As social media has grown in the past decade, its biggest impact has been in empowering customers to become ‘prosumers’, being able to produce information as easily as they consume, and mobile technology or the mobile applications are invariably helping retailers to make use of this customer-driven information.
News organisations now source a significant amount of news from individual contributors via Twitter, while KickStarter is enabling consumers to provide inputs and contribute to the production of new products and services.
One seismic effect of social media is the amount of data consumers are beginning to produce and the impact that will have on the relationships they develop and maintain with retailers and brands. The explosion in wearable and connected devices is resulting in a massive increase of data, most of it produced by the customer. Every industry is going to have to rethink how it adapts to a world, where access to the most valuable customer data is no longer its right, but rather a privilege.
The good news is that we see a number of trends that indicate the world is already moving in this direction. Specifically, the rise in connected devices is resulting in easy creation of valuable data. Retailers are exploring unique ways to leverage their online and offline presence to collect more of this data in order to deliver a more personalised experience for their customer. Finally, customers are demanding and getting more security and control over how their data is being used. Below, we explore each of these in more detail.
The Most Valuable Data is Produced by the Customer
From the beginning of retail trade, customer data has been critical to a successful enterprise. A sole proprietor in a small town got to know each individual through a combination of personal conversations and purchase history, allowing him to create a “CRM solution” in his head. As retailers scaled up, technology enabled more complex systems for collecting and storing purchase data, but could not replace the learnings from such personal conversations.
In the last five years, things have changed dramatically. Publishers, either through cookies or persistent IDs, now track my online behaviour across the Internet. I have a mobile device that tracks my location and what I am doing on my phone in each location at all times. I use a FitBitto to collect data about exercise, weight and sleep. I state my food intake to MyFitnessPal. And consumers allow refrigerators into their homes that track food consumption, or thermostats that produce information about heating and cooling requirements as well as activity in a home.
Mobile devices (traffic growth of 81 per cent), wearables (which generated 1.7 petabytes of data across 22MM devices in 2013) and the Internet of Things (smart devices generate 29 times as much data as non-smart devices) have the capacity to reintroduce this most valuable personal customer data to retailers. However, retailers don’t have access to this customer data, by default it is produced and usually owned by the customer.
Customer is King Again
Mobile technology is driving the effort to move communication from households to individuals. This helps retailers deliver more personalised communications and recommendations as they are based on an individual’s profile rather than the aggregation of the entire household. They also represent a way to communicate with the consumer all the way through the purchase, while remaining connected to any pre-visit behaviour exhibited by the customer.
Mobile players, through advertising IDs, are also doing a better job than the desktop Internet, of identifying a persistent user across all activities performed on the mobile device, which again helps marketers better understand individuals, so they can speak to them better. The ability to properly understand a customer’s entire path to purchase will enable a retailer to initiate a conversation with the customer, offering the right information at each stage of their decision process.
Knowledge about the customer is paramount today, but only as a means to foster better loyalty with customers by treating each customer as an individual so you can deliver the specific and relevant value to each. As a result, a business CRM strategy is critical as it must include learning more about your customers, applying the right insights to that data, and activating upon that data to deliver relevant value to each customer.
A big area of research right now is in how to enable bricks-and-mortar retailers to collect data analogues of the online behaviour eCommerce retailers track. Just as Amazon.com understands which products you considered, how long you spent researching each one and what reviews may have worked best to convince you to purchase something, offline retailers want to understand these analogues of the physical world. Using in-store technologies such as cameras, wifi and beacons, alongside users’ mobile devices, will enable retailers to significantly improve assortment, merchandising and space planning.
CRUX of it
1) Using in-store technologies such as cameras, wifi and beacons, alongside users’ mobile devices, will enable retailers to significantly improve assortment, merchandising and space planning.
2) Mobile players, through advertising IDs, are also doing a better job than the desktop Internet of identifying a persistent user across all activities performed on the mobile device, which again helps marketers better understand individuals so they can speak to them better
3) Mobile technology is driving the effort to move from households to individuals, helping retailers deliver more personalised communications and recommendations.
The writer of this article is Nishat Mehta, Executive Vice President - Global Partners, dunnhumby India. The views expressed here are personal.