What pure play e-commerce can learn from clicks and mortar when it comes to customer data
E-commerce companies versus ‘clicks and mortar’ retailers are constantly involved in a battle of business; a tussle over trade, and a competition over customer engagement. With changing high streets and one billion of us around the world choosing to shop online, at first glance it seems very clear that e-commerce companies will emerge victorious. But there is one area in which ‘traditional’ retailers can, perhaps surprisingly, nudge ahead: customer data.
The ability to gather precise customer intelligence is the jewel in the retail crown. E-commerce businesses have, until fairly recently, been streets ahead here: they glean accurate, up-to-date information on their customers through their websites, through social media, mobile and email communications.
They use these channels to interact with their customers, and for many, this works well. Customers log in to e-commerce websites and share information about themselves, giving online retailers the information they want, from current contact details and financial information to product purchase and browsing history. But ‘traditional’ retailers that combine a physical presence with a digital presence now have access to greater, richer data across a diversity of channels – and this is where they have the chance to demonstrate a strong competitive advantage.
Traditional retailers that combine a physical presence with a digital presence now have access to greater, richer data across a diversity of channels – and this is where they have the chance to demonstrate strong competitive advantage
More and more ‘traditional’ retailers are delivering an immersive multichannel buying experience: clicks and mortar businesses have omnichannel capabilities which place the customer at the heart of the organisation, and they can source customer data at every touchpoint.
The process of shopping, buying and consuming can be completed across separate channels; for example, an offer sent by mobile drives a customer to order a product on a website. The customer selects ‘click and collect’, and is drawn into a store. Once in store, the customer browses, using in-store Wi-Fi to search offers and product lists. Research from BT found that 67% of participants in a survey use the Internet when they shop. GAME, the UK’s leading high street video games retailer, is one example, which provides Wi-Fi to enable its customers to play games in-store, enriching the experience.
The customer selects and pays for another few items, enjoying the tangible showroom aspect of the store. The customer makes the most of being in-store by asking a sales person for advice, then buys a high-end product, preferring to see and touch it rather than order it online. Alternatively, he or she may go home and buy it online; ‘show-rooming’, the practice of visiting a store to examine a product before buying it for less online, is an important strategy and a major advantage for physical retailers.
This single retail experience, as well as persuading customers to spend more than they’d anticipated and increasing the Average Revenue Per User, provides the ability to capture both structured and unstructured data far richer than that captured by a pure play e-commerce company:
- Information is gleaned on buyer behaviour and how this changes during the in-store experience
- Product preferences are recorded and personal data updated based on the sales assistant’s conversation, providing additional information for socio-demographic profiling
- Key drivers for purchases are identified, along with propensity to buy based on offers and discounts received, and information on family members and major life events
- Preferred channels are identified, enabling targeted communications
- Loyalty cards are used to capture purchasing patterns and frequency of purchase
Another crucial element which can be missing from pure play e-commerce businesses is location. It is important for a retailer to be where the customer wants to shop and buy, which may vary based on today’s dynamic lifestyles.
Adding the ‘where?’ to customer data provides retailers with a significant opportunity. Location data adds value to a customer relationship, and more and more marketers are boosting their success rates by incorporating it into their marketing strategy. Location intelligence also drives contextual marketing as it enables place and position to be worked into the marketing strategy.
Capturing customer preferences in terms of physical movement is extremely valuable as retailers can send hyper-targeted messages to mobiles at exactly the right stage of the buying cycle, to a customer in a particular location. Mobile has become an increasingly popular marketing channel, and businesses such as iadbox are enabling marketers to publish content to mobile users in a non-intrusive way, by enabling an interactive mailbox to be inserted into an Android or iOS app.
Ultimately, the victors in pure play e-commerce versus multichannel will be those businesses which have the ability to use data to create the best possible customer experience
Multi or omnichannel retailers, in theory, have a significant opportunity to gain a competitive advantage over e-commerce businesses based on the depth of data they can source. However, where e-commerce businesses can forge ahead is when it comes to the use of the data captured. Clicks and mortar large-scale retailers may have the budgets for huge data analytics platforms, with the ability to record real-time data, but smaller agile e-commerce businesses may just have the edge here: their businesses are, after all, built from the ground up on data and its management.
Whilst the data they have may be less diverse, their strategic business decisions have always been based on insight gleaned from data, and the culture and agility of their organisations enables them to quickly adapt to changing retail conditions.
Ultimately, the victors in the pure play e-commerce versus multichannel retail battle will be those businesses which have the ability to use data to create the best possible customer experience, and the ability to use data to analyse patterns, predict trends and make forecasts regarding propensity to buy and subscribe, with precision and accuracy. Empowered consumers work hard to earn their disposable income, and retailers – whether physical, digital or both – must work their data hard to offer a truly differentiated customer experience.
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