The world of retail has changed considerably over the years. Where once stood small bricks-and-mortar corner shops now stands an ever-expanding sea of online retailers. In fact, a nationwide study by Royal Mail of online-only retailers has found that the number of such businesses in the UK has more than doubled in the past five years from 6,700 in 2008 to 14,400 in 2012. As retailers strive to incessantly grow their customer base, the one thing they should try to emulate is the personal and high-quality customer service small corner shops have always been able to provide.
Consider the customer experience in a local newsagent – the shop assistant greets you on a first-name basis and over their years of experience, will know what you’re looking for while making informed suggestions on what you might like. It’s this kind of personal touch and superior understanding of what their customers want that creates the unwavering customer loyalty a traditional shopkeeper once needed to survive. Today, while the shopping experience has evolved drastically, the significance of customer loyalty remains very much unchanged – this is the reason why online retailers of all sizes are chomping at the bit to replicate this personal “corner shop customer experience”.
Business-to-consumer e-commerce sales set to pass the €1 trillion mark in 2013, according to a new report by the Interactive Media in Retail Group (IMRG). With competition fiercer than ever and with demand for online shopping reaching its peak, in depth customer engagement is more crucial than ever for survival. So how can online retailers provide a personalised customer experience that matches up to the once-popular corner shop?
Know your customer
Online businesses are already beginning to understand the vast potential that data analytics can offer them. In fact, according to research by MGI and McKinsey’s Business Technology Office, it is estimated that a retailer using big data to the full could increase its operating margin by more than 60 per cent. With the help of affordable cloud-based technology, coupled with elastic storage, it is now economically viable even for small and medium-sized online retailers to invest in new ways of understanding their customers.
Retailers have access to a vast pool of customer data but the information is useless unless it is analysed and interpreted to provide key intelligence on customers. Retailers should be using data on each customer’s purchase behaviour, browsing history, website and email behaviour, contact data, and any additional offline information the customer has provided to gain a better understanding of their position in the customer lifecycle and their potential for the business. This can also help them determine whether a customer is a prospect, a first time buyer, a repeat purchaser, a premium customer or an inactive customer. This insight can then be used to help retailers market their products differently for each individual customer, ensuring they increase the revenue per customer, prolong their ‘active customer’ stage and use tactics to reawaken dormant customers.
Personalise the customer experience
Treating each customer as an individual has never been more important. With competitors no more than a click away, customers now expect a top-quality, personalised shopping experience from retailers.
Once they’ve identified the different types of customers, online retailers should be using the data they have to target them individually based their position in the customer lifecycle. For example, an online book retailer may look to interact with their premium customers – those that regularly browse and buy – through marketing emails that promote new books that have recently been published. However, the same retailer would need to use a different tactic to interact with dormant customers – those that have browsed but not purchased in a while. For example, they may choose to reawaken these customers and encourage them to buy with incentives such as 10 per cent discounts.
Consumers like to feel valued and this is the type of personalisation that really gives off the impression that the retailer has considered them as an individual rather than just another sales number in the masses. The traditional corner shop never needed automated software to understand its customers because its limited customer base meant it could easily get to know individual customers through years of experience. But with the souring number of online shoppers that online retailers will never meet in person, it’s now more than ever to use automated technology to personalise communications for large numbers of customers. By using automated solutions, they can create tailored, intelligent sequence of communications for individual customers to ensure they target each customer with relevant information on a regular basis.
Another way retailers can provide an ultimate ‘corner shop experience’ is by using the data they have on their purchase and browsing history to recommend relevant items that the customer would be interested in buying. For example, if a customer has just purchased a new red dress, a clothing retailer could suggest matching accessories or shoes to go with the outfit. This would enable the retailer to fulfil horizontal sales opportunities that it may otherwise have missed.
Improve customer loyalty
Today, the four most important questions any retailer needs to be able to answer are: who is the customer? What content fits them best? When and how can we reach the customer? The answers to these questions were achieved by corner shop owners/salespeople over a number of years, but advanced technology can provide retailers of all sizes with the same insight in a matter of seconds.
With competition in the ecommerce industry at an all-time high, it’s imperative that retailers are able to identify, predict and recommend relevant products and services to customers better than ever before. Online retailers of all sizes need to have the ability to think globally and act locally when it comes to their customer base. Not only will this help them win new and retain existing customers, but will also give them the opportunity to create unwavering customer loyalty. Gaining this competitive edge is by definition what a “corner shop corporation” aims to achieve.