Data has become one of retailers’ most valuable assets, yet many still struggle to use it in a way that drives true value for their businesses.
According to a recent survey of senior-level marketers, 47 percent of respondents think artificial intelligence is overhyped, and another 31 percent say the same about big data. Consumers, however, have other ideas. They demand personalized, seamless shopping and customer service experiences — things that are simply not possible without data.
Forget “big data.” Let’s call it "infinite data” because it's ever-expanding. Retailers that can figure out how to use data to create memorable experiences for their customers will have a palpable advantage moving forward. Let this be the year you put infinite data to work for you.
Create Data-Rich Customer Profiles
To create higher levels of personalization, you need richer datasets. Think beyond basic, functional data, like your purchase data — e.g., what people buy, what method of payment they use, whether they bought in-store or online, etc. You need to create customer profiles that help you understand customers’ preferences and predict future behavior.
Retailers also use behavioral data gathered clandestinely as people shop online. This encompasses people’s search patterns and browsing behaviors. Some leverage anonymous data, gathered with tools like Google Analytics, to understand such things as where users are based and their type of device and operating system.
To take this insight to the next level, retailers should use volunteer data, in which they simply ask customers questions. This is commonplace for subscription-based businesses, where users are accustomed to creating profiles and sharing their preferences. You can also work with external data providers that merge their data with your own, helping you do a better job of finding and understanding your customers.
Data isn't just about customers’ behavior online. You also need data from in-store experiences. Are you able to connect users’ online purchases with their in-store shopping? This can be fairly simple when someone uses a loyalty program or store credit card, but that's not always the case.
Many retailers are juggling multiple platforms that aren't easily integrated. For example, they struggle to match their online data with their point-of-sale system. Many retailers also lack digital skill sets and don’t have confidence in their data strategies. You must develop those skills in-house, or find the right agency partners to help.
Remember, an omnichannel approach must also include mobile. Mobile shopping visits are on the rise and forecasted to eclipse desktop and in-store spending. Be sure all your systems reflect this trend.
Respect Your Customer
Customers don't want a one-size-fits-all experience. They expect personalization. However, there's a fine line between custom and creepy. You don’t want your customers to feel like you've been spying on them.
Try being more upfront with your data collection tactics and using every interaction as an opportunity to get to know your customers. See this as a gradual process. You don’t go on a first date and ask someone their life story. Build robust profiles by asking simple questions about their preferences over time.
Part of respecting customers is giving them control over the data you've collected. For example, give people the ability to easily opt out of marketing newsletters. This also falls in line with the new EU General Data Protection Regulation, which goes into effect this spring.
Personalization isn’t about bombarding people with promo codes for an item they clicked on once. That can seem desperate. (It can also be inaccurate. What if someone clicked an item in error? Now you're following them around the internet with ads for something they have no interest in.)
This year, the most digitally sophisticated retailers will begin to use their insights more strategically. They will create data-rich experiences that are subtle and savvy, not akin to “Big Brother.”
Infinite data can be overwhelming, certainly, but its benefits are nearly infinite, too. With systems, strategy and skill sets, retailers can use data to better understand their customers, improve their marketing and create exceptional experiences that keep customers coming back for more.
Melissa Pegus is vice president of channel partners and strategic alliances at MPP Global, a cloud-based CRM and e-commerce platform.
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