The adage “Know your customer” has been around for as long as the retail industry. My father was an independent retailer, and he successfully put two children through college through the revenue generated from his single store. His techniques were primitive, but his knowledge unquestioned: he knew his customers and knew what they wanted.
This knowledge, built from talking and paying attention to shoppers, allowed him to shift focus as his neighborhood demographics changed. From a seller of children’s wear, to an “official camp outfitter,” to a purveyor of Communion dresses, he kept in touch with the ever-changing needs of his audience for more than 50 years.
Over the past half century, we’ve seen the rise of “enterprise retailing.” Today’s enterprises sell across many channels, purvey broad assortments and have automated a vast number of functions that enable them to scale. But we have to ask ourselves: With all these advances, do we know our customers? And even if we know them in our stores, can we recognize them when they come to our online venues?
For most retailers, the answer is a resounding “No.” We have taken many steps forward into scale, but the collateral damage to that growth is intimacy. And without intimacy, the customer experience suffers tremendously.
Nothing is more frustrating to a consumer than being provided a completely wrong offer at the wrong time. For example:
Consideration #1: A friend experiences real frustration when she (a devout Coca Cola drinker) receives promotions for Pepsi from her go-to grocery retailer.
Consideration #2: Some time ago I was in the market for new patio cushions. I found the ones I wanted and bought them online. For the next two years (no exaggeration!), I continued to receive offers for patio cushions from other retailers, but what’s worse, I received similar offers from the retailer I’d actually bought them from.
A key to a successful 2017 holiday season is using technology to get back to retailing fundamentals: knowing your customers so you can provide a satisfactory shopping experience. Consider that 68% of consumers are unlikely to return to a website that does not provide a satisfactory experience.
How can we combine the knowledge of the independent retailer with 21st century scalability? A new report written by my firm, RSR, in conjunction with Signal has identified two crucial steps to take.
- Individualize experiences. This should be a priority in both digital and physical environments. It goes beyond segmentation, which at root is a function of scale, not intimacy. It means creating true 1:1 experiences. Amazon and other disruptive brands have shown shoppers that it’s possible for large retailers to be relevant and intimate, fostering brand loyalty. Now, it has again become a core shopper expectation.
- Recognize your customers. Retailers can only individualize experiences for customers they recognize. Today, we have the potential to create and maintain rich cross-channel customer profiles that allow us to take a page from the independent retailer’s book. Customers should be identified and treated as individuals; data from all touchpoints — desktop, store and mobile — can be connected continuously and in real time to resolve identity. The goal is to capture customer intent and provide appropriate context for their visit.
These steps are possible, and in fact are necessary for sustained retailing success in Holiday 2017 and beyond. It’s time to combine scalability and intimacy for the next generation of retailing success.
Originally published July 06, 2017