Customers are expecting greater personalisation in light of the greater availability of their personal information. But new research demonstrates that brands are struggling to respond.
Big Data revolution sending customer retail expectations skyrocketing
Big Data revolution sending customer retail expectations skyrocketing
There has never been a better time to understand your customers and drive loyalty through personalised services, with more consumer data at our disposal than ever before.
But with businesses struggling to glean valuable insight from the data, and customers harbouring higher service expectations in light of the availability of their personal information, the Big Data revolution could be more curse than blessing for businesses – particularly as consumers have no reservations about switching provider if their escalating standards are not met.
This scenario is detailed in a new survey of 100 retailers by SAP, demonstrating that the much-vaunted Big Data revolution is both a challenge and an opportunity to businesses.
"Retailers have a real challenge on their hands getting to grips with the volume and the variety of data that they're now capturing through the various different touch points and sales channels that they have with customers," says Chris Osborne, retail principle at SAP UK & Ireland.
"Our research found that 88% of retailers claim to be experiencing problems accessing any kind of valuable insight from the data they have. Meanwhile, nearly half (49%) of the retailers said that the availability of data had led to customers expecting improved service.
"So there’s a double-edged sword in that consumers are providing lots of information, either directly to retailers or out through their social networks, and therefore there’s an expectation that retailers and other organisations will do something with that and they'll get a more personalised service. But then from the retailers’ perspective they're having real problems in terms of pooling all of that together and getting something from it that makes real sense and allows them to differentiate themselves."
Capitalising on data
The survey demonstrates that there is a great deal of potential for brands to capitalise on the data at their disposal, with over three quarters (78%) claiming that their customers have become more responsive to offers. At the same time, 75% of them report a rise in customer demand for a more personalised service. This, Osborne says, leaves organisations with multiple motivations to crack the conundrum of delivering a personalised service – although they are often left with the question of ‘how’.
"The answer to this is essentially to try and get a complete view of the overall customer," he continues. "Not only in terms of their shopping behaviour but also their attitudes and the sorts of preferences that they have in terms of products but also in terms of service - where does this person tend to interact with me? Is it over the web? Is it via their mobile device? Is it in a store environment? Where do they like to get their products delivered to - into their local store, at their home address or office? Try to capture softer, less structured data around people's sentiment towards you as a brand and try to pool that together into one consolidated view of the customer which you can then use to tailor how you interact with that customer going forward."
Organisations can further generate value by getting an end-to-end view of the overall customer experience and where their customers are in that process at that particular point in time.
Historically, Osborne says, most retailers capture data from the point of sale to establish what's happening from a store perspective, while their contact centre may source data about complaints or comments, while there may also be a separate system that looks at clickstream data from their website. However, without having the ability to look at all of these areas in one single view, businesses will find it difficult to know where a customer is in the overall buying experience, whereby they’ve done some research online, gone into a store and talked to somebody, rung the a contact centre but haven't yet made the purchase.
"If you can piece all of that together and try to understand the infection points in that end-to-end experience and understand when somebody is likely to be making that final purchasing decision, you can really influence that by getting the right message to them at the right time," Osborne explains.
And ‘at the right time’ is absolutely key – achieving all of the above in a timely fashion is as important as sending the right message, and customers are increasingly expecting as much.
"It's not really any good these days for retailers to be able to pool together data through batch feeds from point of sale applications or ecommerce apps, spend weeks drawing it together in some kind of view that they can analyse, do some analysis for it and then maybe send out a direct mail shot with some promotions for whatever products it is that they think they might be interested in. The expectation now, from a consumer's point of view, is to interact with you in real-time, sending information, buying things through a mobile device potentially actually standing in your store. And if you can’t do that they will ask why you can’t deal and interact with them in that sort of real-time fashion."
The wrong priorities?
Despite this, the survey suggests that seven out of 10 retail companies are more likely to invest in customer-facing technology rather than back office technology in the coming year. This, Osborne admits, doesn’t jive with the challenges portrayed elsewhere in the study – and could lead to problems in the longer term.
"From an IT perspective, retail is trying to understand how they can deliver this capability in real time, which obviously is really challenging. The research is finding that companies are more likely to invest in customer-facing technology than back office technology during this year - and that's good in a way because they’re starting to improve that interaction process, but that needs to then be integrated into the back end systems.
"We’re not just talking about presenting the right content on the website, we're also talking about making sure that we understand where the inventory is. For example, across the supply chain network we want to make sure that we've got the right number of staff in our stores and people with the right skills to be able to deal with people’s enquiries. We need to make sure that we’ve got the customer service centre staff trained and having the right information available to them to be able to deal with the sort of queries that customers are likely to have."
And Osborne concludes that if businesses really are to meet rising customer expectations, they may have to rethink their priorities.
"The key point is that from an IT perspective a lot of people seem to be focusing in on doing things like mobile apps and improving the look and feel of their website, but unless that gets filtered down into the back end systems which support the overall operational running of the organisations then actually you're almost certainly setting yourself up for a fall there because you're not going to be able to fulfil the requirements that those consumers have."