The focus for many retailers in 2020 is delivering differentiated customer experiences (CX) that are highly personalized to each individual. This is evident by a recent report we commissioned with eTail and WBR Insights, Retail CX and Data Management Strategies in 2020, which revealed an industry that’s investing heavily in new technologies to improve their businesses, particularly automating personalized customer experiences.
This study surveyed C-suite, vice president and department heads from global retailers. Respondents were from a range of retail companies with more than $1 billion in revenue across North America, Europe, the Middle East, Africa, and Asia-Pacific.
What we found is that retailers are pursuing a variety of strategies in an attempt to more successfully leverage customer data as part of their customer engagement initiatives. When asked which strategy their companies prioritize most, more than a quarter cited using data to create a single view of their customers across all touchpoints.
However, as retailers have known for years, wanting to have a single view of each customer is easier said than done — especially when databases can include thousands or even millions of customer touchpoints. A Forrester Consulting study commissioned by Deloitte found that businesses average 17 different technology applications leveraging customer data, with an average of 28 different data sources used for generating customer insights and customer engagement. Data silos across businesses create an environment where retailers may unknowingly have multiple interactions with the same customer (for example, via an email campaign, social media reply, customer service engagement, etc.).
Gathering and analyzing data in a single view is critical for retailers committed to providing more personalized experiences, offers and services to customers, regardless of whether they shop in-store, online or on mobile devices. Perhaps that’s why more than three out of four retailers have either implemented a customer data platform (CDP) or are planning to invest in one in 2020 to help unify all of their customer data and build a single, holistic view of each customer. Also, nearly half of those companies are just starting to invest in CDPs, illustrating the growth in the market, while 31 percent already have one and will be building on their investments.
Retailers realize that creative use of customer data — particularly to drive customer experience — is their best chance for growth, and they see CDPs as increasingly central to their strategies. CDPs use artificial intelligence (AI) and machine learning (ML) to build predictive segments and to support personalized engagement with customers at scale. As each customer shops, browses the web, posts on social media, or just moves around with their mobile phone, the best CDPs are able to update individual profiles in real time.
Additional highlights from the report include:
- Employees matter ... a lot: There's a link between building a better employee experience and delivering improved, more personalized results for customers. Consequently, 58 percent of respondents will adopt data science and business intelligence solutions so their employees can understand and accommodate customers who engage with their brands.
- Improving the customer experience doesn't stop at purchase: Retailers are realizing that customer service is paramount to building a loyal customer base, as 69 percent of organizations were successfully leveraging customer service data.
- Sentiment data usage lags, but there’s appetite to do more: Sentiment data is the least leveraged data type on this list. Only about one-third of respondents (32 percent) are leveraging sentiment data. However, 39 percent of respondents intend to prioritize sentiment data in 2020.
The trend toward collecting ever more data for tailored user experiences is only going to accelerate in 2020, as retailers supplement the online shopping, loyalty and demographic data they already have with more physical in-store data.
Retailers are eager to present customers with unique, delightful experiences that strike each individual as “just right.” Using customer data securely and responsibly with consent to create these customized customer journeys and experiences is not only a big part of their strategy, it’s the whole game.
Tom Treanor is the global head of marketing at Arm Treasure Data, an enterprise customer data platform.