Improving online and in-store integration is a priority for many omnichannel retailers in 2023. Tesco, for instance, has seen huge success by making its Tesco Pay + app integral to improving the customer in-store experience. The app allows customers to pay with their phones and collect Clubcard points, and has already exceeded £1 billion in payments.
Meanwhile, H&M views more effective integration as a key component of its strategy to recover from a loss of operating profits caused by its withdrawal from Russia due to the war in Ukraine. But many other retailers are encountering roadblocks as they simply aren’t aware of what constitutes good practice in this area.
Synchronisation of the physical and digital is so highly prized by retail organisations because it allows for better customer communication, which in turn creates the opportunity to deliver intelligent, customer-first experiences. But siloed data – the result of isolated online and in-store insights – exacerbates a significant communication gap between retailers and their customers.
The communication gap
Recent data from Kin + Carta and Google Cloud shows that almost a quarter (24%) of retailers don’t know how to effectively communicate with their customers, while a further 19% see this as the biggest challenge in creating an intelligent customer-first digital experience.
Although the majority of retailers now have a mature online offering, they are often poor at capturing store-level customer data and combining it with online to take a holistic view of the customer journey. In order for these brands to create more engaging and profitable customer experiences, this needs to change. Moving to a mindset where every interaction is valued helps focus on attribution – how to capture data, activation, how to use data to personalise ‘next-best-action’ and how to engage the customer in product, service and brand loyalty.
Create an intelligence hub
Firstly, brands need to attribute and integrate the customer data they have at their disposal, both in terms of front-stage collection and back-stage analysis. By combining marketing data (impressions, clicks and conversions) with website and app analytics (page/product interactions) and in-store data (e-receipts and QR codes), retailers can map customer journeys as they transition between touchpoints. This creates a flywheel-style ‘data loop’, where information from each stage of the journey can be used to enhance the others.
It’s important to remember that bringing data together in this way to create an intelligence hub doesn’t have to start with expensive or complex tech solutions. It can be as simple as creating the right mindset amongst employees. For example, building cross functional teams allow people to pool data, draw insights and ascertain how they can be used to deliver better customer experiences.
By working with these insights in the cloud and starting with small experiments but moving fast, retailers will be able to iterate and evolve their approach. They will also be able to identify and prioritise the customer segments that stand to benefit most from intelligent experiences.
Focus on high-value customers
When creating intelligent digital-first customer experiences, it makes sense to deliver for high-value customers first. Improving loyalty and retention across the most profitable customer segments will generate the most significant ROI. Let’s take Trade and DIY retailer Toolstation as an example.
During our work with them, Toolstation identified that 70% of its sales originate from an online experience, despite having an approximate 50/50 split between online and in-store purchases. And while it had a wide customer base of general consumers who made occasional purchases, its most profitable and regular customers tended to be those with trade accounts, or even small businesses.
Based on these insights, Toolstation was able to conclude that many of its trade customers were searching products online before making in-store purchases, as they often needed a particular part or tool at short notice. This led to a reconfiguring of its inventory management so that stock levels for both online purchase deliveries and individual stores could be displayed on its app and website.
Armed with this information, trade customers were then able to travel to their nearest store where the item they required was in stock – saving them time and alleviating potential frustration.
Simplify customer communication
Although effective omni-channel communication with customers is an area where many retailers have room for improvement and some are actively struggling, the process for getting this right is actually quite simple.
It starts with systematically gathering all of the customer data that is available across both physical and digital touch points. Then it should be shared and cross referenced by a team of humans with complementary areas of expertise. These cross functional teams can draw insights and experiment with activations, focusing on high value customers first. Once a proven formula has been established, it can be rolled out more widely to additional cohorts.
Remember that it’s not always about opening up new channels of communication – sometimes it’s better to focus on streamlining existing processes to make them work better for customers. Tesco offers a strong blueprint for this. The company turned its app into the primary interaction point for loyalty by offering a clear distinction on price for being part of Clubcard. It incorporated payments, Clubcard wishlists, preferences, account information and more in a centralised platform. From a customer perspective, this is so much simpler than having these elements scattered across a range of communication channels.
While every retailer will need to say something different to its unique customer base, brands that look to data will always find an effective way to start the conversation.
