Harnessing the power of omni-channel shopper identities
IMPLICATIONS:
Demand for analysis of shopping behaviours across channels is set to snowball. The chasm between online and offline can been bridged with innovative technologies. However, this doesn’t come without obstacles.
With personalised promotions and discounts, retailers can improve their profit margin as well as grab market share from other retailers by luring their shoppers into their own stores.
Retailers need to ensure they not only comply with data privacy standards, but also clearly communicate to shoppers what they are doing and why. What’s more, the offer must be sufficiently appealing to shoppers.
FMCGs are also interested in omni-channel shopper insights. These will enable them to provide more contextualised offers and to fine-tune marketing efforts according to the channels offering the highest conversion rates.
Over the last few years, bricks and mortar retailers have successfully caught up with their online peers when it comes to shopper insights and analysis of buying patterns. A plethora of new technologies exist to help themtrack shoppers - albeit mostly anonymously - as they browse the aisles. However, in their attempt to become true omni-channel businesses, retailers are now confronted with new technological challenges around shopper insights.
The rocky road to omni-channel retailing
Not only do retailers have to ramp up their inventory and supply chain solutions to cater for the needs of an omni-channel future, they also have to invest in customer relationship management (CRM) tools that enable a comprehensive picture on shopper buying patterns across channels.
This is necessary in order to interact with customers in a seamless way and provide them with tailor-made offers and promotions. This would, for instance, enable them to send personalised promotions to shoppers for a product they had browsed in the retailer’s online shop the previous day, but didn’t buy - as soon as they enter a physical store or maybe even just walk past outside. Conversely, it would enable retailers to send out special online offers for items shoppers have scanned with their smartphones instore, but didn’t buy.
However, while this sounds like a great opportunity to interact with shoppers, it’s easier said than done. There are quite a few technological hurdles to overcome to gain such omni-channel insights and customer interaction.
First of all, it is important that retailers avoid working in silos. They might have already implemented several marketing or insights tools. However, to gain a true omni-channel view on the shopper, systems integration - or implementation of a new omni-channel tool - will be key. What’s more, different departments - for instance, marketing departments of different banners - will work not only with diverse tools but with dissimilar data as well. For smart product recommendations and promotions, they have to ensure a holistic view.
Finally, retailers need to ensure that they update their back-end systems, in their stores as well as in their digital divisions. Very often, this requires quite substantial investments, both financially and as regards time.
Smartphones are the means of choice to identify shoppers
It is definitely easier to track shoppers online than in bricks and mortar stores, but it is not without drawbacks. Shoppers are using a variety of devices to search or shop online. They might look at a specific product on their smartphone, but will ultimately make a purchase using their laptop. While this won’t be a problem as soon as they log into their profile on a retailer’s site, it is an issue beforehand. New tracking tools and device identification numbers are proving handy here and help attribute different surfing and shopping sessions to one profile.
Carrefour wants to bring online and offline shopper insights together. © Carrefour
Instore, the situation is far simpler when the shopper is, for instance, using a retailer’s app to check prices or for indoor navigation and may even have Bluetooth activated. Product recommendations or personalised pricing can then be triggered by, for example, beacons. However, if this is not the case, things become a bit trickier. Rather than knowing the individual person entering the store, retailers could decide to simply use their Wi-Fi to anonymously track who is instore and how long they are staying. This won’t enable promotions or unique shopper tracking, but it might yield valuable insights.
Conversely, retailers could also try to make their offer as alluring as possible, thus encouraging shoppers to download their app and consent to sharing their data.
A tightrope between personalisation and data privacy
However, retailers need to clearly communicate what kind of data they intend to collect and use. They must also enable shoppers to opt out should they not wish to leave a data trail or receive targeted messages.
“Retailers need to be careful with personalised promotions and prices. It’s important to openly communicate to the shopper what kind of data they collect and why,” Bernd Schlösser, Solution Consultant at IBM told Planet Retail: “What’s more, retailers need to offer something in return. As soon as shoppers see an added value, they will approve the collection of data to enable promotions that are tailored to their preferences. Ultimately, that is what they expect."
Regarding offer personalisation, there are a few more things retailers must keep in mind. They need to treat all customers individually, based on their actual needs and preferences, and not favour any particular shopper segment. Keeping those affluent, loyal shoppers with big shopping baskets as customers might be as important and economically viable as convincing an occasional shopper to not defect to the competition.
After all the theory, let’s look at some examples of what retailers are doing to target shoppers across channels and/or personalise promotions and prices.
Carrefour selects Acxiom for data integration
French retailer Carrefour chose Acxiom’s Audience Operating System (AOS) to increase the effectiveness of its marketing campaigns.With AOS, the retailer can connect online and offline data sources and thus provide a more personalised brand experience instore or online.The software-as-a-service tool consolidates data from several enterprise systems such as CRM and media and manages all interactions across all channels via a single platform.
The tool enables marketers to run analytics to segment audiences and provides a comprehensive view of the audience across channels, devices and media sources enriched by demographic, contextual, behavioural and social profiles. To address privacy concerns, Axciom has launchedaboutthedata.com, a website giving consumers access to the data Acxiom has collected, along with options to opt out or correct it.
Retailers team up with Google to lure shoppers into stores
Retailers like Macy’s have begun using Google’s proximity marketing platform called Nearby to tempt customers in a shopping mood into stores when using their smartphones to search for items via Google. Browsing shoppers are informed if they can find their desired product at a nearby Macy’s. Alongside product images are details like price, size and colour and outlet directions as well as a direct link to the item at macys.com. For bricks and mortar retailers, this is a powerful tool to fight back against online players and cater to shoppers seeking immediate gratification.
Google also enables retailers to scale up their omni-channel capabilities and examine interactions across different digital media. The Multi-Channel Funnels reporting facility in Google Analytics helps retailers better plan marketing strategies by revealing with which channels their customers interacted during the 30 days before conversion or purchase.
Coop (CH) personalises online promotions
The Swiss retailer Coop now sends out customised promotions for its grocery e-commerce offer powered by software from prudsys, a specialist on real-time website personalisation. The new tool analyses shopper interests and preferences in real time while simultaneously having an overview of the retailer’s stock.
After successful trials with standard 10% or 20% discounts based on previous purchasing histories, shoppers now receive targeted promotions for two of their favourite products as well as two additional product recommendations at individualised prices.
According to Coop, grocery e-commerce orders only begin to pay off from a basket size of EUR190 upwards due to high picking and delivery costs. The new software helps improve its profit margin per customer as well as to increase shopping trip frequency. This is, for the time being, only being used for its Coop@home e-grocery banner. However, the tool’s functionality could be used for bricks and mortar store shoppers as well.
