The Retail Climate in A Digital Age
I recently attended the ICSC OAC Summit and was inspired by a seminar co-chaired by Ari Kurtz, Head of Industry, Retail at Google. His focus—retail in the digital age—honed in on the importance of the digital experience, the necessity of data collection, the appropriate application of that data and the value of enriching the customer experience.
Footsteps Decrease, Sales Soar
In his talk, Kurtz relayed that consumers are making fewer trips—less footsteps—to brick and mortar stores, but they are spending more during these infrequent trips. Why? Because before the consumer ever enters the physical store, he or she has researched the desired product or products online. Therefore, according to Kurtz, “Digital moments are more important than ever.”
He’s not alone in this train of thought. A recent TotalRetail article declares, “Even the youngest and most tech-savvy customer segment prefers shopping in physical stores by nearly 18 percentage points. At the same time, our survey shows that shoppers are more likely to start their hunt in digital channels by an almost two to one margin.”
Therefore, your digital presence must stand ready to perform.
Got Data? Must Use Data!
In today’s digital age, it’s all about the data. Kurtz claimed retailers can compete with Amazon via data collection, interpretation and application. To better predict future shopping behavior, retailers must track customers’ research, shopping and purchasing behavior.
Retail Info Systems (RIS) points to Walmart as an example of a retailer who understands the value and quickly leverages its data. The article reports, “[Walmart’s] Data Café is able to model, manipulate and visualize over 200 streams of internal and external data in order to make sense of it.” The Data Café is a state-of-the-art analytics hub located in Walmart’s Arkansas HQ.
Some companies become so focused on collecting data that they never apply the data to achieve real results. Forbes claims, “Research shows 80% of data is ‘dark and untouched,’ meaning it’s never actually used to make improvements or changes deemed necessary by the customer.”
It’s one thing to collect the data. It’s a much better thing to apply it in a manner that adds value.
Know Your Customer, Enrich the Journey
In the digital age, customers expect superior service—and they want it to be seamless no matter how or where they shop. Thus, enriching a customer’s journey to the desired product is imperative.
Kurtz stressed the value of knowing your customer. Google builds customer profiles based on the Google products they use—Chrome, Gmail and YouTube, to name a few. These products allow Google to understand much more about a person than mere demographic information – it provides a glimpse into everything from what that person researches, to the types of shows and videos they like to watch. Google then is able to distill the massive amount of information they collect and then provide a much richer profile to retailers so they can better know their audience—not only their demographics, but also their interests and spending habits. This is one way that retailers can intimately understand their customers and intentionally tailor their efforts.
One Forbes article advocates the use of advanced analytics to create better customer experiences (CX), which in turn creates more loyal customers. This author argues, “The ability to use both active and passive data to better gauge your customer and their journey is imperative to creating the optimal CX and improving journey mapping. Companies must collect, analyze, understand — and most importantly use — customer data to learn how to make CX better.”
Obviously, an online retail presence in today’s digital age is a must. But retailers cannot stop there. Data mined from both in-store and online exchanges needs to be collected, assessed and acted upon to stay competitive in today’s retail climate.