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Creating a single view of customers across channels has long been the goal of the ambitious retail marketer.
By being able to track and analyse consumer interactions across in-store and online, a retailer can create a new level of insight into their customers and therefore market to them with an unprecedented level of accuracy and insight.
In addition, data has shown again and again that customers who interact with a brand on more than one channel are more valuable and loyal than their single channel counterparts.
However, a single view of customers isn’t as simple as just connecting online and offline databases of information. It requires significant investment in new hardware, software, staff capabilities and processes.
Before launching any project of this scale, retailers need to be aware of the possibilities and pitfalls.
Here are five things that anyone looking to create cross-channel insight needs to know:
Be careful in-store
Collecting data in-store is hard. The standard way of doing this is via loyalty cards, but these only give partial data as people forget to use them or refuse to sign up for them at all.
You can collect names and addresses, either as part of a membership scheme or at the point of purchase, but customers are more reluctant to participate in data collection relative to online.
The latest option is technological. For example using mobiles (via GPS, SMS or NFC) to track location and interactions, but this raises significant privacy issues.
Whichever route is chosen, the key to securing maximum buy-in from customers is to make the process as seamless as possible and, ideally, to incentivise data submission through some form of offer or reward.
Not all data is equal
Collecting and analysing data online is (relatively) easy. There is a huge range of technologies that enable retailers to monitor every aspect of their customers’ interactions with their site. Moreover, this data is clean, in standardised formats and clearly measurable.
In-store, however the picture is murkier and, as mentioned above, the options are imperfect and often result in incomplete data samples. Furthermore, even when they’re working perfectly, in-store data collection methods can only really track what a customer has bought and when they bought it.
They can’t say what they looked at but didn’t purchase, when they put something in their basket and then changed their mind or when they walked past the window, looked in but decided not to transact.
The upshot of these compromises is that in-store data does not provide a comparable level of insight to online data and, even where they offer up metrics that are similar, the in-store data may be less precise and incomplete.
As such, these insights need to be treated with real care, and with an awareness that the paucity of in-store insight has the potential to significantly skew data outputs.
The primary goal of creating a single view of customer interactions is to market more effectively. If a retailer can understand what a customer is doing across multiple channels then a more complete picture can be built of their shopping behaviours and motivations.
For example, if someone purchases a product in store they could be offered complementary products online or, if they research a product online, they could potentially be offered discount options in store.
However, the value of segmentation is finite. Drilling ever deeper into the data can give smaller and smaller segments, eventually arriving at one-on-one marketing.
Whilst this might seem like an admirable ambition, as segments get smaller it’s hard to avoid diminishing returns and continue to drive real value. When using cross channel data retailers should always have a clear value calculation in the back of their mind, balancing cost and benefit at every stage.
Don’t get too personal
In a related point, over-segmentation also has risks in terms of customer relationship. Whilst a targeted marketing offer can delight a consumer and offer them real value, there is a difficult line where personal becomes creepy.
Revealing too much insight into a shopper’s habits can make them feel spied on and thus reject positive marketing messages.
The level of personalisation should always be viewed through the prism of a user’s privacy. Does a shopper want every user of their computer to know what they’ve been buying online?
If a customer is offered in-store discounts based on a potentially sensitive transaction they’ve made online is there potential for embarrassment?
A single view project is essentially a massive integration task. Silos of information about online behaviour need to be matched and integrated with their online equivalents.
CRM systems need to be aligned and co-ordinated, loyalty programmes need to be developed to account for new interaction channels and even in-store EPOS systems need to be adapted to enable new flows of information in and out.
It’s this process that’s going to cause the disruption and cost that can scare off the wary. Like any major process and technology change a single view project will inevitably come with challenges and costs.
The benefits of single view are clear but, before going down this road, a retailer should be equally aware of the costs and limitations.
At the end of the day, a retailer must draw their own conclusion from their research and decide if there is a cross-business strategy that their in-store customers would buy into.
If the answer is no then they should not invest heavily in this area. Conversely, if the stars of customer, channels and data can be made to align, then a single view can deliver real bottom line benefits.