The road to retail salvation is personal and predictive
By Gordon White, general manager Americas, The Social Client (a company of Acticall Sitel Group)
The retail industry is having more than just ‘a moment' of digital transformation. We're seeing enormous digital disruptions across the industry and this technological change is promising for the future of retail. Companies within the space are leveraging innovations, such as chatbots and artificial intelligence, to reach consumers, build trust and loyalty, and continuously engage with digitally-native consumers.
At the heart of retail's digital transformation is consumers' demand for real-time engagement and personalization throughout the entire customer experience. Amazon is a great example of a company that continues to disrupt ecommerce by bringing customized and sophisticated pricing algorithms to the masses. New programs like Prime Wardrobe's "try before you buy" feature further enhances the customer experience by bringing the benefits of brick and mortar shopping online.
The Boston Consulting Group (BCG) reports brands with personalized experiences that incorporate "digital technologies and proprietary data" have seen revenue increase by six to 10 percent, which is two to three times faster than brands that don't have personalization programs in place. Additionally, only about 15 percent of companies, most of which are tech companies and digital native brands, are considered "true personalization leaders."
For retail brands undergoing digital transformations to become personalization leaders, there are many challenges and opportunities to face. Here are three things retail brands should remember when developing personalized, digitally transformative customer strategies.
Use customer data "more naturally"
Consumers are more digitally connected to brands than ever, and expect instant satisfaction. According to Deloitte, shoppers increasingly want their favorite retailers and brands to immediately fulfil or even predict their needs and desires. To drive sales and loyalty, retailers are leveraging digital tools to personalize, differentiate and instantly improve the customer experience.
Through the rise of mobile commerce connectivity, brands now have access to enormous amounts of customer data that provides insight on customer's shopping behavior, preferences and needs. While businesses are using data to their advantage to personalize each customer experience, retailers have a great responsibility to transparently use this data to provide better service to the end user.
When it comes to the type of data retailers should focus on curating, small and smart data — not big data — is what will differentiate retailers in today's market. Small data focuses on the causation of customer interactions, getting to the heart of a purchase or a site visit, and uses more empathetic gestures to personalize customer experiences, such as a home goods store sending a "congratulations on your new home" card once a customer shops in a new home furniture section; while big data most often uselessly makes broad correlations about large subsets of consumers, negating all aspects of customer personalization. Consumers want retailers to use the small data cues they provide to interact and meet their needs in a way that feels more natural and non-intrusive.
To curate successful digital transformations that harness smart, small data, it's imperative retailers build stronger connections between IT and business departments, like sales and marketing. In the end, brands that involve all business units to drive personalized, emotionally intelligent, data-driven customer experiences will maintain a competitive position in the market.
Engage consumers instantly
With 79 percent of U.S. consumers shopping online and spending 66 percent oftime engaging with online retailers via a mobile device, the retail industry is past the mobile tipping point; creating meaningful omnichannel mobile engagements is not just a nice to have, it's the way of doing business. Moving forward, the next layer of online engagement revolves around serving customers instantly at the micro level. This will require retailers to leverage digitally transformative technology, especially through artificial intelligence and machine learning, to connect shoppers instantly to the products, services and support they demand.
From Walmart's automated grocery kiosks to Walgreen's use of AI with "Pharmacy Chat," to Patron's partnership with Twitter to roll out Direct Message chatbots, brands across the U.S. are harnessing AI to perfect the customer experience and engage with their customers in real time.
Chatbots are an important part of the retail marketers toolbox as consumers demand instant access to services and insight they need to make more informed purchases. Instant lines of communication have never been more important as Google found 97 percent of people use their phones while shopping to research further information about a product. Chatbots create an instant and predictive communication channel for consumers, and have even proven useful in reaching younger generations of consumers. Retale reports that nearly 60 percent of U.S. millennials have used a chatbot, and more than half of those who had never used a chatbot said they'd be interested in trying one.
Consumers today will use the same channels to communicate with brands as they do for friends and family, and brands who use social communication tactics to reach consumers will maintain advantage over competitors. Messaging applications and chatbots are a natural fit for the mobile-first shoppers of today and are changing the way consumers and brands interact on a daily basis.
Maintain the right balance
While digitally transformative omni-channel technology, such as chatbots, messaging platforms and more, pose great opportunity for brands, retailers should be mindful of maintaining the right balance of human and machine interactions.
While chatbots are effective in engaging with consumers on the surface level and handling "easy" customer interactions like online billing, booking a restaurant or reserving a rental car, the technology is not yet so advanced — and it may never be! — that chatbots can fully comprehend and emulate human emotion - especially when frustration, anxiety or anger come into play.
This is where human agents step in, who must now have the sophistication of digital fluency and old-fashioned communication to build customer relationships and walk them through their more complex questions and concerns, like troubleshooting an issue with a product they ordered or understanding a mystery charge on their account. What's key is for brands to use chatbots in concert with live agents, who will be able to provide the "human touch" where technology cannot - yet.
Overall, the retail industry continues to digitally transform to meet the personalized demands of today's mobile-first consumer. As brands evaluate and innovate the way they engage with consumers, it will be important to curate the right mix of human-to-human interaction alongside technology to personalize experiences for each customer. In doing so, retail leaders will see greater brand awareness, loyalty and success for the future.