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Data-Driven Marketing in Retail: 4 Areas of Change

  • Jed Mole

    Jed Mole

Created at December 12th, 2018

Data-Driven Marketing in Retail: 4 Areas of Change

Change is sweeping retail. As customers change how they shop and buy, and new technologies dramatically alter the retail landscape, retailers can access greater consumer insight, and uncover wider opportunities to serve than ever before.

With estimated retail industry sales likely to reach $27.2 trillion globally by 2020 – up from $20.8 trillion in 2015, opportunities are clear for retail brands.

Yet with this opportunity comes an equally great responsibility. Retail marketers today know that to succeed and retain loyalty in a changing and growing market, they must meet consumer expectations for relevant, personalised and seamless experiences – and for many marketers, that remains a challenge. Data is key; if marketers are to deliver that omnichannel experience, they must leverage single view customer datasets that capture and process data in real time.

Understanding how data-driven marketing, in retail specifically, is evolving, is an important aspect. So what trends should retail marketers be aware of in this changing landscape, and what should they do to keep pace?

4 Areas of Change For Retail Marketing

1. Online Growth

With ‘online retail’ named as a key driver of growth for the European and North American retail industry by the Centre for Retail Research, perfecting the online retail experience should continue to be a priority for retailers.

In fact, according to Forrester, online sales are expected to grow at an average of 11.9% per year during the 2017-2022 period in Western Europe, with 21% of non-grocery retail sales being online by 2022. If retailers are to make the most of this growth, they must be able to deliver a superior online experience, using data to achieve a seamless single customer view, and deliver personalised engagement accordingly.

2. Customer Experience

Creating a meaningful customer experience – across both digital and physical touchpoints – remains a priority for retailers. With the growth of online channels increasing, it’s more important than ever before that digital and physical touch points work together to achieve that seamless, data-driven customer experience across channels.

After all, physical retail stores are not going away just because online is growing. In fact, according to KPMG, retailers are increasingly taking advantage of their physical spaces to maximise experience per square foot and the real-life interactions customers have there. Customers will shop wherever they enjoy their experience; for data-driven marketers, that means being prepared, whether customers engage via a single channel or a combination of channels.

90% of worldwide retail sales are still done in physical stores to compete with the convenience and wide variety offered online. – Deloitte

3. Personalisation

Personalisation is key to enabling effective customer experiences – and accurate data insight into customers as individuals is core to enabling that personalisation. In an increasingly digital retail landscape, retailers are faced with new technologies such as AI, chatbots, AR, VR and more. Yet consumer expectations for a seamless, personalised interaction – however they choose to interact, are at an all-time high.

To see success, retailers must be able to integrate channels, recognising the shopper across touchpoints and offering tailored services, merchandise and promotions, online as well as offline. Investing in predictive customer analysis, and using data from an intersection of multiple sources (including connected objects) to better understand and delight customers, is the way forward – your customer data is the key to delivering better retail experiences everywhere.

4. Reinventing Technologies

Technology is a huge driver for change in retail; enabling more intricate data insights into customer preferences and behaviours than before, technology is also fundamentally changing the shopping experience itself.

According to A.T. Kearney, the retail industry is adopting and leveraging various technologies – from AI, to chatbots, to beacon technology and more – to make sales more effective, personalise the customer experience, optimise processes, and generate strategic insights. This also has the effect of enhancing the shopping experience for consumers, enabling convenient, relevant experience across channels.

“Great customer experience in 2018 will come from blending technology with a more personalised touch. I think that the people who can combine technology-powered personalisation with a human will be the winners.” – Karen Katz, President & CEO of Neiman Marcus Group

Preparing for Data-Driven Change in Retail

Of course, there are many additional areas of change for retail aside from those listed here. For example:

  • AI is expected to continue to take off. According to KPMG, Artificial Intelligence will gain more focus with a prediction that 85% of all transactions will be AI based by 2020.
  • Small self-service stores may increase. Convenience, demand for wider location availability, and expectations for faster shopping experiences are driving retailers to take a flexible approach to their small store strategies.
  • Quicker payments are expected. In-store increasingly needs to match the experience offered online; retailers are recognising the need to deliver a frictionless shopping – and paying – experience in-store.

Regardless, to truly prepare for change and keep pace in a competitive environment, retailers will need to consider their data – intelligent, considered insight is the best way to gain a true picture of shifting trends and behaviours. Use data to understand your customers, their individual needs and preferences, and you’ll be equipped to drive a seamless experience, that ensures loyalty and brand positivity long term.

Statistics taken from an Acxiom Retail Industry Insight Report 2018.