As we continue to watch a few top retailers gobble up competitors like a black hole that becomes stronger with each thing it eats, it is increasingly clear that competing on price and product is a losing strategy. In today’s global economy, few retailers have truly differentiated products that can’t be purchased anywhere else. Those few retailers tend to be mom-n’-pop stores with localized niche offerings, which don’t translate to a global marketplace. Outside of those, most everything else is becoming commoditized. This is a tough reality for retailers.
If we generalize it, the starting point for retailers is:
- Every product is available to every person
- The lowest price is always available to every person
- Every product is available from multiple vendors
Then, we can easily understand why so many retailers are being displaced by online-only vendors that can undercut them on price, and by digital-savvy retailers that have invested in customer analytics to help each customer find what they want faster and easier.
This trend has led to a rejuvenated emphasis on customer experience (CX) – it’s the new black. And CX is the top opportunity (and top priority) for retailers today. Customers are now connected through digital and physical touchpoints, and they increasingly expect more integration, more guidance, and more holistic value as they navigate through devices, websites, apps, e-stores, physical stores, and more.
A connected customer experience can be about streamlining the process for someone to research/consider/buy a single item across all of the physical and digital touchpoints. Or, it can be about buying an experience that is connected by nature. For example, instead of selling running shoes, a retailer can sell “fitness” by offering combinations of products and services in a cohesive package (combining education, products, programs, memberships, access, services, etc.).
Providing superior CX leads to higher revenue, more loyal customers, reduced shopper loss, less waste, and more efficient operations. And it enables sellers to think differently about how they deliver value to buyers. If a retailer could understand that improving my fitness is a bigger goal for me than buying that pair of running shoes, they could help me buy fitness with a bigger assortment of offerings. And, it’s stickier. Instead of thinking of that store as a shoe vendor, I’d now think of it as my fitness partner.
Retailers need to abandon the outdated mindset that CX is just about a smiling face at the register, convenient location, a knowledgeable sales person, and a good return policy. The opportunity to win on customer experience is based on catering to the individual. Through new sources of data (from IoT, websites, apps, beacons, in-store PoS, etc.), it is possible to understand the customers as individuals (demographics, preferred communications styles, product affinities, behavioral patterns, shopping history, etc.), determine their goals, and see where they are on their shopping journeys. These data form the basis for customer insight.
To make that data become meaningful, it needs to be insightful and consumable – it’s what TCS calls Connected Consumer Intelligence™. Furthermore, it must be actionable, which means drawing conclusions and recommendations so that business stakeholder know the next best action to take to influence the customer journey. Finally, there must be a repeatable and scalable way to deliver the recommendations to the front-line systems and stakeholders for implementation at the right time, in the right way, to the right person. Connecting and executing all of these processes means that you are performing “customer journey management.” It also means that you have a distinct competitive advantage.
A recent report by EIQ Research, an analyst organization that works with retailers to help them achieve strategic market advantage through data, named TCS Digital Software and Solutions Group, with its Customer Intelligence & Insights software, as a leader in customer journey management (shameless plug).
But unlike “the new black”, journey management is not a fad. Many retailers understand the basic concept of journey management, but they don’t realize that they are not equipped to do it. There is an awareness gap in that marketers assume that if they have customer data, a CRM, and marketing campaign software, then they have the means to personalize their marketing efforts. And yes, they are personalizing their efforts, but they are not doing it intelligently because they still can’t make data-driven decisions about “what to do next” (visibility and control are not enough – eyesight and a car do not make me a good driver). The TCS software provides visibility, insight, recommendations, and control of the customer journeys with model-based recommendations for the next best actions for each customer in context to their goals, preferences and buying stage. With machine learning and built-in retail data models, the TCS software applies advanced predictive analytics to surface Connected Consumer Intelligence and deliver it for execution to the key stakeholders and business systems such as Marketo, HubSpot, Act-On and others.
Takeaway for retail marketers:
- Customers are increasingly choosing vendors based on experience, rather than products
- Customer experience is the new battlefield for retailers
- Journey management is critical component of delivering superior customer experiences
- Journey management analytics is a gap in many marketers’ tool kits
- Journey management analytics complements, rather than replaces systems such as: CRMs, customer data platforms, marketing automation and campaign systems.