NRF 2020: From Goop to Godiva, the Next Retail Battleground Is Differentiated Customer Experiences
This year’s National Retail Federation conference, NRF 2020, was amazing, with one huge takeaway you couldn’t possibly miss. The focus of 2020 will be to deliver differentiated customer experiences (CX) that are often highly personalized and tailored to each individual customer. This will often be delivered with a foundation of unified customer data, both online and off—usually with the help of a customer data platform (CDP) or similar martech. Everyone from Goop’s founder Gwyneth Paltrow to Godiva Japan’s Junko Miyano were on hand to explain how they’re going to deliver these meaningful customer experiences.
The big retail clashes of 2020 will focus on a handful of critical questions. Who can present customers with unique, delightful experiences that strike each individual as “just right” so efficiently and seamlessly that the retailer or brand can still make a profit? Who can collect more data—and use it better—to provide the kind of retail customer experiences that sell and lead to long-term, profitable customer loyalty? And which martech can make all this happen—at scale?
‘Contextual Commerce,’ Personalized CX, and Uniting Online and Offline Customer Data Rule
Gwyneth Paltrow told the crowd that contextualized commerce is a key part of her brainchild, the highly successful lifestyle brand and retail company, Goop. In the early days of Goop, she focused on education—often on lifestyle topics that were out of the mainstream, but that struck a chord with a particular (and underserved) audience of women. She used her own unique mix of blogs and other content to provide the kind of unique customer experience that has garnered her a subscriber base of more than 8 million, a growing online business, and pop-ups spreading around the country in a variety of posh retail spaces.
Gwyneth Paltrow, founder of Goop, explained how important it is to create a dialogue on topics that resonate with your tribe. Her famously successful lifestyle company began in 2008 with an email newsletter to just over 10,000 subscribers, and now is valued at more than $250 million.
Godiva Japan’s Junko Miyano also explained how the upscale chocolatier will use its data to address its many channels in a differentiated way. Top on her list is unifying digital and physical customer data for a full view of each customer’s interactions. Plus, Miyano says that the ultimate goal is to make customer data available throughout Godiva, for store execution, merchandising, supply chain, and other functional teams—without compromising data security and privacy.
Godiva Japan discussed its omni-channel approach and its plans to use customer data.
Speakers emphasized that retailers should focus on delivering delight during the entire customer experience. For example, Rag & Bone is using in-store reps to provide product information, recommendations, and visuals for online shoppers. Plus, sales credit is given to stores that drive purchases online, which generates more usable online data. Other retailers described using customer data to provide a better customer experience through clienteling, based on a history of previous purchases and interests.
The goal? To sell differently—sometimes radically so—to each individual in their customer base, retailers are turning to strategies such as “hyper-personalization,” or extreme personalization, and helping customers to express what they want in the product design process. All of these require detailed customer data from many different sources, integrated with up-to-the-minute changes in buying and shopping behavior.
Personalized CX and Contextual Commerce Fuel CDP Interest
Creating these differentiated omnichannel experiences—and meeting each individual consumer’s expectations at scale has stirred increased interest in customer data platforms. A new eTail survey report—co-sponsored by Treasure Data and authored by WBR Insights—reveals a retail industry that’s betting big on customer data platforms (CDPs), analytics, AI and machine learning (ML) to improve their businesses, particularly automating personalized customer experiences (CX).
CDPs take data from many sources and unify this data to build a profile of each individual customer. Then CDPs use AI and machine learning (ML) to build predictive segments and to support personalized engagement with customers at scale. As each customer shops, browses the web, posts on social media, or even just moves around according to mobile phone or other geolocation data, the best CDPs are able to update those profiles in real time, while shoppers are researching or on their way to make their purchases.
According to the eTail survey, retail interest in CDPs is nearly universal, with 31 percent of survey respondents reporting they’ve already invested in a CDP, and 46 percent reporting they plan to, for an overwhelming 77 percent combined investing in CDPs.
The focus on CDPs has therefore recently intensified. “A customer data platform is the most important link between digital tools and the customers themselves,” the head of a large department store was quoted as saying in the report.
The report, “Retail CX and Data Management Strategies in 2020,” is based on a roughly even mix of department heads and senior executives at VP level or higher, all at retail companies with more than $1 billion in revenue. To make their numbers in 2020 and beyond, they’re making customer data a priority, and most want to use that data throughout their companies.
Customer Data Moving Throughout Retail, Transforming Operations
It’s an approach that’s changing both customer experiences and many of the back-end operations. “Customer data forms the base of transforming retail operations,” wrote one of the respondents, whose names aren’t given to preserve anonymity.
A different respondent surveyed in the eTail report wrote that “Effective use of customer data does help in increasing store profitability.” But perhaps the best survey explanation of the trend toward data-driven CX is a C-suite responder’s comment that “the goal is to connect customer data across our operational platform so that our people in operations can make quicker decisions.”
That’s a trend that’s increasingly becoming one of the major themes of 2020. In a new 2020 Frost and Sullivan report awarding Treasure Data the “Company of the Year Award, Customer Data Platforms,” Frost and Sullivan spells out the importance of CDPs to retail hopes in 2020.
“Customer Data platforms (CDPs) have emerged as a type of customer data management solution that helps all customer-facing teams—whether B2C or B2B—bring together, connect, and analyze in real-time all the data sources they need to generate an easily accessible unified view of all customer data to drive better customer experiences.
Many retailers are turning to a Customer Data Platform to stitch together information across all touchpoints.
Expect More Customer Data Collection in 2020—Especially from Mobile Devices and Sensors
The trend toward collecting and using ever more data for tailored user experiences is accelerating, as retailers try to supplement the online shopping, loyalty, and demographic data they already have with more mobile phone and sensor data from IoT devices.
“Our stores and examining devices will carry more sensors to help us provide the best possible product suggestions to our customers,” says a C-level executive at a specialty retailer, quoted in the previously mentioned eTail report.
From NRF, You Can See 2020 and Beyond
NRF retailers, expert researchers and observers seem to agree: Retail will see huge growth in the use of customer data and CDPs to create more delightful—and profitable—retail experiences. Retailers who move quickly and strategically, and those armed with a CDP, are well-equipped to win on the battlefield of better customer experience—in 2020 and beyond.