Article

Experiences consumers want versus data retailers need; what's ahead?

Customer relationship strategies are impacted by more devices, more data, more category disrupting innovation and deeper customer relationships. Retailers need to have a strategy for each one of these elements.

Martin Gilliard, Facebook, Fang Cheng, Linc Global and Scott Shambert of Performics discuss customer engagement.

February 15, 2019 by Elliot Maras — Editor, Kiosk Marketplace & Vending Times

For several years retailers have been deploying e-commerce, social media and other customer engagement strategies that have delivered unprecedented amounts of data.

But is the data delivering retail strategies that create more successful customer experiences? A panel at the High-Tech Retailing Summit at the recent CES show in Las Vegas tackled this complicated question head on.

Brendan Wichter of Forrester Research stresses the importance of having the correct customer relationship strategy.

Today, customer relationship strategies are being impacted by more devices, more data, more category disrupting innovation and deeper customer relationships, said panel moderator Brendan Wichter, vice president/principal analyst at Forrester Research.

Retailers need to have a strategy for each one of these elements — in that exact order. Creating the customer experience is the last step — never the first, he said.

"How do you think you can create customer experiences if you don't have those strategies in place?" he asked. "You'll be guessing, using your opinions, and you probably won't get the outcome that you're looking for."

Retailers and brands make the mistake of doing things because it is what they want to do as opposed to what customers want them to do, Wichter said. "'We want' is a very different statement than 'our customers want,'" he said.

"You can't be customer obsessed," he said. "You have to be data-led. Without data, you're just another person with an opinion."

Voice and visual and mobile

Voice and visual enabled devices are necessary tools nowadays, Wichter said.

"Customer obsession through data mastery using voice- and visual-enabled devices is the key to retail success with initiatives that matter most in 2019 and beyond," he said. These elements drive strategies like omnichannel commerce and customer personalization.

Wichter then asked Scott Shamberg, CEO of Performics, a marketing performance agency, to explain a study his company conducted on the use of visual and voice search tools. The study found 36 percent of respondents have performed both visual and voice search.

The Performics study, conducted with Northwestern University, revealed visual information is preferred over text by at least half of respondents in all retail categories except for electronics, household goods and wine and spirits. The study noted image-based social media platforms, such as Pinterest, Instagram and Snapchat, tend to have higher digital satisfaction scores than platforms that are not image-based, such as Facebook and Twitter.

Shamberg said voice is working in tandem with visual search. There is an expectation to initiate with voice and see a return through visual.

"Those two things are connected," he said. "There's a personal intuitive approach with voice, and frankly a slightly higher trust level and a return when I'm asking a question versus text."

Asked how the expansion of voice devices in the home will impact the use of mobile devices, Shamberg was uncertain, but he said mobile will continue to play an important role at retail.

"Voice and mobile are already connected, but the question of whether or not voice will expand mobile shopping is a good one that can be answered mostly around behavior," Shamberg said. "Consumer behavior, to date, leans towards leveraging the connected home for shopping, and Alexa most prominently. This is somewhat surprising given that Siri was early to market, but also should tell us something about the efficiency of the different platforms."

"The behaviors today allow Siri to answer questions, like who played a part in a movie," he said. "Whereas Alexa, sitting on our kitchen counter, can make sure I have food for my dog when I need it. In this regard, it's an arms race to see what device, and therefore company, can own voice-initiated shopping. Right now, connected home is beating mobile."

Data privacy, context and company culture

This discussion naturally led to the issue of consumer privacy.

"At the end of the day, there's an expectation on the part of the consumer about the experience that I'm going to have, and I'm willing to make a value-based exchange to give up some level of my own data," Shamberg said. While Starwood had an issue with privacy last year, Shamberg said, he is not going to stopped patronizing its properties.

The panelists also discussed the need to recognize the importance of context in evaluating the benefits of consumer data.

The most important thing to think about when using data, said Martin Gilliard, head of industry, retail superstores and groceries at Facebook, is not the amount data collected, but the context of the data.

"Data without context has zero value," he said. Companies that understand the context of their relationship with their customer know not just what they bought, but where they bought it, the time frames that they bought and other information about the customer.

"The power of Facebook is being able to connect with that customer," Gilliard said, since the customer is spending a lot of time on Facebook apps. "That's the best way to use Facebook — when you're actually using your data in context," he said.

"The challenge is how do I turn each conversation into not just an opportunity to promote my brand or communication, but it could be a transaction that happens," Gilliard said. "You're trying to funnel customers to do certain things based on a company led initiative versus a customer led initiative, and so you have to find places and partners that allow you to be able to create that experience for your consumers at scale." This is personalization at scale that can take place at any customer touch point.

When information about the customer is shared across the organization, and the organization understands what the customer cares about, "you understand what experience to create next for them," Gilliard said.

Personalization technology in retail is being very narrowly associated with product recommendation, he said, which is a mistake.

Personalization can be used to ask the customer what information they need and reduce friction in their experience. Company culture also plays an important role in introducing change at retail, the panelists agreed.

"Don't forget about culture and organization," Wichter said, as all the tech in the world won't help if the culture and organization don't make use of it.

"You have to fix the non-technical problems in your company as well," he said. "Have a roadmap for your culture. Have a roadmap for your organization."