Retailing has changed fundamentally over the past decade, with new channels, new entrants and some familiar names disappearing from the high street. With customer shopping behaviour continually evolving, what does the future hold for the one quarter of retailers still not tracking customer profitability across channels?
According to research from RSR, 27% of retailers cannot tell or don’t know whether or not omni-channel customers are more profitable than single channel. Disturbingly this figure shows no sign of reducing year on year – the percentage of retail respondents reporting they don’t track profitability by channel has remained consistently at about one-quarter for many years. Yet with more and more shoppers looking to engage with retailers across multiple touch points, an inability to track customer profitability across channel is severely compromising decision making and, critically, strategic investment planning.
In a fast changing retail environment, the options and opportunities for investment are virtually unlimited. How can a retailer prioritise a new web site over improved in-store information, or a revamp of the social media strategy over store associate training when there is no data to support the decision?
Traditional retail models are evolving. As are the tactics deployed to win online share. We must be asking, what is the value of investments designed only to increase market share, from new apps to social media campaigns? And how can retailers justify prioritising market share at the expense of understanding profitability by customer and by geography or of measuring the impact on customer profitability of specific campaigns or promotions?
Relying on good retailing experience alone really is taking a leap in the dark in the sophisticated, multi touch point retail environment of 2016.
Retailers need new thinking, new skills and new techniques to understand the ways in which customers now shop. This is, of course, a significant analytical challenge. Given the multiplicity of systems now used to support this complex retail model it is essential to consolidate diverse information sources, from sales to average discount and cost of fulfilment. However, relying on manual information collection and analysis is simply too time consuming – and the information too dated to be of value.
Organisations need to rapidly create a single source of trusted information that is continually updated. Armed with real time insight into costs, sales and fulfilment a retailer is able to dedicate time into specific analysis, ideally on a daily basis, that can support on-going strategic direction and planning.
Furthermore, this information should be routinely supporting the new approach to personal engagement that is increasingly expected by customers across every touchpoint. From pinging a customer via social media during the morning commute to a targeted email to the desktop during the lunch break, deep insight into the way customers behave across every touchpoint – and the profitability associated with each interaction – should be driving every aspect of customer engagement.
It is clear that in an increasingly challenging market, data driven retailing is now prerequisite – yet over a quarter of retailers have failed to make any headway in improving business insight over the past few years. Without in depth insight into customer behaviour across every channel and the constantly changing cost base, how can organisations keep pace with the evolving retail model?
What do you think the future holds for retailers? Tweet us at @ManhAssocUK