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Joining the dots

Retailers have a wealth of customer data, but using it to offer a truly personal service in-store remains a challenge.

Whether it’s a little black book detailing your top shoppers’ likes and dislikes or a sophisticated customer relationship management (CRM) package number-crunching individual interactions and transactions, understanding customer preferences and behaviour has always been a priority for retailers.

Today, online retailing and social media have added a wealth of data – from click trails showing which pages online shoppers view or items they search for before buying, to Facebook ‘likes’ and critical, or complementary, tweets. Analysts talk of “big data”, with companies such as SAS producing high-tech tools to analyse thousands of tweets in minutes.

Digital channels automatically use much of this customer information, identifying at log-in, and receive suggestions and recommendations based on previous purchases and known preferences. In-store it is rather different. Unless the customer is a regular, they can remain totally anonymous until presenting a card for payment. 

Identifying customers before they head for the exit so sales staff can access their purchasing records and make truly personalised recommendations is one of the drivers behind in-store iPads and similar tablet devices. Burberry, Aurora Fashions, East, Reiss and Thomas Pink are among the many retailers already employing such ‘assisted selling’ schemes. Some are using the tablets as a transactional device, others to reach the company website and show items which may not be in stock, and some to access the customer database and look at previous purchases in order to give a more personal service.

BT Expedite, which supplies CRM systems to both Burberry and Aurora, has implemented its ‘clienteling’ application – software that tracks individual customer shopping preferences – at footwear and accessories retailer Cole Haan in the US, and at two UK retailers, the identities of which it will not reveal. “The system gives sales associates the customer purchasing history and preferences to enable more personalised recommendations,” says Rob Little, head of managed CRM at BT Expedite. “It’s an approach that is really only suitable in upper segments where you have high-value purchases and comparatively low volumes.”

Gerald Maidment, account manager for BT Expedite and BT Fresca, says that while clientelling may be associated with the top end, it could also be appropriate for high-spending customers in the middle market who expect VIP treatment. He adds: “Lose a high spender and you may need to recruit 20 new customers to replace the value.”

Identifying which customers merit the VIP treatment takes skill as well as access to customer data and shopping history. “Data can help sales staff understand the customers and build on previous purchases,” says Martin Schofield, former retail operations director at Harvey Nichols and currently operations director at software provider Itim. “But how do you recognise the customer? At what point does the engagement become intrusive? The willingness of customers to log into an iPad or give an ID will depend on the store – is it a brand they trust? It also depends very much on having the right staff who can approach and engage with customers easily – that makes the greatest difference.”

John Bovill, commercial director at womenswear business Jacques Vert and former group IT director at Aurora, agrees. “We are a premium brand so tablets are very relevant to our market to assist in ‘wardrobe building’ through a more intimate, rather than transactional, customer interaction. However, any technology needs to be appropriate and fit for purpose; it needs to consider the brand and customer experience,” he says.

While iPads provide skilled store staff with an additional tool to help clinch a sale, Schofield argues that it is really the customer’s own device – the smartphone – that will ultimately deliver that much-needed personalisation in-store.

Companies like Aurora are already accepting PayPal via mobiles at point of sale, while Thomas Pink will go live with PayPal this autumn, helping it to identify customers. The smartphone also gives shoppers access to the shirt retailer’s website, their own account history, online ordering and so on. Registered shoppers can also receive promotional discount offers and, thanks to mobile telephony’s geolocation function, these messages can be delivered in real time while a customer is actually in the store.

“We want to make our communications with customers more timely and relevant,” says Ish Patel, group omnichannel director at Aurora Fashions. “And mobile adds locality – a sense of geography of where your customer is.”

He adds: “Providing the most appropriate engagement to the customer will encourage her to choose to be identified through in-store location services. These could include privileged promotions, access to wider range, access to product information or access to ratings and reviews.”

Patel cautions that trust will be key and retailers risk abusing that trust by misusing location services. “Consumer smartphones are becoming more and more powerful and give retailers the opportunity to leverage customer devices rather than introduce new in-store technology. Your smartphone is very personal and always carried with you. This presents a wealth of opportunity but it should also be remembered that the more personal the device, the more protective of it people may be,” he says. Bovill agrees: “Smartphones are going to be very relevant. However, any use must ensure it supplements the brand experience. The customer has the option to opt in or out of the interaction, and data/privacy should never be compromised.”

Offering free Wi-Fi services in-store that customers have to log into is seen by some as a tool for identifying and tracking customers via their mobiles, and is currently being considered by the likes of Aurora. However, Paul Alexander, chief executive of data analytics firm Business Analysis, argues that “most shoppers have plenty of spare data capacity in their contracts so why do they need a retailer’s wi-fi?”

Whether it is near field communications (short-range wireless interaction), wi-fi or help from telecommunication providers, identifying shoppers in-store is perfectly feasible. The challenge for most retailers is what you do with that information without being intrusive.

“There is a certain nervousness that such an approach is just a step too far,” says Tony Bryant, head of business development at K3. “For high-volume fast fashion it’s probably better to deliver follow-up offers. A retailer may know from a PayPal payment that the shopper bought an item in-store that morning, so they could send a mobile coupon later in the day with a message saying ‘Thank you for shopping with us and here is a £5 voucher to use in our store next week’.”

Richard Traish, senior partner at consultancy Kurt Salmon, also believes that extensive use of geolocation data can be “too far, too soon. Most retailers need to get more basic things right first,” he says. “Such as having staff that recognise and engage with customers. In many stores, staff can spend less than 10% of their working time actually talking with customers.”

Certainly many retailers are working towards joined-up systems with the aim of achieving a single view of the customer via a single customer database accessible in all channels. However, problems persist. “We can expect a major revolution in what happens in-store but not yet,” says Traish. “Most retailers are moving with small incremental steps.”

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