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Omnichannel Retail: How to use customer data to optimise business performance

Seize Digital
Author: Miya Knights

In this seventh Eagle Eye blog serialising our CEO, Tim Mason’s new book, Omnichannel Retail: How to Build Winning Stores in a Digital World, we explore the first area retailers need to apply customer data insight.

That is, to run their businesses better. The book makes the case for the digital imperative to connect with customers in order to better understand them. Tesco Clubcard was able to do this in an analogue way.

Even though Clubcard was launched nearly 25 years ago – a few months before eBay and a year after Amazon – the principles of loyalty still apply. But the mechanics available to foster customer loyalty have evolved.

They have developed to capitalise on the opportunity to digitally connect online and offline with customers. We’ve seen how the likes of Amazon and Asos use that connection to market directly to customers online.

But the book highlights the advantages of digital customer connection instore. This is where the store’s relevance and role in sales channel-agnostic shopping journeys lies. But it must be located in a digital world.

The store itself needs a ‘mobile makeover’ to digitally augment the customer experience and capture better data about them when they visit. Then use the customer data insight to unlock new ways to run the business.

This is what Tim refers to in Chapter 7 as ‘data-based retailing’. Connecting digitally, via mobile, instore and tying that engagement back to sales provides retailers with new customer-based measures of performance.

     “…The arrival of digital delivery…opens up the same data-based retailing capabilities that come with the likes of a Clubcard customer connection, without necessarily having to operate a full-blown loyalty scheme. Establishing that customer connection digitally, in the store and at the point of sale or redemption, also immeasurably enhances that view of their preferences, behaviours and habits in real time.” (Mason, T., Knights, M. Omnichannel Retail, p125, Kogan Page.)

Managing what you measure

The aim is to link customer types and identifiers, such as Wi-Fi logins, mobile scans, orders or payments, or loyalty or promotion redemptions, back to the point of sale to get sufficient data on who buys what.

Category and marketing managers can use this data to analyse and improve range, merchandising, store layout, etc. by applying the D.I.A.L. methodology: Data generating Insight driving Action that fosters Loyalty.

The distinction between data-based retailing and performance marketing is that one is focused on improving operational aspects of the business. The other is designed to grow the business by driving sales and frequency.

But both rely on the same prerequisite digital connection to bridge online to offline by enabling the business to  manage what it measures. Thinking of it another way, it’s knowing who your best customers are instore.

     “Wouldn’t it be great if you knew who your best customers are? Who spends more than £50 per visit? Who visits three or more times a week? Who is visiting and spending more or less? Who has kids? Who buys clothing? … Your value seekers? Offer junkies? Fine-food lovers?” (Mason, T., Knights, M. Omnichannel Retail, p123, Kogan Page.)

Digitally augmenting the store to answer these kinds of questions means engaging customers beyond a loyalty card swipe as they leave. It may also require different approaches to price, offer, reward or service for each.

Consider that the 13-week digital promotional communication costs for the PC Optimum loyalty app Eagle Eye provides for Canadian grocer Loblaw are significantly cheaper than Tesco’s analogue one-off quarterly one.

How to digitise customer centricity

The objective of digitising customer connection and engagement through to the point of sale, whether online or instore, is to run a customer-centred and informed business. This requires data-driven insight and action.

A great data-based retailing example of DIAL at work that Tim shares in Chapter 7 is an analogue learning from Clubcard about Asti Spumante. Now, we all know Prosecco is a popular tipple. But who drinks Asti Spumante?

Using basket-level data linked to anonymised customer identities, you can see there are a group of customers that always buy Asti Spumante. This may be regardless of what other options are on promotion. But why?

Running a business with real customer identities enables you to actually know that those people tend to be aged over 60. Their loyalty suddenly makes sense because they’re buying the brand they’ve always bought.

Customer data insights can help your business performance

This data-based view can help with ranging and choice of promotions. But it also represents an extremely important opportunity to unlock the benefits of performance marketing, which we explore in Chapter 8.

Make sure you don’t miss the rest of this series. Subscribe here to receive the latest blog, previewing a chapter of Tim’s book each week, and be entered into a prize draw to win one of 12 signed copies!

To find out more, check out Omnichannel Retail: How to Build Winning Stores in a Digital World by Tim Mason and Miya Knights, published by Kogan Page, and priced £19.99.