What if you were able to know, with near certainty, that your customer would prefer one specific product over another – and that her chances of purchasing it are 84% higher if it’s in black rather than any other color? Further, that she’d buy it at a 10% price premium – if you can get it to her tomorrow?
The fact is, this is happening today. Smart retailers are leveraging the info surrounding their customers to profit in ways their competitors are just beginning to understand. The good news is, you can do this too, and get way closer to your customers as a result. A couple days ago,my wife and I were discussing the article I wrote last week on Amazon’s recent predictive delivery patent, and the implications for any company (like the ability to drive greater loyalty, wallet share and engagement with their customers).
Our discussion was about the retail experience, specifically focused on a clothing retailer she loves – the in-store service and product selection at this company is far better than its main competitor, yet she has purchased far more from the company whose experience she doesn’t like as much. From her perspective, the products are about the same, the brands equally strong. So, what gives? Isn’t great experience the driver of loyalty? After all, that’s the mantra our firm is built on.
Enter Big Data. From sensors in our phones or embedded in products we use to loyalty cards, social media sites and transactional records, we each leave behind an increasingly vast trail of user-generated digital breadcrumbs. These digital trails are the foundation upon which Big Data is built.
When it comes to this clothing retailer, it’s down to how well one firm gathers and leverages individual customer data to anticipate customer needs, providing my wife better information around the products most relevant to her. Even though the in-store experience – service, selection, and attitude – is far less appealing at the second company, the “lesser” company really gets how to leverage what they know about her, and does so quite successfully.
Put another way, when a company can proactively leverage customer data to anticipate the needs of its customers, they can trump other purchase drivers (such as a category-leading in-store experience). As a result, she buys more from the company she likes less.
The race is on to make the vast and growing volume of data that surrounds your customers easily accessible and understandable, as well as actionable; in pure commercial terms, the potential to leverage customer data to drive profit is staggering. More importantly from your customers’ perspective, you can deliver massive benefits and convenience to them while you’re at it. Talk about a classic win-win.
When it comes to retail, my wife and I talked about dozens of ways the company she prefers could better leverage her data to enhance her experience, and dramatically benefit their business as well. Here are 5 of them:
The ideas above are neither unique nor, in this day and age, groundbreaking. But the concept behind them is nothing short of radical: use customer data to better understand and benefit your customers. Yet many companies still either don’t get it, or don’t execute well.
Case in point; we’ve been talking about a company that absolutely nails the in-store shopping experience… but doesn’t seem to leverage that interaction to deepen the relationship across channels, much less to drive more sales.
Today, your competitors can easily duplicate your products, supply chains and distribution channels (think Microsoft setting up stores a few 100 feet from every Apple store…). They can match (or beat) your prices and your service levels.
But what they cannot do is truly understand what makes each of your customers different from – and similar to – your other customers. And they can’t see where and how to use that data to serve them better than anyone. Today, your knowledge of your customers is one of the greatest competitive advantages you can have.
That’s why those who wish to thrive will become masters at using data to make their customers’ lives easier, and engage with them more deeply. By leveraging the information that surrounds your customers, you’ll improve their experiences, along with your top- and bottom lines. At the end of the day, your customers want to be served, and they want to buy – they just don’t want to be sold to.
And they expect you to help them, in the ways they prefer.