We are in an exciting time of consumer behaviour drastically changing, but are retailers adapting fast enough to capitalise on the modern customer?
A great example of this is the loyalty card, but are they really providing value to the customer? It's common knowledge that such physical cards often remain unused, adding little influence to a customer's purchase.
But in a period which is still tainted by the 2008 recession, surely retail firms should be closely monitoring and considering how loyalty programmes can effectively reach their customers in new and relevant ways?
The loyalty card when first launched by Tesco was a great step forward in effective data management. The programme established a repeatable process for analysing consumer data and personalising the relationship between retailer and consumer.
With cards losing their shine and digital wallets soon to take off, now it's time for companies to rethink how data from different sources can enable effective interactions with their customer base.
The tactic of offering points schemes and vouchers, when prices may be cheaper elsewhere, is something which needs to be urgently addressed. What is needed is the ability to leverage social media and the Internet of Things to provide a fresh, innovative and personal approach to individual customers.
But how can this effectively be put into practice when discount stores such as Lidl and Aldi are offering brand products at rock bottom prices? This is where the need for gaining an understanding of an individual's network is vital.
Again, with the current economic climate, retailers need to have a holistic view of their customers.Gaining an understanding of an individual's network rather than just simply their own transactions will uncover trends and potential new opportunities not otherwise identified.
Social media integration
This can largely be achieved through the integration of social media data. Combine that with an awareness of customers' mobile activity, and you have an opportunity to create personalised offers with tailored benefits that will undoubtedly drive revenue.
Further, this can be executed in real time, offering in-store promotions when individuals are actually purchasing items in that store. This creates a buying experience not seen before; one which creates loyalty in an environment that instantly rewards the customer for their purchase without asking them to lift a finger.
With new, lower-cost technologies such as Hadoop, there is the potential to achieve more while spending less. Obviously, a robust data management system needs to be put in place, which enables real time analysis of the multiple types of data available from social, mobile and product data. By turning this data into valuable insight, retailers can develop a robust illustration of the individual's network and closely monitor consumer behaviour.
So, the loyalty scheme is not dead, it just needs updating for our modern social and mobile world. To do that, organisations need to be able to integrate their own data with social and device data – in real time.
With Informatica's ability to handle, integrate and manage large amounts of structured and unstructured data, a retailer can identify and develop loyalty techniques which will fit with customer demands. This way, the behaviour, needs and priorities of an individual can be interpreted to develop a solid loyalty scheme, enabling the retailer to keep one step ahead of the competition. It will be exciting to see who will become the leader of this evolution.
- Article by Bert Oosterhof, Director of Technology EMEA, Informatica