How Retailers Can Use Advanced Analytics to Combat the “Amazon Effect”

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How Retailers Can Use Advanced Analytics to Combat the “Amazon Effect”

By Ed Jimenez - 11/08/2016
In a world where consumers increasingly shop online, brick-and-mortar retailers are struggling to meet new demands for personalization and convenience. Known as the “Amazon effect,” today’s shoppers expect all of the personalization, convenience, advice and other options offered by online retailer Amazon, in all of their consumer interactions.
 
Online retailers like Amazon are successful because they have the ability to gather a tremendous amount of data about their customers. They can track which online departments shoppers visit, what they search for, items viewed, items they add or remove from carts, purchases and what they abandon. By combining this with CRM and loyalty data, retailers use this knowledge to design a personalized and convenient shopping experience that delivers exactly what the consumer wants, at exactly the right time.
 
But what retailers are only now beginning to understand is that they can track and deliver the same level of context and personalization in the brick-and-mortar store.  The key to achieving this is understanding how to engage with the mobile connected consumer.
 
Many retailers have yet to grasp the full impact of the smartphone on their ability to integrate the physical and digital shopping experiences. A 2015 Informate study showed that the average American spends 4.7 hours a day on their phone. And, according to a Bank of America study, 71 percent of consumers sleep with their smartphones at their bedside! Retailers need a clear strategy to fully leverage this omnipresent machine-person relationship.
 
The basis for such a strategy relies on using Wi-Fi analytics to capture context around physical engagements. This pervasive presence lets retailers gather shopper context – such as analyses of behavior (arrival, pathing/browsing, lingering) – to comprehend their needs and wishes, just as online retailers do. But better still, the store experience can now be integrated with the online experience, sharing information about behavior across channels. As just one example, retailers can see whether an online shopping cart has truly been abandoned, or whether the customer went to the physical store to inspect the product and buy it in person.
 
Additionally, the store is now able to respond to online data, telling associates about the customer’s online searches, identifying their areas of interest and streamlining pick-up. To deliver an integrated experience, this data also needs to be incorporated into self-service tools, mobile applications and contact center agents as well. (Note that the shopper’s consent to be tracked is assumed in an online relationship, but needs to be obtained in the store.)
 
Integrating onsite behavior and context with CRM data brings the store much closer to true omnichannel retailing and enables them to deliver a highly personalized experience.
 
Three steps are needed for retailers to embark upon their own “Amazon effect”:
 
1. Help shoppers realize the value of the personalized in-store experience throughout the loyalty and mobile application registration process.
2. Develop the ability to detect, analyze and respond to consumers with mobile devices.
3. Create a data architecture that lets stores leverage customer context throughout the purchase path and across channels.
 
By launching a digital transformation based on thoughtful, reliable analytics, brick-and-mortar stores can achieve meaningful insights that allow them to reach out to shoppers in a new way.  By delivering the hyper-personalization and convenience that today’s consumer expects, brick-and-mortar retailers can challenge and match the “Amazon effect.”

Ed Jimenez, Director, Consumer Sectors Industries, Digital Transformation, Cisco