Has managing the retailer-customer relationship become harder with the growth of data, or easier as technology advances?

Mobile shopping is just one channel providing a plethora of data for retailers to analyse

Data analytics is one of those things that sounds easier than it is. It’s great in theory, and a single, cross-channel view of the customer is sold as the halcyon dream for every retailer.

But often there is something more pressing to be doing, and building one giant, interconnected database with clean data and perfect analytics is also a lot harder than it sounds.

It’s only necessary to look as far as Tesco and Amazon to see what a challenge it is to get data analytics right. Both companies have resources others can only dream of, as well as some of the brightest minds in retailing beavering away at data projects.

But neither has completely cracked it. Amazon’s personalised recommendations are sometimes either too vague or just plain wrong, and no bricks-and-mortar retailer - not even Tesco, with its decades-old, widely used Clubcard - has managed to truly link store and online customers yet.

Too hard to do?

“A single customer view has been on the ‘too hard to do’ list for a long time,” says Richard Small, a partner at Deloitte. “My first conversation about this with a brand was in 1998.”

So if the biggest, most advanced retailers in the world can’t achieve the perfect view of customer data across channels, is there much point in other retailers attempting to do it?

Small says it’s absolutely worthwhile - it may be the case that some, or even all, retailers never get to that ideal state of one big database with every bit of useful information on a customer stored on it. But moving slowly towards that point is still rewarding.

“Each project pointing in that direction is individually valuable,” he says.

“It’s pointing towards something that might never happen, but if you get to 80%, you are well ahead of thecompetition.”

Customer relationship management (CRM) has become increasingly complicated as the range of shopper data available becomes wider, but the technology used to deal with it is similarly more advanced - Small says cloud technology has been particularly useful for retailers looking for cheaper options on data storage and analytics.

And the number of companies offering analytics services has mushroomed.

Aiming for micro-segmentation

While suppliers have responded quickly to the changing nature of CRM, the job of managing a CRM programme has completely changed from a retailer’s point of view.

Online purchases and in-store activity are key areas for data collection

Online purchases and in-store activity are key areas for data collection

Simon Robinson, marketing director at marketing cloud software and services company Responsys, says: “Retailers today are being bombarded with data from a plethora of new digital channels - email, mobile, social and web - that consumers use to engage with brands from any device, anywhere, at any time. As a result, CRM has transformed into a completely different task.”

Tackling it bit-by-bit is a popular approach. B&Q, for instance, is working with mobile agency Grapple and has implemented a mobile CRM strategy designed to drive footfall.

The DIY specialist is targeting shoppers who have already downloaded its app with push notifications - messages that appear on their smartphones to inform consumers of offers - and Grapple chief strategy officer Adam Levene says the project has had a positive effect on conversion and usage of the app. “We’ve seen huge spikes in repeat engagement,” he says.

The technology available today is equal to the challenge posed by the proliferation of data, but what’s crucial is that each retailer has a vision of where it wants to be. Small says: “You have to have a view of where you want to get to.”

Micro-segmentation is good to aim for, he says. It means collecting customers into ever smaller groups. Instead
of marketing to all men in the same way, for instance, a different approach could be used for those over and under 40, or fathers.

“You learn things from smaller segments that you don’t learn from very big segments,” he says.

A clear quest

Adam Stewart, director of marketing at Rakuten’s Play.com, agrees the most important aspect is clarity about
what is needed from the data. “To avoid getting lost in a sea of spreadsheets it’s important to establish a clear set of questions that you want your data to answer. We’ve used data to optimise email marketing campaigns and we’ve found that high levels of targeting based on data sets can deliver more than double the revenue of untargeted communications.”

One other option that may work well for smaller retailers with fewer datasets to manage is to roll out a cross-channel data management system, which can provide a single view of data in a centralised dashboard.

However retailers choose to approach the issue, it’s pressing - shoppers are leaving information on their buying habits across a wide range of touchpoints. It’s up to retailers to harvest this data and do something with it - it’s not easy, but a piecemeal approach may reap rewards.

How the anglia Co-op is using data analytics

  • Richard Feest, head of IT at the Anglia Co-op

“One of the challenges we have at Anglia Co-op is that we have a collection of customers who we speak to in different ways. We have our members, who come in and shop regularly in our stores, but we also have non-members who pop in and out making regular purchases, but are yet to sign up to the whole principle of being a member.

It’s great when you have got a member shopping in your store because you know so much about them, such as their email address or postal address. This allows us to engage with our customer base, further based on their shopping habits.

As a company our members are very loyal to us. However, our non-members are always affected by the promotions from our competitors such as Tesco and Morrisons, particularly since Christmas when we saw an increase in promotional offers.

This has tended to be in the realms of the basket-builder type promotions where people are incentivised to
come in to make a repeat purchase over a number of weeks and then get rewards after a period of time. What
this means for Anglia Co-op is that our biggest challenge of all is competing with our rivals.

We’ve been working with business services provider Omnico to look at business intelligence, which has resulted in the launch of our e-coupons targeted particularly at non-members. Since the launch we’ve seen lots of new customers, as well as non-members who previously would have only visited once a week for a small shop but have since stepped up a level and are spending more in our stores.

Our analytics tool is key when looking at competitor activity because it helps us to rapidly look at the customer base that we’ve got to see how those shoppers would react to a similar promotion.

It enables us to then put a promotion in very quickly. We can get the promotion up-and-running and then we can use the analytics tool to see how the members and non-members are shopping and responding to that promotion in our stores.”