Retail has witnessed significant change in recent years as the overlap between online and in-store continues to blur. The competition has intensified as technology has created new opportunities for innovators and the overall retail landscape is now more unpredictable than ever before.
Consumers drive the charge behind technological innovation in the British retail sector; indeed, according to the ONS, the average weekly UK internet sales nearly tripled between November 2010 and 2017. It’s no secret that utilising data opens the door to providing the kind of personalisation that consumers now expect. Businesses must take advantage of the technology available if they are to keep up with the competition, but must be compliant with consumer data laws if they are to build trust in their brands.
Customer personalisation is key
Personalisation has grown rapidly in retail as increasing amounts of consumer data has been made available. Now a remarketing online advert or suggested Amazon item is commonplace in the typical online customer journey. And it works; 74% of customers believe personalised promotions would encourage them to purchase relevant products they’ve never purchased before. Retailers who ignore the link between personalisation and customer loyalty will see their customers lost to competitors.
Transitioning to a digital-first approach may sound intimidating for traditional businesses, but the opportunity to harness customer data to better understand behaviours and thereby predict desires and drive loyalty is too beneficial to ignore. Relevance to customers can be achieved through content creation, personalised offers and recommendations using algorithms that are informed by customer preferences.
Enriching personalisation with valuable data
Data created by customers is key for retailers (and other sector businesses alike) to improve customer retention and advance customer lifetime value. Businesses should build their entire sales strategies to harness as much data as possible to help inform their decision making.
A solution to this could be for them to adopt a holistic customer journey view. All marketing channels can be analysed for data and the customer experience overall provides a great yardstick for what motivates consumers to make those all-important purchase decisions.
Data should not be stopped at one section, inhibiting progression. It’s essential for it to be highly reactive and real-time in order to drive business decisions as they occur. Contextual marketing from data has proved effective in the past, wherein brands can personalise content to the customer’s circumstances at the exact moment they engage with them. Personalisation and contextualisation can go hand in hand to create targeted sales and marketing approaches and drive sales leads.
Building consumer trust through compliance
Data should be malleable and transferable, rather than siloed, in order to drive activation channels, such as SEO, brand websites, and ecommerce to name but a few. With the GDPR now in full force, customer data security is more vital and in the public eye than ever before. Google’s recent GDPR fine of 50 million euros by the French data regulator CNIL for a breach of the regulation is a key example of how failure to meet regulation standards can diminish consumer trust and can damage a company’s reputational and fiscal value.
Not only will responsible data storage and management improve consumer trust, but it can even help increase consumer engagement with a brand and help drive sales. Businesses must ensure compliance with all regulatory requirements in order to take advantage of the data available to them.
Using and storing data responsibly and harnessing it as a building block for personalisation, could provide the opportunity for retailers to increase customer loyalty through a more streamlined, targeted experience for consumers. What’s more, proper data management will help streamline business processes and avoid unnecessary misuse of stock, staff and finances. If retailers implement the right tools to automate, store and manage customer preferences, the digitalisation of loyalty can be achieved as the next frontier for the retail sector and others.
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