucial. Recognising an online browser who goes on to become an offline purchaser will potentially avoid repeat (or even contradictory) promotional messages and make for a better, joined-up customer journey and brand experience.
5. Get out of your bubble and join the dots
Acknowledging that consumers are more than just customers and understanding their needs and desires beyond the retailer’s own product offering means recognising them as part of a wider “ecosystem”. For example, a fashion retailer that has insight into the music and leisure interests of his customers has the edge over his rivals. Data-driven, customer-centric retailers play a much broader role in this ecosystem and, with this intelligence, potentially the ability to tap into the marketing budgets of his supply chain.
6. Deliver a single brand view
Consumers are “channel agnostic”. They expect consistency across different products and interactions whether in store, online or viewing a catalogue. The “look and feel” and the entire experience should be the same whether he is buying online, in store or by click and collect for the next day. And that needs to extend across everything - advertising, digital communications and direct mail as well as displays, PoS and packaging.