How companies can use data and analytics to accelerate growth

In today’s competitive retail environment, personalisation and CX need to go hand in hand. In order to provide an effortless experience to your customers you want to talk to them like you are their friend, and create that lifelong, emotional brand connection marketeers strive to create. If done right, this loyalty will result in a profitable customer who will continue to return to your brand time and time again.

Truly special CX means knowing your customers inside out – who they are, what they bought from you, what’s on their wish-list and what channels they are shopping on. Meanwhile, personalisation means giving them something a little different, a bespoke experience, and the ability to offer your products and services to customers at exactly the right moment in their lives, so they are delighted you’ve suggested a product before they even realise they needed it themselves.

But without data, all of this is impossible. You need to be securely collecting the right data from all your multiple different channels and ensure your various customer personas are linked up using the best-in-class technology to determine when a customer first walked into your store, had a great experience with a colleague, and then completed the purchase later from the comfort of their favourite arm chair.

According to our Customer Experience Trends 2021ts report, 71% of European customers now expect a personalised shopping experience, with Spanish (80%) and Italian (81%) customers leading the way in demanding a bespoke service, with 55% of the more data-cautious German customers expecting this right now.

Hyperpersonalised engagement

Think about the way many consumers now listen to music – Spotify’s streaming platform is famous for its 70m-strong library, but how do users even find songs to listen to? Spotify uses machine learning to personalise the listening experience, while its Discover Weekly playlist offers individually crafted playlists to help users find new music that matches their preferences. So if consumers are having their music curated for them, no wonder European customers are demanding personalised shopping experiences.

Some start-up retailers are even building their entire business model around personalisation. US fashion retailer Stitch Fix uses AI to recommend customers clothes it thinks they will like. Shoppers receive a box of clothes in the post and only pay for what they keep. And this type of personalised curated retail model has sparked a number of similar ventures, with Spanish Lookiero raising an impressive $19m from MMC ventures in 2019, which it plans to use to expand its business into other EU countries and the UK. Meanwhile, German-founded Outfittery offers a service for men which has raised $60m since 2012, and Britain’s Thread has raised another $40m.

While examples like Spotify and Lookiero et al may seem overwhelming to a retailer which currently doesn’t use data to effectively personalise its customer experience, you can start small – even something as simple as using local weather information to tailor your homepage and deliver appropriate content based on your customer’s region is a good place to start and doesn’t need mountains of GDPR-compliant customer information to achieve.

Clearly, it’s easier for a pureplay retailer to provide a personalised service, as customers naturally provide more data online than in store. But traditional retailers can still offer highly personalised experiences by sending out-of-stock reminders and curating wish lists, all supported by having brilliantly-trained and enthusiastic customer service representatives. Even something as simple as offering in-store customers a digital receipt allows you to take a customer’s email address and match that bricks & mortar store shopper with their online persona – this data bridge is the key to creating a multichannel personalisation strategy.

Make data a strategic investment

Research from McKinsey & Company suggests that retail lags behind the banking and telecoms industries when to comes to data analytics, despite retailers sitting on a wealth of transaction data. The consultancy says the costs of implementing technology to analyse data has held retailers back from making the initial investment, as well as a lack of awareness of the impact of customer analytics on the business.

While the toolkit needed to mine customer data is initially an IT project, you need to think of this as a strategic investment and involve all areas of your business in the roll-out. From IT, through to eCommerce, marketing, operations, security and even stores, because every part of your business will benefit from data analytics. Another consideration should be to look at hiring a chief data officer who will really be able to drive data analytics from initial roll-out phase through to day-to-day use – you want to be in a position where your business would no longer be able to operate without this critical customer information, so having an internal stakeholder owning this project will be helpful in the long-term.

McKinsey warns that a “narrow focus on technology and tools rather than staff and processes” is a common failing in retail due to the lack of investing in in-house expertise and developing proprietary analysis models – “the ability to swiftly translate data into concrete action is what counts”.

Don’t drown in data

Retail is moving in the right direction, albeit slowly, according to our research companies are managing 11% more data than in 2019, meaning more efficient resolutions and improved personalisation opportunities.

What is absolutely critical is that you are collecting the right data and you are using that data to improve your business. It’s so easy to turn ‘on’ data analytics and let information flow into your analytics toolset and to suddenly be overwhelmed by statistics. You need to make sure you don’t drown in this data, otherwise you will never turn it into actionable insight. This is where ensuring the project doesn’t just sit with the IT department is so important. By involving key stakeholders from various areas of the business, you can ensure you are delivering the right data to the right people who can use it to create actual business change on the basis of hard evidence of what will lead to success.

Keep on top of data developments

Like many of today’s digital ambitions, you can’t simply throw money at data analytics and consider that a tick-box exercise will suffice. The way we use data and learn from it will always be constantly evolving, even more so as technology continues to advance at an unprecedented rate – from the tools we use to mine the data becoming more and more sophisticated, to the increasing number of devices used by customers, such as smart home technology and even new social media platforms which are taking off all the time. These are just more channels you need to consider whether to ‘plug in’ and mine information from.

But what we need to remember is why we are putting in all this effort – businesses need to use personalisation to build better relationships and emotional connections with existing customers, while attracting and winning new ones. From a commercial perspective, this will lead to a measurable increase in brand loyalty and repeat purchase.