Real-Time Retail: imperative for the threatened brick-and-mortar world
The ability to collect, synthesize and act on data has made Real-Time Retail a possibility, but it is the competitive threat from eCommerce players that makes it an imperative for brick-and-mortar retailers.
Your brand is under consideration from customers at any number of highly specific moments throughout their week. The challenge for you as a retailer is to identify, understand and react to these moments in order to drive customers from consideration to purchase, and from a single purchase to loyalty. To achieve this, your marketing team must be able to deliver the most relevant and targeted message possible to customers at these key points. We at Harris Partners refer to this as 3R.
For most retailers, historically, the approach to access this consideration stage has been saturation – trying to hit as many potential customers as possible with a broad message, so that, at the very least, customers are aware of the brand and its offers when they make their decisions. This approach, while sometimes effective, is difficult to measure, next to impossible to optimize and woefully ill-prepared for the opportunities presented by two-way modes of customer engagement in digital marketing, particularly in the mobile channel.
How e-commerce changed the retail game
E-commerce “born digital” players have, over the past 15+ years, changed what the standard for good customer experience looks like in retail. They shifted focus from broad, brand-focused materials to targeted, product-focused and loyalty-based communications. We need only to look at the sophistication of Amazon’s recommendations to see the way brand interactions have changed. We are no longer subjected to the “spray and pray” approach across digital channels. We receive advertising across the Google display network based on the products we searched for, we are retargeted across social media based on the online shopping carts we abandon, and we receive email communications when a new product is released that is similar to the ones we have purchased before. This is the age of data-driven retail marketing, deployed by an array of brands that are able to track our every interaction with them, and communicate with us with a level of personal relevance and intimacy we haven’t seen before.
Brick-and-mortar retailers' opportunity: Real-Time Retail
But what does this mean for brick-and-mortar brands? It is of course far more difficult to track every customer touchpoint when so many of them occur in an offline world. Are brick-and-mortar brands restricted to the “one size fits all” approach and its lower marketing effectiveness than their digital peers?
The answer to this is a resounding “no”. Connected and real-time retail is not only possible for brick-and-mortar retailers, but also is an opportunity for a sustained competitive advantage over e-commerce players. This edge comes through the connection of the online and offline worlds so the retailer can deliver a seamless experience between digital channels and the store. Data-driven and digitally personalised in-store engagement can become a source of competitive advantage that e-commerce players are simply not capable of replicating using digital channels only.
However, delivery of this experience requires a significant shift in the way retailers think about their marketing: a move away from siloed, gut-based, calendar-driven approaches to data-driven marketing is difficult, but it is essential for the delivery of a seamless customer experience. We call the end point of this shift Real-Time Retail.
Real-Time Retail playbook
1. Start with data: track live metrics and build a 360º customer view
The first step on this transformation is to develop a comprehensive, dynamic data infrastructure that links all communications channels and sales metrics. Too many retailers isolate their communications function in a silo away from day-to-day sales results, making campaign tracking, testing and optimisation on financial metrics almost impossible. Reconcile point of sale data with live communications metrics, and you get yourself a real live heartbeat for your business.
You must match this live view of performance to a comprehensive view of the customer, with all touch points integrated into a single 360º customer view. The difficulty here is normally combining the offline and online behaviour. Businesses with a way to link customers to transactions through loyalty programs or a beacon / mobile app combo have a significant advantage in combining the behaviours. Businesses without such a link can create a proxy view through facial recognition video analytics solutions, providing a demographic-based view of transactions.
2. Use the data to find and prioritise opportunities
From here the task is to take the relevant data sources that deliver a picture of the business, customers and wider trends and use them to create marketing opportunities: new offers, promotions or products.
A robust data infrastructure means that a brand is able to respond quickly to opportunities not only across sales-based and brand-based based trends, but also to opportunities customers present as they move through different stages of their decision journey.
3. Connect your stores
Gaining a competitive advantage through an integrated customer experience requires real-time communications to extend beyond traditional digital channels and into the store environment. Through the use of digital displays, connected POS, beacons and mobile shopping experiences businesses are able to bring the same flexibility and targeted experience customers get from an online experience into the physical store.
Merchants can quickly test investments in this infrastructure against improved returns to ensure the CFOs are 100% happy with the ROI of the business case.
4. “Content is king” – stay in control of yours and grow it
To be able to connect with the customers in an intimate manner, brands must have both control and flexibility in all aspects of their content distribution. This begins with a flexible approach to offers, creative and media allocation. Brands often fail to fully grasp the opportunity presented by direct customer engagement because they are reliant on a small creative library, a small number of generic promotions and an inflexible allocation of media spend.
Digital media cannot be bought the same way as outdoor signage – apply the old strategy to the new medium can hobble its effectiveness. Brands must have a large library of content, available offers and messages to tailor to each opportunity that appears. For a fashion brand, a spike in social mentions of a particular product after a celebrity is seen wearing it requires a completely different response from the response to a spike in sales of a jacket on a particularly cold day. Marketing organisations must be flexible enough to understand the distinct opportunities both situations bring, and tailor content appropriately in response.
The flexible approach extends to the way brands buy media. Some brands and media agencies allocate media spend across social and display months in advance – even before the content has been published! This is at best tragicomical in the world where opportunity to test and optimise based on campaign performance has never been simpler.
5. Automate with technology to improve efficiency
Along with this flexibility to be reactive it is crucial to also set up a rules- and triggers-based automation of communication whenever possible. A robust API-driven data infrastructure allows merchants to monitor customers throughout the decision journey and across channels. The system then triggers communication in a channel-agnostic manner to greatly increase message velocity and reduce the resources required to maintain customer engagement.
6. Move fast, get rid of partners that slow you down
To manage this new way of working, brands need to set up internal structures to match the new needs. Real-time marketing infrastructure relies on cross-functional internal teams with creative, analytical and strategic capabilities. The days of marketing teams acting as project managers for a series of creative, social and media agencies are over: the lag times, lack of analytical capacity and failure to act cross-functionally across their own business mean that a brand simply cannot rely on agencies. There is still a role for agencies in setting broader creative direction, but businesses must consolidate their grip on execution to allow for an increase in velocity and volume of sales.
7. Fail fast, but test EVERYTHING
The last, but definitely not least, factor dictating the success of real-time retail is the development of a culture of fail fast and rapid test-and-learn. Your dogma must become: test all aspects of customer experience for effectiveness and accept failure in order to deliver the best possible message, offer and creative in all situations. None of your efforts will be perfect the first time, but – in an approach similar to agile software development – real-time marketing teams must use direct customer engagement and data collected from the results to continue to iterate and optimise the customer experience.