Retailers need to understand how to get maximum value from investing in a single view of their customers
Achieving a single view of your customers - with all the information about their internet, mail order and store interactions in one place - has long been seen as a Holy Grail of customer relationship management systems.
It should give you a true understanding of customer behaviour, and the ability to more effectively market to them. But it is hard to achieve, especially for retailers that are struggling to come to terms with the idea that their sales channels need to be linked at all. And it can be expensive.
So why are some retailers making it their goal, and what do they hope to achieve?
Fat Face is working towards a single customer view. IT director Tim Bird says: “It allows you to give the customer a seamless experience.”
Alison Lancaster, home shopping director for fashion retailer White Stuff, agrees saying: “Having a single customer view is important as it enables us to tailor and focus on making our customers’ multichannel journeys and experiences as relevant and successful as possible.”
But it means retailers are having to change from being product-centric to customer-centric businesses. SAP divisional manager of retail Tom Fischer says retailers are realigning their businesses. “There has been a shift from people thinking about the business from a merchandising point of view to thinking who are the people that do shop with me and who are those that don’t,” he says.
Retailers should at least be collecting purchase information from all the channels in their single view. But in an ideal world it should be more than that, according to Charles Tyrwhitt marketing director Chris Terelak. He says the shirt retailer’s single view covers purchase history, channel usage (web, mail, phone, stores) and contact history (marketing and service) overlaid with quantitative and qualitative research.
A single view maximises the potential for cross selling between the channels and allows retailers to better target their offers through customer segmentation. “It enables us to service our
customers better by making the right offers to the right customers through the right channels at the right time,” says Lancaster.
However, for many here lies the challenge. While the ecommerce side of the business has by its nature robust sales and customer contact databases, stores do not. “The majority of transactions are still anonymous,” says Fischer.
As a result many retailers are looking at how to reinvigorate their loyalty schemes. Data consultancy More2 is introducing a swipe card to the EPoS system that is non-invasive, while software supplier Torex is looking at delivering loyalty information via mobiles. “The challenge to the single customer view is how do you make it as easy as possible for that customer to identify themselves at store,” says Torex retail solutions director Richard Willis.
The single customer view also allows retailers to identify the true lifetime value of a customer. A retailer with siloed repositories of data may think a customer isn’t responding to email marketing messages because they aren’t shopping online, or think they have lost a customer when the buying channel has simply changed. It will also warn of potentially unprofitable customers, who may be apparent big spenders online but return product to stores.
Knowing the profitability of a customer is vital according to More2 commercial director Sanjay Patel. “Once you know their lifetime value then you can understand how much to invest in that customer,” he says.
Analysing such data can also drive sales opportunities in tempting back straying shoppers. “I did an analysis of a retailer’s data that showed 30% of their customers (which equated to £17m of revenue) had not been in for 18 months. Even attracting 5% of those back in would drive incremental revenues of £500,000,” says BT Expedite head of CRM Tanya Bowen.
But bringing disparate data about customers into one central location that can be viewed by all the channels is easier said than done.
“The customer often interacts with the retailers in a number of different locations - whether that’s buying something or bringing something back. All of these different transactions will hit different transaction processing systems. Equally other departments such as the marketing department will have their records of what they are sending. So in one company you have all these different interactions - all of which collect different bits of information about the customer,” says SAS solutions marketing manager Dr Charles Randall.
As they work towards a single customer view many retailers are working on data integration projects tying systems together and cleansing data. “There is a lot of work that has to be done to pull data out of different databases. Then cleaning up that data and identifying based on a set of rules, for example, that Jo Smith at one address is the same as Joe Smyth at the same address,” says Randall.
But integration of systems is vital according to Terelak. “Our technology drive is further consolidation of our retail, web, mail order and customer databases, together with development of our website and call centre technology. From a business point of view, we are focused at putting customer experience at the centre of our plans,” he says.
White Stuff is building a customer database with More2, as well as building a new multichannel ERP system with built-in multichannel CRM system. Others are making bigger changes - such as Boots, which is working with SAP on a core system replacement programme.
Prologic managing director Sam Jackson believes there is a wave of investment coming. “The challenges that a lot of retailers have is that they have made investments in web and point-of-sale systems that independently are working and building integration between those systems, and bringing that integration capability together can be quite a challenge. The mid and smaller retailers are struggling to deliver on that promise and most of that is down to the complexities and cost of integrating those systems.
“There is a big decision - you can go on plastering over the fact you have two different systems that are speaking different languages or you can take the leap and go into investment mode and get a pre-integrated system,” he says.
But retailers have long been guilty of collecting too much data and not using it properly. The danger with a single view is doing this on an even bigger scale.
Dr Randall says that retailers must have a reason for moving to a single view. “All data is useful but you have to understand what problems you are trying to solve. I wouldn’t recommend just trying to create a single customer view for the sake of it,” he says.
Those that think the single customer view is just the latest marketing fad need to think again. “The single view is absolutely fundamental,” says Russell Dorset, sales and marketing director for multichannel software provider Maginus, which provides a multichannel communicator to allow retailers’ different systems to speak to each other. “Unless they provide that single view then retailers are going to fall behind, because customers are demanding that they know all about them now and want a seamless experience,” he says.
Oracle senior director for retail Sarah Taylor agrees. “A single view is key but it is the response to that information that makes retailers successful using it,” she says.
For multichannel retailers - and especially those with mail order and catalogue businesses too - it is past the time where they can just talk about wanting a single customer view. “It is a business priority for Fat Face but it takes a while to adjust the processes and systems to meet that requirement,” says Bird.
Those that are ignoring it will fall behind according to Bowen. “It is a real competitive advantage now, but in 12 to 18 months from a service point of view customers are going to expect it,” she says.
Terelak concludes: “A single view is a baseline expectation for customers and there is trouble waiting for businesses who can’t provide it. Customers expect to be treated in the same way however they interact with you. Different views mean at best confusion and at worst complete alienation.”