Adopting an omnichannel strategy is increasingly the path forward for brick-and-mortar retailers who struggle to compete with native online merchants. This approach allows retailers with a sizeable physical footprint to integrate offline and online touchpoints into a powerful, contextually relevant customer experience that leverages the best of both worlds.
Consider that RetailDive’s recent consumer survey found that 62 percent of U.S. shoppers want to try a product before they purchase it, which is something they can only do in a brick-and-mortar store, and 49 percent prefer the immediacy of in-store purchases. Brick-and-mortar stores clearly will not vanish in the next few years, but they will inevitably have to change.
Adopting an omnichannel retailing approach needs to be part of that change. Consumers increasingly conduct research online before making their purchases, and retail brands need to leverage that data to create contextually relevant customer interactions – whether they occur in a physical store or through a digital touchpoint. To do this effectively, retailers need to ensure they collect the right data and deliver it at the speed necessary to engage with customers in the moment of need. (If you’re going to CRMC this week, I’ll be sharing RedPoint customer case studies during my sessions with Monro Muffler Brake and VeraCentra.)
Customers generate a veritable flood of behavior and preference data when interacting with retail brands across physical and digital touchpoints, a tide that will only grow in strength and prominence. In fact, McKinsey recently found that 50 percent of customer interactions now happen during a multi-event, multichannel journey. The problem is that much of this data flows into siloed engagement systems that don’t share information, which stymies the ability of business users to understand the full customer journey.
At issue is that most brands have customer engagement technology stacks full of disconnected point solutions, which hamstrings any effort to craft a truly omnichannel customer experience. Because customer data is disconnected, and engagement systems are fragmented, there is no way to tell if retailers have all the customer data necessary for a seamless omnichannel journey.
Breaking down these silos and connecting engagement technology at the data layer is the first step in the journey toward effective omnichannel retailing, and often leads to data taking a more central role in decision making. According to McKinsey, organizations that give data a central role in marketing decisions achieved a 10 percent sales lift from the resulting personalization. For legacy retailers that struggle to compete in a world with increasing e-commerce sales, this can make a substantial difference. The question now, however, is how brands can connect customer data across silos to make it useful for personalized engagement.
Retailers aren’t alone in their struggles with disconnected customer data. Acxiom and Digiday recently found that 70 percent of marketers, industry-wide, have suboptimal or no ability to integrate customer data between online and offline sources. Disconnected data harms an omnichannel retailing effort because retailers working with siloed information can’t understand a customer’s full interaction history and as a result often deliver impersonal or irrelevant offers.
Creating and constantly updating a unified customer profile is the best way to be certain that customer data is kept current at all times. This is the impetus behind the rise of (CDPs), a new type of operational data environment that ingests data from all sources – whether batch or streaming, internal or external, structured or unstructured, transactional or demographic, personal or general – to provide an always on, always updating golden record and make it continually available at low latency to all touchpoints and users across the enterprise.
The ability of a CDP to create and maintain the golden customer record is game-changing for retailers deploying an omnichannel strategy. With a CDP, business users can see a customer’s entire interaction history with the company in one place, understand their preferences, and determine the next-best offer. The ability to take these steps from within a single portal can be game-changing, especially for retailers struggling to understand and engage with the omnichannel consumer.
Engaging with the omnichannel customer is all about context. Understanding a customer’s context, which includes their history with the brand, helps retailers deliver relevant interactions in the moment of need. CDPs are a vital component of providing context to business users; the ability to connect data across functional and channel-specific silos empowers marketers with a full understanding of the customer’s behaviors, preferences, and interaction history, and can power much more focused and relevant marketing than is possible with disconnected point solutions.
The right data is a critical component of a successful omnichannel retailing strategy. Without the right data informing decisions, retailers risk sending irrelevant messages that only frustrate consumers. The right data and the right context, however, can fuel contextually relevant customer engagements that increase satisfaction, improve profitability, and enable legacy retailers to thrive in an increasingly competitive world.