Saturday, February 23, 2019

Customer insights lie at the centre of successful innovations


Once at the forefront of the ecommerce revolution, ASOS has found itself in choppy waters recently. After three profit warnings and attracting the attention of online giant Amazon, the company‘s change in fortune is a warning to all retailers about the importance of innovation and making sure that you don‘t get left behind.

It‘s a tale as old as time. One person invents the wheel, and the next contemplates how to improve it. Before you know it, there are cars on the streets, and a single stone wheel has little value. Markets advance and so must companies if they‘re to stay relevant.

This is especially true in the digital retail world. Better, faster, cheaper is the mantra of today‘s start-ups. They‘re fuelled by determination to succeed, even in fiercely competitive markets dominated by long-established companies.

Sites such as Boohoo, Misguided and Germany‘s Zalando have not only entered the market but also are attracting customers with lower prices and faster shipping. ASOS‘ response has been to slash prices consistently and aggressively on merchandise. While attracting a portion of Internet shoppers, this strategy has ultimately proven to damage company margins and jeopardise brand value.

But if discounts are bringing traffic and sales, how can ASOS move away from price-based consumer engagement without impacting revenue? Arguably one way of breaking this cycle comes down to understanding the customer better.

Data has a large role to play in better understanding the path to purchase and factors that can influence this. With individuality highly prized, especially in the sphere of fashion, it‘s only logical that customers will respond better to the tailored shopping experiences that can be made possible by audience data. Insight into shoppers‘ interests removes blindfolds and allows retailers to chart a strategic course.

For example, if a footwear site knows half of its shoppers are skateboarding enthusiasts, it might feature skate shoes on the homepage instead of high heels. Inviting a well-known skateboarder to be a guest curator, forging new partnerships with specialty brands, and reviewing inventory to ensure what is offered interests and adds value to target audiences are all possibilities with such insight. Or if 70% of the site‘s customers are women, it may seek to amend its proposition accordingly.

Audience data gives online retailers the ability and intelligence to interact with their customers as individuals instead of members of a general mass. This improves the convenience and experience of shopping online, not to mention bolstering sales of related items of interest. Customers are motivated to return for future purchases, and the retailer‘s profits can rise on a solid base.

ASOS is in the papers at the moment, but a year from now it could be any other business fighting to not fall behind. The constant push forwards is necessary, but it doesn‘t have to be difficult. With the right tools, an innovative spirit and a clear path ahead, today‘s companies will find prosperity in tomorrow‘s sales.