Data has variously been described as the new oil and the new gold, but as internet behemoths like Amazon and Facebook have shown, it is far more valuable than mere hydrocarbons or metal.
The more data a retailer has on their customers the more they can sell to them, but only if they can gather it and use it properly.
"In a traditional retail environment, we're meeting our customers face to face, talking to them, identifying their needs in real time," notes Three Ireland head of data Graham Murphy.
“In a virtual environment, we don’t have that luxury. As life becomes busier, consumers don’t have it either. We are lucky to live in a digital age where retail is at our fingertips, but busy consumers want an uncomplicated online experience, they also want the same experience as in-store, so we need to use the information we have to make this happen.”
Customers also expect personalisation, he points out.
“They expect a seamless experience regardless of the channel and that is what Three has worked hard to provide for our customers. Customers can even start their experience online and finish it in one of our stores. We have moved from a traditional mobile company to a lifestyle brand and understanding customer needs and experience is critical to that. The in-store experience is as important as the online experience.”
The data used to inform that personalised customer experience comes from numerous sources.
“It can come from market dynamics, forecasts, consumer sentiment, and even be provided and generated by the customer themselves,” Murphy explains.
“All this data can be explored, if we have consent where applicable, to build that individual customer experience to identify their needs and tailor their experience with us.”
Online retailers have had an advantage in the data gathering stakes up until now, says AIB Merchant Services senior product manager Orla Bowers.
"Online retailers have access to insights through Google and Adobe analytics and so on. That's virtually impossible to achieve instore. Traditional retailers don't ask their customers what age they are, for example. Our new Main Street Insights product gives retailers insights into cardholders such as where they live, their age profile, spending profile and so on."
The fully anonymised data gives the retailer data on cardholders who have shopped with them. Not only can they get information on their age profile, the spend in relation to their age, and the area they live in, but they can also see what they’re spending in similar shops in the area.
“The retailer also knows how often their customers visit their store,” says AIB Merchant Services channel manager Robbie Doherty.
“Small businesses want returning customers, and they can use the data to see how much customers spend and how often. A loyalty stamp card has no such information. Now they can see when they came in, how often they visit, how often they visit similar businesses.
“It can also show where customers come from. If most customers come from within a one kilometre radius and none or very few come from a few streets in that area you can target leaflet drops at those streets. You can also use the information to help decide where to open your next store.”
It’s as important to know what customers aren’t doing.
“If 1,000 people walked into your shop and only two of them bought you’d be worried,” says Conor McManus, director technology consulting with BDO Eaton Square.
“You have to look at the online store in the same way. Being able to operate seamlessly across myriad online and offline channels makes business sense. It relies heavily on data unification, giving retailers a single view of the customer from email to website to store, for example. This is challenging when a retailer often holds multiple records for one person due to the numerous touchpoints used by the average customer when interacting with a company.”
Bringing that data together is crucial.
“The ability to unify this into a single truth gives the company a view of each person’s journey, arming the retailer with insights to drive the behaviour of customers and enhance their experience across the brand,” McManus adds.
This means the retailer has to know exactly what data they have, where it is stored, how it comes together, and where it does not.
“The companies that are successful in omnichannel are those that start with a basic review of what they want their data to do, how they’re collecting it, and how they’re using it. You need to build a clear view of your customer data and a clear view of the customer journey and ensure that the most important journeys are as frictionless and easy for customers as possible.”
Care must be taken when using the valuable resource, according to KPMG partner Niall Savage.
“In many ways data is power,” he says. “The better the data the better the experience for the consumer. But acquiring, keeping and using data is highly regulated and rightly so. And it’s very difficult to get it right. GDPR has changed the game. The bigger retailers know how to do it well, but smaller retailers can face difficulties.”
His advice to retailers is to know what data they have and understand the reasons for having it and using it.
“That should be the first port of call. Understanding why and how it’s used and ensuring it’s used appropriately. GDPR is all about that. Retailers have got to make sure they get it right. It’s on the agenda at board level for most large organisations. Data leaks can cause real reputational damage.”
McManus gives a practical example of how a retailer has used customer data to good effect during the pandemic.
“A pharmacy group with a prescription collection service found that a lot of their elderly customers were sending family members to pick them up. That meant more younger people coming in. They moved the make-up display to a position in front of the till and sales rose dramatically as a result of more young women coming in to the stores.”