In this digital age, consumers can shop from any device at any time of day; and price-sensitive consumers can research goods and comparison shop before making a purchase online or in a store. The availability of the same (or very similar) products from multiple retailers homogenizes the market. Consumers also expect a consistent shopping experience between offline and online storefronts, with the ability to find or return goods across either channel. As a result, retailers must constantly evolve to reach customers, create differentiated experiences, and vie for share and loyalty in a highly competitive industry. If you’re a retailer, I’m not telling you anything you don’t already know!
The good news is the retailing model allows for a direct relationship with consumers. Therefore, retailers, unlike CPG or pharmaceutical companies, are present at the moment of truth when a customer makes a buying decision: the point of sale (POS). From this buying interaction, another opportunity arises: tailored experiences. Many small local retailers have long realized this advantage. For example, a dry cleaner recognizes a customer and has the order waiting before the customer reaches the counter. Can a much larger retailer reach this level of personalization, create customer loyalty, and drive repeat purchase? Can you do it at scale? Tailoring the experience is the new battleground.
Most retailers do not have the means to identify all their customers at POS or during the shopping experience in order to build a one-on-one relationship. Even after investing in loyalty and rewards programs, traditional retailers are able to designate only a portion of sales to a limited universe of enrolled customers. It’s both easier and equally difficult with online retail. On one hand, an online purchase requires a shipping address and creates customer identification. On the other hand, customers still browse anonymously using multiple devices before purchase.
In response to the changing dynamics of the retail ecosystem and consumer expectations, retailers recognize the importance of putting the customer at the center of their business strategy – across all channels. Those who have made customer strategy central to the overall business strategy are reaping the financial benefits. They have the capabilities to build sustainable competitive advantage by:
- Creating and managing a 360-degree view of the customer through a CRM foundation
- Micro-targeting and personalizing the media and channel experiences of their customers
- Using customer insights to inform product allocation, promotions, and pricing strategies
- Measuring media and channel effectiveness and the consumer’s path to purchase, in order to enable improved marketing investment
The key ingredient to success is Connected CRM (cCRM)™. This business strategy, developed from Merkle’s 25 year experience, represents a systematic way to identify, serve and retain customers based upon their value, through orchestrated customer interactions that improve financial results and build competitive advantage. Simply put, to deliver tailored experiences across all channels, organizational silos must be broken down or, at a minimum, they must collaborate for a shared view. With this model, a customer-centric retail organization can best leverage customer insights to drive product allocation decisions, promotions, pricing, assortment, and, ultimately, inventory decisions.
Embracing this approach takes investment, time, and patience. Successful retailers will be the ones who break down organizational silos, share a common customer framework, and provide a consistent omni-channel experience.
I hope you will take a moment to download a preview of Connected CRM: Implementing a Data-Drive, Customer-Centric Business Strategy to learn more about the strategies behind successful cCRM.