Retailers: This Holiday Season Focus on Actions Not Offers

Thanksgiving week is already here, and if you are like most Americans that means two things: food, and the beginning of holiday shopping. According to a National Retail Federation survey, more than 174 million Americans shopped in stores or online from Thanksgiving Day through Cyber Monday in 2017, with the average person spending $355.47.

While that’s great news for retailers – who expect more of the same this year with rising consumer confidence and low unemployment – it’s even better news for brands and retailers that can manage an omnichannel experience. The survey also revealed that of those 174 million shoppers, 64 million were multichannel shoppers who spent more money than those who shopped exclusively online or in-store, by $82 and $49, respectively.

It stands to reason, then, that brands with a keen understanding of a customer’s engagement patterns who can use that knowledge to orchestrate the customer journey will be in a better position to attract those consumers who are willing to spend more. Optimizing a customer’s journey entails shaping engagements with personalized, timely, and relevant offers at every point along the path to purchase.

If you as a brand know that last Black Friday I was one of the 35 percent of in-store purchasers who compared prices on Amazon before buying, you know that I waited until Cyber Monday to buy big-ticket items, and you also know I recently conducted an online search for surround sound systems, you could determine with a fair amount of certainty the next-best action that will entice me to make a purchase or, better yet, one that will enhance my customer lifetime value. Perhaps you offer a 5 percent in-store discount on sound bars when purchased with subwoofers, or maybe 10 percent off a bundle when I spend more than $300 online. Or perhaps the next-best-action is to make no offer at all and focus on customer service.

A New Approach to Offer Management

Traditional offer management strategies have been about trying to determine what content, promotion, or discount to provide to each consumer based on manual segmentation rules that the business and marketing have provided. These strategies, while impactful in the short term, often have a diminishing impact on consumers as brands have failed to optimize marketing programs and spend based on consumer feedback, buying patterns, and interests. These strategies do not scale and are very difficult for marketers to keep track of. Traditional offer management is largely about selling and less about the exchange of value between brands and consumers. The result is often customer churn.

There is a shift underway that has captured the mindshare of retail marketers that focuses on a broader next-best-action strategy. A next-best-action strategy takes into account a holistic approach of acquisition, service, retention, upsell/cross-sell, loyalty, and retention. This shift is made possible with data and analytics. By leveraging artificial intelligence (AI) and machine learning, organizations can create a single customer view, constantly evaluate all customers, and determine the optimal sequence of events to engage with customers and maximize lifetime value based on business goals.

An analysis of my customer profile, which can predict what I am most likely to do next based on behaviors, purchases, and interactions across all touchpoints and channels, could determine that instead of a coupon, I receive a thank you note from my trusted electronics brand with helpful tips in how to optimize stereo sounds for my particular setups or local repair shops for service. Engagement strategies that span beyond offers have a far greater chance of retaining me as an engaged customer than the static 20 percent coupon that comes addressed to “current resident.”

If a brand shows that it recognizes its customers, their preferences, and how they shop, the customer will reward that treatment with additional purchases and loyalty. To forge a relationship with a customer built on trust, a brand must proactively manage the entire customer experience on the path to purchase. In this orchestration, an offer becomes secondary to the overarching goal of optimizing the customer journey. An offer can support the journey, but only as an element of an end-to-end campaign of personalized experience management. The new paradigm of next-best-action is beyond the capabilities of traditional offer management, which is limited by a lack of data that make it impossible to segment content or promotions at an individual level.

Experience Management in Action

Clienteling is a good rubber-meets-the-road illustration of analytics at work in next-level, in-store customer experiences. A retail sales associate who assists a customer using a tablet with access to that customer’s profile is measuring the pulse of that customer in real time and can respond with the right context and cadence of recommendations and next-best actions.

Re-establishing a human connection between the buyer and the seller accomplishes a few objectives:

  • First, it optimizes the customer experience during that specific touchpoint. And if a customer for some reason doesn’t like to have shopping advice, a brand with a single customer view will know that and will ensure sales associates are focused on those that need their assistance.
  • Second, it provides more data points that can be leveraged by the brand to create personalized experiences across other channels. A next-best action could be a handwritten thank you note from a sales associate that includes a code to an invitation-only wine tasting.
  • Third, it reinforces the bond of loyalty and enhances customer lifetime value. A customer is not only provided a personalized experience, but they are left with an impression that the brand is working to provide them with something of value, a mutually beneficial exchange. The customer will be more willing to share information if they know it is being used for their benefit.

This holiday season, the best gift you as a brand or retailer can bestow on your customers is to show them that you care. Show them that you recognize them as individuals, each with a uniquely woven path for how they prefer to engage with you. This might take the form of customer service, retention, or traditional offers. Impersonal content that doesn’t reflect accurately upon a customer’s tastes and preferences is the fruitcake of retail offer management; bland, ridiculed, recycled, and thoughtless.


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