Data Driven Retail: Extracting Value From Customer Data
Getting Customer Data Right
Among the industries that have seen their traditional ways of doing business upended by the rapid advent of the internet and mobile device usage, retail is perhaps one of the most affected. On one hand, technology has introduced customers to new buying behaviors, and the rise of e-commerce has provided retailers with new avenues to reach those customers. On the other hand, it’s now increasingly difficult for midsize retailers to remain competitive against the ubiquity and scale of global online marketplaces while margins dwindle and the costs of meeting customer expectations only continue to rise.
To respond to these challenges, retailers are increasingly turning to data and analytics to make better business decisions and guide customer marketing initiatives. While some retailers are still learning how to best collect customer data, others possess it but are unsure what to do next. This brief is focused toward retailers in the latter category, discussing how data can be used to better reach customers and compete more effectively across channels.
A top priority for retailers is creating more personalized, customer-centric experiences, and doing that starts with knowing the customer. To get a better sense of their audience, retailers must first understand how to bring together external data sources, such as demographics, location and market data, with internally held customer data, such as transaction histories and loyalty status. Once these sources have been identified—and the data has been checked for accuracy—retailers can begin creating a detailed understanding of their customers, ideally on the way to establishing a trusted single view.
A single customer view is a way to bring everything that is known about a customer into one manageable place, unifying it into a “golden record,” or single source of verified information, linked to a known physical or digital address for each customer. That record can then inform manual and automated decisions, such as those around intelligence-based marketing, planning and expansion strategies, and cross-channel campaigns. An enriched view of customers helps pave the way for an improved customer experience regardless of how, when and on which channel they choose to interact with a brand, it makes them feel like they’re known.
Before establishing a single customer view, retailers should ensure the quality of their data inputs is high. It’s a critical step, but one where retailers often struggle. It’s not that retailers lack the data, it’s the exercise of connecting and cleansing that data, and then knowing what models to build with that information that is needed in many cases.
This Forbes Insights paper examines how retailers are increasingly turning to customer data and analytics to guide customer marketing initiatives. Read more.