CX: The challenges and rewards of personalisation
Retail productivity experts SWL Group are thought leaders in operations optimisation. Our new ‘Crisis Recovery’ programme is the result of decades of experience, and provides your business with effective solutions, informed by data fact, to optimise your business in these challenging times. Integration and personalisation of omnichannel approaches to customer experience are a key to retailers’ success in our current climate. SWL can help your business to incorporate – and benefit from – Customer Personalisation in your business operations.
A recent report, co-written by retaildive.com and Neustar, offers some concise summaries of the challenges and rewards of this integrated approach of personalisation. The evidence is clear:
One study showed that 77% of businesses that exceeded their revenue goals had a documented personalization strategy in place. Customers who have highly personalized shopping experiences spend more money on their purchase and are more likely to become repeat buyers.
Customers have never had such a dazzling variety of shopping and browsing methods, visiting the brand via its website or app on mobile phone, tablet, computer, smart watch or personal assistant such as Siri or Alexa. They might visit a physical store for a tactile or ‘experiential input’. Seeking improved customer personalisation it’s important to note that a combination of any of these channels is common in a customer’s path to purchase. This applies to almost three-quarters of shoppers: ‘A Harvard Business Review study of 46,000 people found that 73% are omnichannel customers.’
‘Identity Stitching’
This of course has given companies incredible potential to know – and serve – their customers like never before. But it’s not that simple. Many businesses understandably struggle to pull all of the data together in a meaningful and cohesive way. Thus, these invaluable ‘identity stitching’ insights still evade them:
‘The identity stitching process is becoming more challenging” – Kirsten Haitz, Marketing Strategy and Data Science Executive for Fortune 500 retailers.
Whereas it is relatively easy to track a shopper’s activity and preferences in an e-commerce interface, in a brick-and-mortar store, ‘you don’t have that level of interaction. A customer could talk to people and leave, and nobody would even know they were there.’
Operational productivity specialists SWL have a proven track record of success in empowering our clients to pinpoint, analyse and optimise your customers’ interaction with the physical shopping experience. Our analysis of all of your data sets will achieve better integration, efficiency and effectiveness across all channels. This point is key: integration of both e-commerce and physical interactions will make for better CX:
‘Retailers will need to sync digital interactions with real-world identity for better marketing personalization.’
Once this integration is combined with informing customers with openness and transparency regarding data collection, the door is open to building loyalty and trust. This is a crucial and ephemeral ‘CX-factor’ in post-COVID Retail.
Retailers must also be transparent about what data they collect, how they use it, and how long they will keep it. Being straightforward about the data helps maintain trust and helps people understand the value they receive for providing data.
Focus on the Customer
The RetailDive report breaks our priorities down into six key action points:
- Use the data you have
- Find new customers
- Create a complete customer profile
- Connect with customers
- Invite customers to provide data
- Be transparent about data use
Connecting with the customer is the area we focus on here. The message is simple: an omnichannel strategy is paramount – for both marketing and customer engagement. For example, though an effectively basic idea, most retailers were forced to shut their premises during Lockdown, but a number adapted by offering curbside customer pick-up of goods via the use of an app. The result was an acceleration in online and offline connectivity with the customer:
‘“It’s a bit of a silver lining that in some way, [the pandemic] is pushing retailers to make the kind of investments they probably needed to make the consumer experience convenient. The crisis highlighted the need for a unified customer view… Those companies with that one view can much more easily dive in and understand how customer behavior is changing.”
In addition to the customer service experience offered by retailers’ apps prior to the pandemic, brick-and-mortar locations increased the reliance on on their e-commerce side, connecting with their customers with targeted marketing message. For example, ‘updates on cleanliness protocols designed to keep customers and employees safe, provide suggestions for activities to keep busy at home, or promote products relevant to the current work-from-home environment.’
‘Reinvent your store’
The recent Validity report ‘Reinvent Your Store’ concludes that despite the cataclysmic changes that have come with COVID-19, many businesses in the UK Retail sector has adapted smartly and successfully:
‘The three months since the beginning of March have been seismic for the retail sector in the UK. In many cases retailers had to furlough 80-90% of their employees in a matter of days, close their entire store estate and try and restructure business and online operations on Zoom! We are all still processing what has happened, but it’s a testament to the resilience of the UK retail sector how quickly and well most have adapted.’
Following the outbreak of the pandemic and the national lockdown announced on 23 March, we have seen a record decline in retail sales. Around 33% of the retail workforce – just over 900k employees – have been furloughed.
It is no surprise that retailers further along the digital transformation path have fared better than others, and ‘all retailers are urgently looking to reassess the role of their stores in order to future proof their businesses.’ The Validify report stresses the crucial role that IT innovation is, and will, have in helping the sector to reinvent and repurpose their stores in this Retail New Normal. The report covers five key areas:
- Re-opening safely and successfully
- Re-inventing the in-store experience
- Connected stores – bridging online and stores
- Optimise store ops and communications
- Unified commerce, future proofing your business
Precisely mirroring these insights, SWL’s Crisis Recovery programme is an integrated strategy that focuses on all five of these areas. It provides forensic analysis of data fact, down to granular level, of every corner of your Operations. We develop your productivity through three phases:
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Insight
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Transition
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Optimisation
In many ways the Coronavirus pandemic has in a sense precipitated permanent changes in business operations that have been required for a long time, particularly with the High Street’s decline. It has ‘accelerated the long-term changes already taking place in Retail. The mass switch to online shopping is likely to be a ‘new normal’ that is here to stay.’
However, as published in fooddive.com among many others, physical stores are far from redundant:
Direct-to-consumer is growing, but it won’t become the predominant method of buying food. It’s just not the most efficient way of servicing the customer.” (Neil Saunders, Managing director, Global Data)
And although short-term and medium-term economic recovery look unlikely, the report says, Retail has shown the ability to adapt, innovate and be altruistic in reaching out to their customer communities. Consumer confidence and anxiety are still major concerns. SWL has supported this notion in several of our articles in recent months. Clear ‘Purpose’ is paramount to a strong brand presence, and to attract and sustain customer loyalty. Swift investment in new omnichannel approaches has seen encouraging signs for the more successful businesses:
‘Those that were quick to invest, find new ways of reaching out to and serving customers during the crisis are well placed to meet the longer-term challenges. Many others will be able to take the learning – accelerating their online and omni-channel presence and innovating to ensure the in-store experience continues to appeal to and meet customer needs. Embedding and building on these innovations will be crucial for retailers not just to survive, but to thrive in a new era. COVID has created challenges for all, opportunities for others; a critical moment for everyone.’
The last three months have seen a mixed reaction by retailers to re-open their stores. Some have opened a few key locations, others relying on customer collection or delivery, but most have opted for a ‘phased test-and-learn approach to reopening. Retailers looking to re-evaluate their store estate will need to consider what the ‘right mix’ of stores is to maximise coverage.’
Obviously, there are many factors informing these concerns, including the need to limit the number of customers at any one time, with the government urging people to shop alone and in their wake different forms of queue management have emerged. Apps or hardware have been implemented to allow customers to book time slots or appointments to visit a store – this has led to an improved customer experience by avoiding friction and impatience. This has long been the norm in the luxury and hospitality sectors. Limitations on customers and store colleagues physically touching products. Items will need to be removed and cleaned after every touch, creating stock availability issues. Technology and data analysis will be crucial in managing these new safety measures. In the coming months, retailers will wait to see how well our retail staff and customer communities adapt to this rewiring of their once-normal ‘neural pathways’.
Guy Mason offers an excellent and powerful conclusion:
Reopening safely and successfully requires us to re-index on the two things that have always characterised a great retailer: customer trust and customer confidence in the Brand. The disruptive impact of recent events will reverberate across all the retail dimensions. The consumer’s perception of shopping may have initially been challenged around health and safety, but it is now driving customers to question everything we and they previously assumed – across loyalty, quality, pricing, fulfilment and customer service.
‘It is therefore not enough just to implement health and safety measures, we need to re-emphasise the values for which we wish to be known and deliver the experiences that retain customers in the face of a growing willingness to switch brands. The changes need to be visible, innovative and personalised in order to build trust at an individual, personal level.
‘Paradoxically therefore, new times and new challenges can be overcome by reinforcing those things that have always built trust – flawless execution, focus on the customer and staying true to the brand values, building a sense of ‘me’ not ‘us’.
‘Instore Theatre’
Stores therefore have to re-invent their offer, not just to entice customers back into the shops, but to increase their conversion rate once they’re inside. One of the terms used to describe this aspect of CX is ‘Instore Theatre’.
Contactless Retail – As with Amazon Go, we witnessed how technologies were used to manage purchases without a presence on tills, and similarly, automatic shelf replenishment tracking can be employed to ensure for maximum hygiene practices.
Personalised experiences – with fewer shoppers permitted inside stores, this presents an opportunity for retailers to engage much more effectively on a one-to-one basis. In tandem with face-to-face colleague to customer interaction, technology can be employed to help customers identify, understand and locate products.
Store Optimisation – ‘Utilising in-store analytics and tracking technologies to drive optimisation, e.g. maintain the right stock mix based on real-time store footfall, or track how people shop your store to update range and layout accordingly. As retailers down-size their real estates, we will likely see the rise of ‘Experience hubs,’ where remaining stores become places for customers to engage their brand through enriched experiences and services.’
The ‘Experience Hub’ is surely then an opportunity for retailers to focus on the quality rather than the quantity of CX focus.
According to Dimas Gimeno, ‘we are softly entering ‘handsfree’ or ‘no touch’ retail’. The trends are plain to see: disinfection routines, ‘COVID-free’ window displays, ultraviolet lighting, ozone cleaning systems, complimentary hand gels.
Despite a surge in shopping trends towards online, ‘it puts increasing pressure on retailers to engender better online experiences, as well as give shoppers a reason to return to stores. This should be viewed as a positive by most retailers as it has been shown that omnichannel customers are worth 30% more (CXNetwork, 2019) in terms of lifetime value than single channel consumers.
Over the last decade retailers have been increasingly bridging the gap between online and stores – be it at different speeds. Covid will force all retailers to prioritise how to further blend the online/offline experience.’
Gimeno continues:
‘increasing requirements to optimise workforce management in-stores, freeing up management to focus on customer sales and creating a real time dialogue with head office to facilitate real-time decision making.’
SWL offers many years’ experience in delivering exactly that.
Personalisation of instore communication methods
Some retailers have taken the innovative step of putting technological communication tools in the hands of customer-facing colleagues. Communication with the customer is therefore on ‘a more localised level, creating a more personalised customer experience and a customer/ brand feedback loop.’ The customer’s shopping experience can only improve as a result. From an operational point of view, communication like this will assist businesses to adjust priorities and workforce allocation.
‘With a smoothing of trade, through capped numbers within the store to abide by social distancing guidelines, this means there are no ‘peaks and valleys’ in trade, no morning rush, after work or lunchtimes. To add to this, with 50% of checkout lanes closed to maintain the 2-metre distance, the ability to move existing hours within the operation to other times seamlessly is so important.’
Stuart Eames highlights some of the huge workforce changes that have befallen the brick-and-mortar Retail sector. Here in summary:
- Replenishment teams socially-distanced, working out of hours or solo
- Shoppers moving back towards weekly shopping
- A move away from breakfast/lunch/spontaneous footfall towards weekly shopping habits
- An increase in home baking and Beers, Wines and Spirits
- Fewer customers will shop, but there will be much more in their baskets
To this end, the BRC-KPMG Retail Sales Monitor May 2020 states the importance of smart brands establishing ‘a holistic view of their business first. Simply selecting stores based on store turnover or profitability does not factor in the impact an individual store can have on your businesses overall ability to optimise local fulfilment such as click and collect, ship from store and dark store activity on a national or international level.
Operationally, retailers can no longer afford to have silos, establishing a single view of customer, inventory, payments and content will set the foundations for achieving a unified business.
SWL’s operational expertise can help your business to unify these multi-faceted cornerstones of your business.
‘The Physical Manifestation’
In a recent article, Industry Dive’s Brand Studio focused on ‘The Physical Manifestation’: some developing changes in the tracking of customer profiles, preferences and behaviour. E-commerce has long since had the edge over brick-and-mortar locations in these types of analytics. However, this is in the process of change. New in-store analytics can help physical grocery stores to gather information in much the same way as their online counterparts, and in the process improve the experience of and relationship with their shoppers. These technological innovations could include:
Tracking customer behaviour: ’Tracking shoppers’ journeys can also help grocers improve store formats, through more intuitive product placement and organization… This data can help them identify dead zones and better use their space to increase traffic. For example, they may decide to run a promotion in Aisle 10 to increase traffic or figure out if different signage will boost traffic, just as you would on a website where you know exactly what areas people are visiting and what they’re doing there.’
Order picking from online orders: A 40% increase in online grocery shopping, creating a need for a much larger, dedicated workforce of order pickers: ‘While customers are flocking to this service, for grocers it presents a key operational cost to what can be a very expensive component of the shopping experience. After all, now retailers must pay order “pickers” to step in to do the job shoppers used to do. That’s why increased efficiency in order picking is critical. SIRL research shows that deploying the wayfinding feature to create an optimized route can greatly decrease the pick time. “Anything that can be done to reduce cost and improve efficiency in that process helps a retailer to enhance this service offering for their current and prospective customers.”
Smarter promotions: ’Delivering a relevant promotion — the right item at the right time at the right price — is exciting for brands and retailers, but also welcomed by shoppers. “Delivering these promotions in the context of when the shopper is in buying mode and making that last-second decision is the best time to deliver the information,” says Roller, adding that now it’s as easy to offer in the brick-and-mortar environment as online.’
Checkout queues: ‘With analytics, grocers can measure wait times by checkout and departments and send alerts to managers in real time to redeploy staff if a delay exceeds their acceptable limit. The reports also allow managers to conduct more intuitive scheduling by tracking traffic by daypart and day of the week.’
SWL has been offering forensic analytics of exactly these dynamic data for many years. We have helped our many clients to optimise their instore operations and deliver more effective, more efficient systems. Our Crisis Recovery programme combines our long-term operational expertise with invaluable insights on the Retail New Normal. We deliver three phases: Insight, Transition, Optimisation.