Technology has both significantly shaped customer buying behaviors and equipped retailers with new channels to reach their audiences. With these constant advances, it has become more difficult to compete within the global online marketplace, as the cost of meeting customer expectations keeps growing.
But retailers have a powerful trick up their sleeve: data and analytics. They should use both to their best potential to make accurate predictions and personalize their offers. After all, 80% of customers are more likely to purchase from a company that offers personalized experiences.
So how can retailers drive the most effective data usage?
Why collect data – and what data points to focus on?
Customer data is vital. It records a customer’s basic profile, what device they used, and which items they browsed and purchased. Collecting this information and assessing it from a historical perspective empowers retailers to make smarter business decisions.
Retailers should focus on purchase records, browsing history, click-activity, customer contact information (email, phone number, address), location, device, and search engine or channel.
On one hand, some specific data points – such as contact email or phone number – can be directly used in marketing efforts. This type of information helps retailers promote products by sending promotional emails and messages – something that’s way more effective than regular ads.
On the other hand, group customer data can guide retailers to design the correct marketing strategy, promote the right products to the right people, and make sure that all their efforts are well-reasoned and highly targeted.
Using the data to drive e-commerce performance
While 74% of companies want to be data-driven, only 29% are successful in connecting analytics to action. To do that, retailers should build customer personas and constantly enhance them. With new data points coming in regularly, retailers have a clearer idea of their customers and can highlight preferred products with unprecedented accuracy.
Data opens new doors. Contact information helps establish a constant communication bridge: Retailers can send emails and push notifications to customers – both newsletters and real-time messaging based on a triggered action. For example, cart abandonment emails have an average open rate of some 40% and bring retailers a sales uplift of 4.43%.
What’s more, by analyzing historical data from month to month, and year to year, retailers can be more sensitive to the changes in customer requirements and references. They can predict trending products in advance and run timely promotions, something that adds a valuable competitive edge.
The key to unlocking data potential? Overcoming challenges
Some datasets are confidential with ambiguous handling requirements, making them of little use to retailers. It’s essential to always ensure to collect and manage customer data in the correct and ethical ways; trust, once broken, is difficult to regain.
Likewise, retailers need to know that data may not always reveal a clear tendency. If that happens, it’s important to dig deeper. According to Forrester, up to 73% of company data goes unused for analytics. Revamping the approach and employing data analysis skills is key.
Data can also be deceptive – one effective campaign doesn’t mean retailers should sit back and relax. Hidden behind some positive conclusions, small loops can be ignored easily. So remaining agile and reassessing constantly is a part of the process.