Context in the Age of the New Consumer: How Data is the Ultimate Differentiator
Change is the one constant in today’s retail industry, and recent events have only stressed that fact further. As trends and technology continue to evolve, so do consumers’ expectations. To create the engaging, personalized experiences that consumers crave, organizations need to have a holistic, 360-degree view of their customers.
The thought of a tailored experience is so appealing that Smart Insights research found that 72% of consumers say they will only engage with messaging that is personalized to their specific interests.
This new sentiment presents retailers and organizations with the unique opportunity to create a digital experience where the consumer feels known and valued based on contextual information like user activity and shopping patterns. With this new insight comes a new responsibility for organizations to handle the data effectively and deliver on the promise of personalized experiences.
Data is King
The first step toward a more customized shopping journey begins with a solid foundation built on data. By having a 360-degree view of who their customers are and what their engagement history looks like, organizations can strategically create customer experiences specific to these personalized engagements.
According to Gartner’s Penny Gillespie: “Customers expect to be recognized and want their experiences personalized. If they don’t get it, they may go elsewhere. … The key is to bring value to customers and keep data use in context.”
With this end goal in mind, it is also important to address the inherent challenges of collecting the data. Questions about privacy are often at the forefront of consumers’ minds, and according to Smart Insights, 86% of consumers are concerned about their data privacy. The relinquishment of personal data needs to be clearly outlined upfront in disclosure policies.
Once data concerns are identified and addressed, and organizations have outlined precisely how they will safely collect the data, the challenges of gathering consumer information looms ahead. The right technology will be able to collect and organize data from each touchpoint in order to build the desired 360-degree profile.
This can be a substantial undertaking, and organizations often look outside of their company to create the most engaging customer experience that converts and derives valuable insight.
Personalization versus personas
Most retailers will openly admit that personalization is a key component in their business marketing strategy, and for good reason: “80% of consumers are more likely to do business with a company that offers personalized experiences,” according to Epsilon research.
If organizations didn’t have effective insight into who their customers are or what they want from a digital experience, then there would be no way to build a personalized journey. At a high level, customer personas can help segment specific types of consumers, but this is still a far cry from effective personalization.
A marketing strategy based on personas can lead to misinformation and incorrect segmentation if retailers aren’t careful. Oftentimes buyer personas aren’t built on actual data, but on more generic information like gender, geography and age. Not all males in their ’20s who live in California are interested in swimwear. Perhaps the ideal customer lives in Northern California and is instead interested in sweatshirts and free trade t-shirts.
The specific context is imperative to delivering the right customer experience, and the error could be enough to drive a consumer to a competitor. It’s part of the organization’s due diligence to find ways to address the limitations of personas and offer differentiated experiences.
Unlocking the benefits of third-party data
The linear, A-to-B-to-C customer journeys of the e-commerce past will not help in today’s nuanced market. The journey has evolved significantly and created new complexities that can best be captured in consumer data. Here is where the benefits of collaboration with third-party data and advanced AI capabilities can be measured.
For example, new Capgemini research suggests the consumer products industry is seeing an increase in AI implementation maturity where 56% have launched AI pilots/proof of concepts, but they are not yet in production. Twenty-seven percent have a few use cases in production on a limited scale.
Conagra Brands’ AI platform collects data from social media sites and market-research companies to identify consumer preferences. In fact, the platform helped identify a new segment of consumers interested in compostable packaging. This led Conagra to introduce a new product in compostable containers.
The same research identified the retail industry as making significant strides in progressing their AI initiatives as planned or even quickened the pace of deployments (53%). The data that results from these initiatives can make the difference between an engaging, personalized experience and a “one size fits all” approach.
The perfect collaboration combination
As your organization weighs the value of third-party data, it’s important to ask a handful of questions about your existing customer journey:
Do you know what led your customer to your brand in the first place?
How is your brand’s customer journey different than your competitors?
How does data from your loyalty program affect the buying journey?
Are your customers making any kind of unexpected or surprising behaviors?
There’s a good chance your organization can’t answer every question with basic customer analytics. This is where third-party data can benefit your organization and strengthen the customer experience along every step of their journey.
A differentiated brand experience driven by insightful data is what consistently sets companies apart from one another in today’s experience-driven economy. Take the next step and bring your organization’s customer experience to the next level.
Suzanne Larabie is a VP with Capgemini who provides vision and innovation to clients as they seek to transform their businesses. With a strong focus on data and analytics, she helps clients understand how to leverage data-driven insights for competitive advantage. She can be reached at [email protected].