FOR RETAILERS
Smarter operations and sustainable growth, powered by Customer Data Science.
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Better understand and activate your Shoppers to grow sales.
Are you looking to increase your contactable Customer base? How much money are you losing on incorrectly identified Customer communications? Throughout our 30 years of big data experience working with clients across industries around the globe, we have found that maintaining contact through relevant Customer engagement is a crucial component of putting the Customer First.
Essential to preserving contact data is ensuring that you have the most up-to-date information from your Customers; not an easy task. On average, people in the United States will move an average of 12 times in their lifetime. United States Postal Service data indicates 14% of the population change addresses annually. As email contact has grown, it's important to note that, on average, 30% of people change their email addresses each year. This is driven by ISP or job changes, or just to stop being spammed. As people move away from home phones to primarily mobile devices, phone numbers are stabilizing as consumers maintain the same numbers through physical moves.
1. Internal:
<p>Maintaining Customer information manually through an internal data team can be time-consuming and costly. It may require Customers to update their information online or through a call center, with an internal data team to validate the changes, and your Customer engagement team to be made aware of the changes so they can update their downstream systems. If you are in contact with your Customers on a weekly basis, this process will need to be on-going and thorough to accurately capture the data changes.</p>2. Third party:
<p>Many third-party CRM systems and databases exist, often removing the manual steps from this process and may even automatically update Customer address information via online sources. In many cases this information is based on publicly available data or the USPS' address tools. However, these updates can verge on being "creepy" to many Customers. Automated systems do remove many of the manual touch points for your teams, but the information is then strictly provided by the third-party databases and processes. Additionally, downstream systems often still require updates from these tools to maintain the most correct Customer information across your data landscape.</p><p>While there are some hybrid models of options, here are the main pros and cons we have identified for the primary methods:</p>Retail leaders must objectively understand how their business currently considers Customers before trying to set a more Customer-centric direction and focus. There are some formal assessment methodologies, like dunnhumby's Retail Preference Index (RPI) and Customer Centricity Assessment (CCA), which offer detailed evaluations of a business' capabilities, strengths and weaknesses based on Customer perceptions (RPI) or global best practices (CCA).
The approach outlined below is not intended to replace these formal tools; rather, these observations are intended as a kind of 'toe in the water' to help retail leaders form early hypotheses and points of views. These are rules of thumb, heuristics culled from global experience. Later, leaders might use these observations to informally check progress from time to time as a way of assessing whether the "program in the stores matches the program in our heads".
1. Who really runs the store?
<p>Walking around a store (or better, walking around several), can give many clues toward understanding a retailer's attitude about its Customers, as well as revealing some of the challenges ahead for installing Customer First. As Customers ourselves, we are qualified to assess an organization's 'readiness' for Customer First, simply starting by walking around.</p><p>How a Customer experiences the store shapes their perception of the brand, and there are dozens (even hundreds) of 'moments of truth' for Customers in each shopping trip – opportunities for the retailer to win more loyalty, or indeed to lose it. And it only takes one 'bad' experience to erase all the good.</p><p>Leaders can form an opinion about the Customers' true shopping experience by observing 'Who really runs the store?' – a way to put on a Customer lens to assess if the Customer, the retailer, the supplier, or no one is driving shopping experience decisions, like range and presentation. For example:</p><ul><li>Choose three sections across the store (telling categories include yogurt, pasta sauces, milk, and packaged lunch meats). Look to see how the product is organized and presented (remember to try to see through the eyes of a Customer).</li><li>Is the section organized by brand (e.g. all Danone yogurt is merchandised together in a recognizable Danone brand block)?</li><li>By Customer benefit or usage (e.g. all brands of probiotic yogurt are merchandised together, as are all Greek style yogurts, all kid's yogurts, etc)?</li><li>Or, by some hybrid but logical planogram rather random plan, with little recognizable logic at all?</li><li>Would you conclude that the product display / layout logic is influenced more by supply chain, by brands, or by the Customer need states or trip missions?</li><li>How broad is the range (e.g., number of varieties or sizes)? How deep (e.g., number of brands of the same flavor or variety)? Does the breadth and depth feel Customer friendly, or confusing?</li></ul><p>Of course, analysing any available loyalty data will later tell us how Customers shop the category and that might well be by brand (or flavour or size, etc., and will certainly vary by section). But this first assessment helps us begin to form our perspective on how tuned-in the business is around its Customers, and about where within the business leaders might need to begin to install insights and the Customer language.</p>2. What messages are Customers receiving?
<img class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true" data-runner-src="https://customerfirst.dunnhumby.com/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNTE0ODQ5OS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0MjUyNDUxM30.7G_Sn_ukMUg7hOE2aq2SjlqJ89dTwJpSQHP3_K99dZg/image.jpg?width=980" id="3ca51" width="980" height="567" data-rm-shortcode-id="33a96859c92db55f20a35e5d8d3e65e8" data-rm-shortcode-name="rebelmouse-image" /><p>Store signage not only delivers a written message, but also a type of 'body language' that Customers tune in to, albeit not always consciously. Look around the store to see both the written and hidden messages, and hear the tone being communicated: ask, do messages speak respectfully to Customers? For example:</p><ul><li>Signage at the entrance rudely telling Customers what the rules are, even though 99.999% of Customers will never even think of shopping without shirts or shoes, or wearing roller blades</li><li>Narrow limits on the quantities of promoted products or services.</li><li>Rules and restrictions, terms and conditions.</li><li>Aggressive security barriers and gates at entrances – although sometimes operationally necessary, these also tell honest Customers that they, the shoppers, are not to be trusted.</li><li>Phony expiration dates for promoted prices – Customers learn that the deal will be repeated soon, if not immediately. Best example is the many carbonated soft drink promotions below shelf price that are repeated frequently, and the innumerable 'roller' prices practiced by many retailers.</li><li>Stupid pricing signs (any stupid sign, really).</li></ul>3. What messages are Employees receiving?
<img class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true" data-runner-src="https://customerfirst.dunnhumby.com/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNTE0ODUwMS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyMDgxMTUyMX0.qIFlDdRtVT6COWsq65y1HkU9T_h2a-eAd1BYtGRRjLY/image.jpg?width=980" id="7531a" width="640" height="360" data-rm-shortcode-id="1de66f41a3b797324b2689f9e3e7109f" data-rm-shortcode-name="rebelmouse-image" /><p>While walking the store, traveling through stock rooms and the employee break room, note the signage and messaging aimed at staff. What seems to be valued more – numbers or people? </p><p>What policies and rules guide employee behaviour?</p><p> How are they expected to interact with Customers? </p><p>Are the messages respectful of staff? Of Customers?</p><p> What do signs say about the culture around Customers?</p>4. Who has the power to satisfy Customers?
<p>dunnhumby's Loyalty Drivers analysis suggests that Customers exhibit four 'mindsets' in their shopping journey – Discover, Shop, Buy, and Reflect. One element of the 'Reflect' mind-set includes the decision to return, exchange, or to request a refund when the product or service does not quite suit.</p><p>On your store walk, observe who has the power to satisfy Customers making a return or wanting a refund: is the front-line employee empowered to satisfy the Customer, or must the Manager be called? Is there one 'service' desk where Customers must queue to get their money back, or can the helpful cashier make it good on the spot?</p><p>Examine the return policy to assess its sensibility and ease from a Customer viewpoint. For example, must a Customer act within 7 or 30 days, and is a receipt required and signature under penalty of perjury? Is the taking of an oath necessary, or perhaps a drop of blood? The store's practice says volumes about who deserves trust in the eyes of the business. Requiring levels of approvals and higher management involvement (or some other form of hoop-jumping) is neither trusting of employees nor Customers.</p><p>The return / refund policies and practices are strong indicators of a company's readiness for, or progress along the Customer-centric journey. Customer First organizations give front-line employees broader authority to resolve Customer needs, and extend the power to satisfy Customers to most members of staff, in some form. For best practices in this area, please see the policies from Nordstrom in the U.S. and Ritz-Carlton globally.</p>5. Do the words of your leaders matter?
<p>Senior leaders set the tone for how Customers are regarded and treated in the business both by their words and their actions, of course. And the C.E.O.S – <u>C</u>ustomers, <u>E</u>mployees, <u>O</u>wners, and <u>S</u>uppliers – all take notice. It's widely documented that leaders who walk the walk are more effective than those who only talk the talk.</p><p>One simple yet powerful way to assess readiness and progress is seeing how leadership's walk and talk align. A word cloud, like the one illustrated below, makes the point very clear. In this example, recent shareholder statements (same quarter) were compared for two companies on a Customer-centric journey. We can see different progress in a form of 'walking the walk' at Retailer X and Retailer Y. The C.E.O.S are hearing what really matters to the leaders, and are forming the Customer culture accordingly, all the way down to store level.</p>Implications for retail leaders
<p>The store shapes Customers' perception of the brand; there are hundreds of opportunities for the retailer to win or lose loyalty in each shopping trip. Customers take clues, consciously and unconsciously, throughout their entire shopping experience, and draw conclusions about retailer warmth and attitude toward shoppers. And it only takes one disappointing experience to erase all the good.</p><p>Retail leaders must take an objective assessment of the shopping experience using a Customer lens to understand their current state and readiness for customer centricity. Pay close attention to the body language and tone of your policies. Store signage, employee empowerment and communications, and practices around assortment and presentation are clear indicators of the organization's attitude about the Customer.</p>Who actually runs your store?
<p><em>This is the first in a series of LinkedIn articles from David Ciancio, advocating the voice of the customer in the highly competitive food-retail industry.</em></p>With the balance of power shifting from business to consumer, it's no surprise that improving the Customer experience is something high on the agenda of many brands and retailers right now. This month for our 3 minute interview, we talked to Emily Turner, Customer Engagement Director for dunnhumby in North America, to hear her views on what retailers and brands must prioritise to deliver truly high-value Customer experiences…
With the changes going on in the retail landscape, what factors do you think retailers and brands need to prioritise more than ever?
Building trusted and transparent relationships with their customers. A good relationship starts with being open and honest about how they use their Customers' data and what benefits they deliver in return.
Customers generally trust retailers with their shopping data and are happy to share it providing there is a fair exchange of value. Not providing value back to customers in return through the experiences retailers and brands deliver, whether that's in the form of irrelevant messages or ignoring channel preferences, is one of the fastest ways to erode that trust.
By using Customer data to design and deliver a superior experience for the Customer, retailers and brands have a greater opportunity of making every interaction more personalized and more rewarding, meeting the customers' needs in that moment.
What do you see being the biggest challenge that retailers face in putting Customers First?
Commitment. Being truly Customer First takes unwavering organisational commitment. It is not for the faint of heart!
Yet to keep pace with Customers' ever-evolving needs and expectations, retailers can't afford not to put the Customer at the heart of their decision-making. We work with many partners around the world to develop the right strategies that enable them to undergo this transformation.
It's not easy to do and another of the biggest challenges is knowing where to start and how to make the change manageable. With over 30 years' experience in using Customer data and advanced science to create unique and meaningful Customer moments, we have the necessary know-how to help retailers and brands achieve it.
Tell us a little bit about how the Customer Engagement team at dunnhumby helps customers win.
We start and end with the customer. We're committed to helping our clients keep up with their connected Customers to improve every interaction their customers have with them, by delivering highly personalised and relevant experiences.
What are your trend predictions for the upcoming year?
Customers will continue to want to be treated like individuals, to choose how and when they want retailers and brands to communicate with them. They're also increasingly looking to exercise more control over the experience they receive through things like selecting the benefits they want within a loyalty program for example.
For retailers, there will be an increased focus on removing friction, reducing barriers and building seamless Customer journeys across channels.
Customers are becoming more and more aware of the value of their personal data, questioning who is collecting it and why. They expect companies to treat it with respect and use it wisely to provide more personalised services and offers.
Customers are only going to get more demanding, and as such, retailers and brands will need to relentlessly pursue what matters most to their Customers. Or else someone else will.
The Customer Engagement team at dunnhumby helps retailers and brands identify and quantify Customer headroom opportunities, to enable personalised communication strategies and enhanced Customer experiences. Contact us to find out more.
Big data is no longer an advantage for only the big guys. Just ask Heinen's.
As I wrote in my previous article, being truly loyal to customers is, above all else, about creating a better store experience. Naturally then, the role of big data analytics (customer science) must be to improve the traditional '4 P's of marketing – so that customers better find the right products, at prices that shout better value for money, and in promotions that more clearly deliver exciting value.
Typically, the costs and complexities of harvesting insights from big data to improve the 4 P's have shut out smaller retailers. But today's cheaper cloud computing and open source technologies can now enable big data advantages to small companies. Data has been 'democratized' in a way that size of retailer no longer matters. To wit: leading the application of big insights in small spaces is Heinen's, a 23-store chain headquartered in Cleveland, Ohio.
If you want to see an amazing store experience born from inspired retail art together with applied customer science, you've got to see the Heinen's store in downtown Cleveland. You are sure to notice that Heinen's have transcended the traditional 4 P's to add 3 new P's of Customer Engagement – People, Place, and Personal – and have thereby become even more loyal to their customers. There's a link to a special video feature about this incredible store at the end of this article.