One of my favourite TV programmes back in the 70s was Open All Hours, a classic BBC sitcom starring British comedian Ronnie Barker as miserly grocer Albert Arkwright. Despite his stammer, stinginess and downright deviousness, Arkwright knew everything about his customers, from their favourite Sunday joint to their marital problems. He shamelessly used the information to sell more produce.
Retailers today collect nearly as much intimate information about their customers. But because it’s spread across different channels – web, mobile, contact centre, in-store and so on – and different parts of the business, such as sales, marketing, customer service and billing, their ability to use that information to sell more goods and services has slipped backwards over the past 30 years.
Many retailers are guilty of using this information in clumsy and unintuitive ways. Take, for example, that email that drops into your inbox: “Hi John!” it says, but then fails to offer anything that’s actually tailored to you specifically. It’s hardly personalisation. Retailers bombard customers such emails, so it is no surprise that a recent AIMIA study revealed that 69% of consumers are unsubscribing from most marketing communications. Banner ads too have similar negative effect.
Browsing data is useful, but on its own, it’s an imperfect mechanism for identifying consumer intent and converting it into sales.
The reason so many retailers fall short is that while it’s simple to collect data from customers, it’s very difficult to bring together enough of the right kind of information about them in a short space of time to use it when it’s still relevant.
Understanding the context behind a customer’s visit to your website is challenging, but context decays so quickly that if you can’t instantly make use of the data, the opportunity can be lost.
So what’s the solution? I work in this area and one way I see the industry moving is towards technologies that collect and process customer data, effectively “listening” in real-time to the signals a consumer generates while browsing across different channels, for example click-throughs and purchase completions. Retailers could act on this data instantly.
What does this look like in practice? Imagine a customer is browsing a retailer’s website just two months after buying a new pair of Italian black leather shoes. Traditionally, the retailer’s marketing technology might re-target adverts for shoes at the customer across the web, or alternatively, send them an email or text message offering 25% off a new pair of black shoes.
The application of context would instead allow a business to figure out on the spot that the customer is probably shopping for shoe-care products: polish, laces, protective spray, even socks, not a second pair of shoes. They could then message that customer accordingly.
Today’s marketing technology is broken. Performance rates for online ads and email marketing are abysmal. How can a 0.1% click-through rate on digital advertisements be judged anything other than an abject failure?
To take a step forward, it’s helpful to first look back. Today’s retailers have lost the ability to weave together the key criteria that determine context: what the customer has done, what they may do and what they are doing at that moment. Embraced quickly and properly understood, context has the power to industrialise what the industry might call the “Arkwright effect” and make it scalable for retailers everywhere.
Charles Nicholls is SVP of product strategy at hybris and SAP CEC
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