Why Is a Single Customer View So Critical in Retail?
Consumers increasingly demand seamless personalized experiences across any channel of interaction. This entails understanding every customer on traditional channels like websites, physical stores and call centers, as well as on newer channels such as social media, connected devices, and digital marketplaces.
To get there, though, requires a “heavy lift.” It means that retailers need to change from integrating and optimizing channels, to having a strategy anchored by customer experiences. This requires retailers to collect vast amounts of data across various platforms, integrate it in real time to create a single customer view, and use insights from that unified customer data foundation to create consistent and personalized experiences.
In addition, with the elimination of third-party cookies in the near future, retailers will have to expand their efforts on first-party data. Several retailers—and many direct-to-consumer (DTC) companies—have already invested heavily in areas such as gamification, partnerships, loyalty programs, communities and user-generated content platforms. Typically, these efforts increase the complexity of data capture and integration, and require a more flexible approach to identity resolution.
So what should you do to meet these challenges? One solution that’s becoming increasingly popular across industries, is the Customer Data Platform (CDP). It’s a data management technology that analyzes customer data coming from many different data sources. The best CDPs easily ingest huge amounts of data, pull together a 360-view of the customer, and help you automate tailored experiences to appeal to each one.
Other CDP features that are critical for retail include prepackaged machine-learning models such as channel preference, receptivity by time of day, expected lifetime value, and product and category preference. In addition, retailers need the ability to create their own models within the CDP in order to deliver truly differentiated experiences.
For example, Japanese retailer PARCO has used its CDP to “gamify” walks through its malls and more than 3,000 stores. “Data-based customer segmentation and personalization of app notification are generating great effects,” says Naotaka Hayashi, Executive Officer for the Group ICT Strategy Office of PARCO. Shiseido has also used a CDP to leverage its extensive loyalty data to anticipate changing cosmetic needs over the course of each customer’s lifetime.
A CDP that provides a single customer view and enhances it with machine learning models and propensity-to-purchase scores can empower retailers to deliver relevant, personalized experiences in real time. Retailers that achieve this level of interaction with their customers—and who can measure, analyze, and optimize customer journeys—will be the winners of this digital transformation we are all experiencing.