The last few months have brought to light the importance of truly understanding your customers’ behavior and journey. As a result, comes the demise of a concept around which many retailers used to build core strategies and even complete business models: channel-focused retail management.
Managing a retail business at the holistic channel level once was a very relevant—if hypothetical—way to bridge the online and physical storefront worlds. It came about as a way for retailers to view and understand buying behavior across any channel and any device with the ultimate goal of delivering a superior and consistent customer experience across all.
In the past, many retailers dedicated one team to manage its online business and another, completely separate team to managing its brick-and-mortar stores. The result?
No one focused on analyzing and understanding the complete, integrated shopping behavior of each customer.
Maybe this separation wasn’t such a big deal before. But evolving consumer behavior and unexpected market shifts push the concept of analyzing a business exclusively by channel quickly toward obsolescence: what initially were fairly clear boundaries between online purchases and those made in stores now are increasingly blurring.
Today, online customers and in-store customers are the same customer. These customers constantly evolve over time, becoming more and more sophisticated in the ways they shop. Due to COVID-19, for example, many shoppers who historically purchased in-store shifted seamlessly to buying online and picking up in-store (BOPIS) and/or picking up curbside (BOPAC).
As a result, the channel through which a customer purchases product is in reality a very small part of the overall customer profile. Now more than ever, retailers need to deliver the right product, to the right place, at the right time to keep customers coming back for more. That means understanding all of these things:
- What—Which product did they buy? How many units did they buy?
- Where—Which channel did they use to make the purchase? Where within that channel was the purchase made (i.e., specific store location)?
- When—In which month/on what day/at what time did they make the purchase? How often do they make a purchase?
- Why—Did their behavior change in some way with this purchase (e.g., did they shop more promotions this year, did they shop regular price merchandise this time, how did we target them to bring them back into store, why did they shop in the spring but not in the fall, etc.)?
Only by analyzing customer shopping baskets, shopping frequency, and shopping patterns in this detailed way will retailers gain the insights they need to adjust assortments, inventory levels, and pricing to meet ever-changing customer needs. That’s because a comprehensive understanding of each customer’s lifetime value—which is what this kind of detailed analysis provides—is what’s needed to give retailers a marked roadmap of where customers have been and, more importantly, where they’re going.
Retailers know all of this. It’s not lack of insight that prevents many from analyzing their data like this right now. What stops them is the largely inaccessible buyer and shopping information saved across different parts of the business. It’s this disparate and disintegrated information making it difficult, if not impossible, to complete the rich, integrated analyses that are needed.
That’s why unified data and analytics platforms (UDAPs) like Incorta are so powerful.
Incorta, for example, encourages a retailer’s curiosity, so they can derive the valuable customer insights they need from their data. It lets retailers unify data for analysis while giving users easy access to transaction-level data whenever they need it. In case you missed it, I’ve collaborated with Steve Ibach, VP of Industry Solutions at Incorta who goes into unification for retailers in greater detail in his recent blog post.
Most importantly, Incorta lets a retailer go far beyond answering the initial batch of questions I outlined above, to answering virtually any question they want to ask. Questions like:
- How are factors beyond our control—e.g., the pandemic, the economy, weather conditions, job losses, gas prices—impacting and affecting our customers’ shopping behavior?
- How can we understand the most appropriate, custom messaging to send to New York customers during a lockdown, for example, versus what would be most appropriate to send to?
- How can we more strategically plan assortment or inventory by adding key external data—like COVID-19 data from the CDC—to our analyses?
- How can we give our top customers (who drive a significant portion of our overall sales) a unique experience, unique offers, and unique messaging, and make them feel like an important and valued part of our organization despite any external factors influencing them or affecting us?
With Incorta, retailers are empowered to take a more thoughtful approach to how they market and what they offer to their customers. It’s a customer-focused approach—not a channel-focused one like omni-channel.
It’s informed, it’s powerful, and I believe it’s here to stay.
Learn more about what Incorta can do for retailers in the “Intelligent Retail, Faster Insights” eBook. By partnering with Microsoft, Incorta is able to deliver solutions that reimagine retail and enable intelligent supply chains for some of the world’s most recognized brands. The ebook is designed to help retailers better navigate the unfamiliar, troubled waters in which we all find ourselves.