Customer data platforms (CDPs) and the single view of customer (SVC) were last year's hot topics among retail marketers, particularly those who had already been burnt by various solutions that overpromise and underdeliver. The data is certainly available as marketers track the digital wake of consumers across an ever-expanding frontier of channels and contact points. Yet, many are still left coveting the elusive comprehensive customer profile.
Maybe the abundance of available data is part of the problem. There’s so much focus on how to collect it and how to store it, that most haven’t acted on it yet. What's the value of data if we don’t use it to make decisions and take action?
Marketers are feverishly overinvesting in the digital space, but at least the data is being put to use. In the digital world, it's easier to collect, analyze and execute, so there’s less resistance. Still, it gets more attention than it deserves because the analytics are easy to set up and consume.
Since Amazon.com is primarily in the digital space while its Go stores get going, the retailer's SVC starts with its core Prime account customers who log in and identify themselves — everything you do is attached to your identity. That’s not the case for most multichannel retailers that don’t have the Amazon advantage.
Most people don’t set up e-commerce accounts anymore — maybe 10 percent to 20 percent of consumers have an account on a retailer’s website. People are very concerned with security and privacy, often not realizing that it makes no difference whether you expose personally identifiable information (PII) in a nanosecond or within a secure account.
Even during this digital frenzy and the so called “Retail Apocalypse,” 90 percent to 95 percent of a brand’s revenue still comes from brick-and-mortar stores. Analysts are predicting 2018’s holiday growth with online sales projected to grow 15 percent compared to a 2.7 percent growth for brick-and-mortar. Digital sounds dominant.
But think about the revenue in terms of exact dollars. If you're a $1 billion multichannel retailer with a website that's 5 percent of the business, that’s $50 million. A 15 percent increase is $7.5 million. On the brick-and-mortar side, the annual revenue is $950 million. A 2.7 percent increase equates to $26 million. Therefore, $7.5 million from digital only represents 22 percent of the overall revenue growth during the holiday season.
Now think about the impact we can have on revenue if we move the needle 1 percent on that 2.7 percent growth. Putting more focus on brick-and-mortar revenue can equate to millions of dollars.
New and Original Frontier: The Store
For most retailers, stores are a critical touchpoint that play a major role for the brand and its customers’ experiences. Face-to-face interaction is irreplaceable when it comes to building profitable customer relationships, and customer service is invaluable. It always has been. But the store is the customer touchpoint least supported by this explosion of technology and intelligence.
One major culprit is point-of-sales (POS) systems. They tend to be “legacy” systems that are resistant to change and way too expensive to replace. It’s a technology that has been around, maintained and supported by internal IT for many years. Yet a POS system is the backbone of the organization that supports this most important customer touchpoint.
Unfortunately, our managers and associates are flying blind in their stores. They have no idea whether they’re interacting with a prospective buyer, a first-time buyer or long-term best customer. Can’t see it, can’t leverage it. Consumers may be nice about it — for a while — but if they’re dropping $1,000 per year with the brand, then they should be treated special.
Customer reps and salespeople should be able to distinguish between a first-time customer, a repeat customer, and a loyal customer. These reps need a zippy fast lookup capability and the customer profile needs to be delivered in a user-friendly way.
In part two of this series, I will look at call centers, customer lookups and the enduring power of the store experience.
Augie MacCurrach is the CEO of Boston-based Customer Portfolios, a marketing technology leader that uses insight and analytics to increase customer value. You can follow Customer Portfolios at @CustPortfolios on Twitter.
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