Retail is in crisis. With increased choices and increased channels comes increased competition. Retailers looking to differentiate themselves and build short and long-term growth must align their marketing strategies to the omni-channel behaviors of their customers. But that’s no small task.
In our recent webinar, we discussed today’s omni-channel behaviors, the growing data imperative, the disparity between acquisition and retention and the top omni-channel plays to bridge the gap between you and your customers.
Here's a peek into what we covered:
1. Consumer's omni-channel preferences. Gap #1: Omni-Channel Interactions vs Transactions
|1.||Omni-channel interactions (where value is created): How consumers leverage multiple channel to shop. While a significant portion of this happens online and via mobile, physical stores have heavy influence on the purchase journey.|
|2.||Omni-channel transactions (where value is captured): This refers to where the sales is actually captured. In the U.S. nearly 94% of sales happen in-store.|
|3.||Omni-channel delivery (where value is delivered): While I didn't cover this specifically in the webinar, it's an important distinction and component in the omni-channel journey. Buy online and pick-up in store is growing in popularity among consumers but presents real logistical challenges for retailers. (that's another webinar completely)|
But, if you look at the omni-channel purchase journey, the lines between online and offline are becoming increasingly blurred. To understand the issues and the opportunities, it's important to understand why consumers choose one channel over another for their purchases.
2. The data divide. Gap #2: Single view of the customer.
Consumers are increasingly expecting personalized experiences. Deliver them and 78% are more like to be a repeat customer. And they'll spend more. Without it, customers will leave.
Identity Crisis: The average person has 3 email addresses and will move 12 times in their life. Add to that the number of devices they have and the number of systems and applications where activities and contact information is captured and stored and what you have is data nightmare.
In-store Transactions Are Getting Lost: The ability to track in-store transactions and actually associate them to an individual has considerable challenges.
- Mobile Apps: only 1/10 customers download retail apps.
- Credit-card match-back only captures only 80% of transactions as there are still cash customers.
- CRM/Loyalty programs are not seamless from in-store to web data and require customers to comply.
The Path to Enlightenment Starts with a Single Customer Profile (SCP):
- Without a single view of the customer, you may be missing your top customers. AgilOne has found that on average our customers are misclassifying 70% of the top 10% of customers. That means 7 out 10 of your most valuable customers are getting lost in the data.
AgilOne's Customer 360 helps brands get to know their customers.'
Understand customer contact preference, recent activity and recommended products.
3. Delivering relevant engagement for short-term and long-term growth. Gap #3: Acquisition vs Retention.
We all know the old adage of "it costs more to acquire a new customer, than retain an existing one." Brands have to adopt a relationship marketing approach to nurturing consumers from the first interaction. Based on today's consumer purchase journey, there are 2 areas of opportunity:
OPPORTUNITY #1. Converting browsers to buyers: You're losing 2/3 of your shoppers between cart creation and checkout.
Significant dropoff occurs between browse and buy.
Most retailers discount, discount, discount. And consumers are catching on.
Abandon cart discounts are running rampant
OPPORTUNITY #2. Stop dating your customers and get married: 70% of customers will churn after their first purchase. BUT, convert them to 2x buyers and your retention rate increases from 30% to 70%. Seems like a no-brainer. Not exactly.
70% of customers churn after the first purchase.
Most marketers are still stuck doing batch-and-blast. And consumers are reaching email saturation.
You lose 60% of future lifetime value (LTV) when a customer unsubscribes.
If you're an email marketer, you've probably measured revenue per email. But have you ever measured lost revenue per unsubscribe?
4. Omni-channel marketing plays.
Relationship marketing should be focused on 3 types of campaigns:
- Triggered campaigns focused on critical purchase events where the goal it to optimize conversion.
- Lifecycle campaigns (which can also be triggered) but tend to focus on building a lasting relationship with your customers based on their lifecycle status. The goal is to optimize lifetime value and build long-term loyalty.
- Promotional campaigns includes those ad-hoc campaigns such as seasonal events, new product launches, store events, etc. where the goal is always response focused around some time-based event.
Common plays are broken down by event-based, lifecycle-driven and promotional campaigns.
5. How to make it happen. The simple answer? AgilOne.
Brands have to start with the data. Without a single view of the customer, you won't be able to impact much. With it, the possibilities are endless. With rich customer profiles, organizations can take advantage of clustering and predictive technologies that allow you to create hyper-targeted marketing. But you'll need a multi-channel campaign management solution, not just any marketing cloud. But don't our word for it. VB Insights recently conducted an in-depth study on marketing clouds. Watch the webinar with John Koetsier, VP Research at VentureBeat and speakers from Ticketfly, Blue Jeans Network and Dot & Bo for a condensed overview.
The key building blocks to customer loyalty starts with the data.