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Ending Retail’s Race to the Bottom

by Patrick Reilly | September 8, 2014 | No Comments

Retail stores need to sync up brick and mortar sales with customer data.There’s no debate about the power of online shopping. During the 2013 holiday season, comScore reported that there was a 10 percent gain in eCommerce spending from desktop devices, reaching a total of $46.5 billion. Meanwhile, foot traffic to retail stores continued to fall dramatically. During the 2013 holidays, stores only saw about half the number of shoppers compared to 2010.

A lot of stores – from Best Buy to antique shops – are all facing the same conundrum. Consumers are increasingly concerned about price rather than brand. Online shopping allows customers to hop from one deal to the next and never pay full price again. Consequently, every store is competing to offer the best discount, rather than the best customer experience. As fewer people step foot into retail locations, it becomes harder for brands to deliver the kind of memorable interactions that will build customer loyalty.

Meanwhile, electronic communications from most major retailers continue to be impersonal. Even if you’re an 85-year-old male, for example, you could get an email from a clothing retailer about great deals on women’s footwear. Mass mailings – whether paper or digital – are contributing to retail’s race to the bottom by eroding any sense of personalization from the transaction.

The solution? Retailers should integrate the best parts of the brick-and-mortar experience with the data-driven efficiency of online shopping. In that way, businesses can personalize communications and build a new kind of cross-channel customer experience.

A Personalized Purchase

In our last post about the trends in retail, we discussed how retailers can leverage location intelligence to build a better customer experience. Now, the trick is to build a loyalty program out of all that new data. With the right analytics program, it’s possible for retailers to not only discover a customer’s previous purchasing history, but his or her sentiment toward the brand, demographics and predicted behavior.

By combining the retailer’s customer data with data from social networks, it’s possible to create personalized messages that are distributed to the customer’s channel of choice. If the data reveals that a customer is a mother but doesn’t engage with email promotions, for example, a customized direct mailing could be sent with offers for back-to-school supplies.

The real challenge is integrating this data with points-of-purchase systems. Retail stores should strive for the moment when store reps can assist customers by looking through previous purchases or preferences, so they can make an educated guess about what the customer needs. This kind of service would be opt-in and provide bonuses to those who subscribed to it.

Just like we need to end the silos that interrupt customer experience, by breaking down the barriers between the calls or email exchanges we have with customer support representatives, we need to end the silos between digital marketing and the retail experience.

Big Data, Granular Engagements

Thanks to the Internet, no retailer will ever be able to always offer customers the lowest price on products. There will always be an alternative. Instead, retailers need to focus on building an unforgettable, data-driven experience that always gives customers what they want, by creating customized messages, offers and experiences based on each new engagement. By building up unique, dynamic customer profiles, it’s easier to guarantee that every transaction won’t just be a race to the bottom.

To learn more about Pitney Bowes Spectrum Spatial, read our product fact sheet or contact us to set up a demo.

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