We have all heard about – and been told to prepare for – the inevitable death of the retail store. It’s an engaging and buzz-worthy story for our day and age, but unfortunately for these doomsayers, facts are in the way.
Although online retail is making formidable gains, the truth is that online purchases only represent 10% of all retail spending in Europe and even less than that in the US . In fact, even among consumers who research potential purchases using a smartphone, 77% of them go to a brick and mortar store to make the actual purchase . In other words, consumers still prefer to buy things in person; to touch and see the item they’re interested in.
That doesn’t mean retail companies can sit back and wipe the sweat off their brows, because technology has changed consumer behavior, and drastically. Consumers are better educated, more demanding, and have higher expectations. But if the answer is not to abandon the store in favor of technology, then it’s to use technology to make the store more powerful and profitable than ever.
The number of different strategies for using technology to drive store performance is large and wide-ranging. For the purposes of this blog post, we will focus on one key area: taking control of your data to improve customer relationships.
Data, Used Smartly
A common practice for a retail outlet is to ask for customers’ personal information, and use it to send one-size-fits-all email or paper promotions that hopefully entice them back into the store. But this narrow approach not only annoys the average consumer – it also sells short the value of available data.
In our increasingly digitized world, the opportunities for personalization – inexpensive, efficient personalization – are there for the taking. Consider, for instance, those 77% of consumers who researched products on their smartphones before buying an item in the store. The technology is available to get to know these consumers individually – not just where they live and what their email address is, but what their preferences are, what they purchased in the past, and what they’re likely to want to purchase in the future.
With the right tools, a retailer can leverage the power of multiple structured and unstructured data sources – integrating social, behavioral, demographic and transactional data into one framework. And within this framework, it’s possible to target each individual customer with promotions that speak uniquely to them. Such targeted promotions will be rewarded not just with new purchases, but also with more willingly shared information.
As retail industry futurist Doug Stephens points out in his blog, this kind of exchange “is less about privacy and data and more about earned trust through performance.” In other words, with this give and take, a relationship is born – one that has the potential to last a lifetime.
To learn more about harnessing the power of big data to improve customer engagement, along with many other important insights that can drive store performance, I invite you to register for a webinar moderated by myself and Doug Stephens: The Future of the Retail Store, March 20, 3:00 pm GMT.
1.Forrester Research, Online Retail Forecast, 2012-2017 (European and US), March 2013; Smart Insights, Forecast growth in percentage of online retail / Ecommerce sales, April 2013.
2.Nielsen, xAd and Telmetrics, Mobile Path-to-Purchase studies, August 2013; Marketing Land, Study: 77 Percent Of Smartphone-Driven Retail Purchases Happen In Stores, May 2013.