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How customer intelligence is revolutionizing the retail industry

Joseph Brady, senior director of digital marketing for Reliant Funding, maps out reasons why retailers must embrace customer intelligence.

Photo by iStock.com

June 25, 2019

By Joseph Brady, senior director, digital marketing, Reliant Funding

Customer Intelligence (CI) is information derived from customer data collected from both internal (generated through interactions with the customer) and external sources (demographic data like age, income, and occupation, etc.). The purpose of CI is to better understand customers by analyzing their buying patterns and their motivations to drive future growth of the business.

The modern retail customer

We are in the age of the informed customer. He/she has unlimited access to information about a brand, its offerings and also about its competition. Such a customer is also a less loyal one. In fact, 79% of retail customers said that they would shift retailers within a week of experiencing bad customer service. The modern retail customer is also more demanding. If they are unhappy with a product or service, they will let you know and will expect a response from you. Businesses that don’t care about angry customers are risking a PR disaster. How can retail companies provide the best service? The answer lies in customer intelligence. Let’s look at how CI is shaping the future of the retail industry.

Personalized discounts

Retailers with frequently returning customers can reward their loyalty using IoT and CI. Retailers do this using sensors installed around the store. These sensors send personalized discounts to these loyal customers’ smartphones (via SMS or app notification) when they are near certain products.  One thing to take note of while doing this is to make sure that customers have opted themselves in for the loyalty program.  

Retailers can use their website for online-driven-offline-sales. Track which products customers have been looking at online using tools like Hotjar. The next time they come to the store, send them personalized discounts for the same or similar products. This is an efficient way to maximize conversions rather than using a general discount.

How well you incorporate all this into your retail business depends on your creativity and foresight.

Understand customers better

Data can be captured anonymously from electronic devices and analyzed so that retailers can understand customer preferences better. Whether the customer is using the website or walking around at the store, anonymized versions of the data can be captured, transmitted and analyzed. The more devices from which data can be captured, the more information that can be derived and acted upon. Retailers can use this to create customer profiles and understand & anticipate customer’s behavior. This contextual data will help improve the location of in-store product displays, improve the effectiveness of campaigns and communications in high traffic areas to improve point-of-purchase influence. Retailers can also hire and manage retail staff using real-time data so that the store is not overstaffed when not required.

Getting customers into the store

People are never too far away from their smartphones. And they almost always have the data/Wi-Fi/location turned on. This presents an opportunity to send personalized promotions when they are near the store. Customers can be attracted to the store by creating interesting in-store experiences. For example, Browns East is a London based retailer that has understood that people have short attention spans and has planned for a complete transformation of the store every two to three weeks. The store is expected to have mobile Point of Sale (PoS), smart mirrors, and an app for customers to share their purchase history and wish lists with the store staff. Similar type of strategies can be used by other retailers as well. Most small retailers hold themselves back from using these strategies citing financial problems not realizing that there are retail business loans that can help them out.

Supply chain management

As retail customers are increasingly demanding faster high-quality products and faster delivery, CI can help optimize speed and accuracy through the supply chain.

Using predictive analytics, retailers can predict what products and brands will be in demand during a particular time period. Every component of the supply chain, from planning to production to return can be optimized for efficiency.

Visualize real-time changes in the market

Understanding the market has now become an everyday challenging requirement for businesses of all kinds. In a crowded field like retail, it means that even a tiny break in monitoring the market can cause a huge setback in terms of acquiring new customers, revenues and customer satisfaction. Customer intelligence provides actionable insights from a stream of steady data. The customer data lets you comprehend broader market trends, and in return, it lets retailers integrate predictive analytics and best practices into their business.

More efficient sales

No business can survive without selling. Sales should be qualified not by their short-term value but also by how they translate into repeated business. Multiple factors influence the conversion of a returning customer. CI is used to improve the productivity of the sales team by streamlining the sales process. Identify what sales tactics work by analyzing customer data and feedback. Using CI to identify the right strategies will improve efficiency, reduce wastage and to provide better training to employees.

Build a better persona

A retailer should always focus on the customer. Regardless of the variety of promotions and strategies that customers are exposed to, they will only pay attention and react to what resonates with them. You can use data collected from multiple sources to understand your customers better and build well-informed personas that speak to each of the customer types. When you have a clear understanding of who your customers are what they care about, it becomes easier to create a corporate and brand image that closely aligns with their preferences. Integrate these personas into your marketing strategies from whatever goes into your social media profile to your emails.

It was just a matter of time before customer intelligence, and its many benefits made its way into the retail business. The future lies in providing exceptional customer experience regardless of whether your store is online or offline. Learning from CI can help retailers do this. That is why retailers need to invest in customer intelligence.