Leveraging the 'Lifeblood' of Business: Scaling Personalization to Drive Customer Loyalty


Navigating the ever-changing landscape of customer engagement has only become increasingly complicated given today’s digitally mature customers, powerful technologies and expanding data sources. If you’re struggling to bridge the gap between the experiences customers expect and what your business can deliver, you’re not alone. So, how can businesses create the “perfect storm” of hyper-personalized, scalable engagements that customers demand?

Read on for insights from leading thought leaders who explore the concept of customer adaptive retailing and how elevated master data can help improve operational efficiency and establish true customer trust to create brand and retailer evangelists.

Below is a transcript of RIS' latest webinar "Gain a Single View of Business." Read on for insights on how to boost brand loyalty with the "lifeblood" of business.

Albert Guffanti: Hello everyone, and welcome. My name is Albert Guffanti, the publisher of RIS News. I'm excited to introduce today’s topic, which is part of a larger series called The Customer Channel. In this installment, we'll dive into how to "Gain a Single View of Business." 

As the need for digital transformation accelerates, it can feel like there is a long and daunting list of topics to consider. First on that list is understanding your business through a single lens, and doing so starts with master data. Today, we’ll explore why master data is a lifeblood of business and how marrying data sources together can improve operational efficiency and grow customer loyalty.

We'll explore the journey towards customer adaptive retailing. This is defined as, "transforming retail beyond omnichannel to a single adaptive focus on the customer" and shifts from retail channel thinking to a myopic focus on the only channel that matters: the customer.

Today I am joined by two experienced and knowledgeable panelists, for a conversational-style discussion. First, Dave Gruehn, a senior customer experience solution director of retail at SAP. Next, Randy Evans, an industry advisor at SAP Industry Advisory, Food and Retail. Dave, Randy and I got the opportunity to have a conversation on the first installment of The Customer Channel webinar series, which was a fascinating discussion. Welcome, Randy and David, great to talk to you again.

Speakers Slide
Webinar Speakers: Dave Gruehn, Randy Evans, Albert Guffanti

Why don't we start off with a brief intro to both of you, your roles, how you're coming at this topic and what you're focused on. Dave, let’s start with you.

Dave Gruehn: I'm Dave Gruehn, based in Dallas, Texas. I have been in retail now for a little over 30 years, focused almost exclusively on harnessing emerging technologies to enhance customer experience. I've been a management consultant, a CIO in the specialty segment, and spent the last 21 years with two technology giants, Microsoft and SAP. I’ve been laser-focused on this amazing ride of disruptive technologies that consumers adopt and assimilate in their lives much quicker than retailers do, which makes this a very exciting time to be associated with both.

Randy Evans: I'm Randy Evans, an industry advisor. I focus exclusively on food retailing — grocery, drug store, convenience. I've been with SAP for almost 14 years. Prior to that, I worked for H-E-B in South Texas; American Stores, which is the parent of Jewel Chicago; ACME Philadelphia; and Lucky Stores in California.

Guffanti: Welcome both of you to the webinar. As I mentioned, we're in good hands with these two panelists. They've seen a lot over the years, but probably not as much as we've all seen in the last couple of years. There’s certainly a lot to dive into here. This topic of The Customer Channel has been developing for quite a long time now. This URL opens up to an entire destination of content that articulates the roadmap on "How to Achieve This Single View of the Customer and Have the Customer Be the Channel." David, can you provide a brief recap on The Customer Channel and all the pillars that comprise the journey we're on?

Gruehn: During our first episode, we set the stage for The Customer Channel, which is SAP's vision. It's all about our vision and intelligent infrastructure for helping retailers that aspire to become customer adaptive retailers. We began the journey by talking about what's driving this: the fact that customers have been involved significantly. They realize they're in complete control — the retail super-byway — they're more confident, more informed and more connected than at any time in history. They're much more aware now than ever before; they have options and they know they're in control. This has significantly raised expectations for every retailer, but, at the same time, we discussed, and will be exploring as we march through this journey, that for the first time since the golden age of retail, they're much more willing than ever to establish personal relationships based on trust, control and perceived value.

Webinar - Slide 5
Webinar Slide - Customer Experience Maturity

As retailers do, they're always adapting to stay relevant. Since the late '90s, retailers have been shifting from multi-channel to omnichannel retailers, which began this focus, or refocus, on the customer and creating seamless experiences. Now, they're aspiring to know individual customers personally, at an intimate level by using this knowledge to create trusted relationships with each customer, which deepens that connection. Retailers want to harness this information throughout the organization to treat every customer the way that inspires them to ultimately become customers for life. This is going to require retailers to be able to adapt to the customer in the moment and create personalized, predictive experiences at every touch point, including hyper-personalized and relevant promotions as well.

We talked about retail's "perfect storm." These three forces that are coming together as we speak: The digital maturity of customers, the digital awareness of retailers and this massive explosion of emerging technologies enabling hyper-personalization to become a reality between retailers and customers.

This whole Customer Channel concept is about helping retailers harness this opportunity to become customer adaptive retailers. A lot of retailers are still shifting from being multi-channel to omnichannel, but the leading-edge retailers are already beginning to explore this shift to customer adaptive retailing. We set the stage in the first episode for how to begin this journey. We talked about two critical core focuses: digital transformation and customer-centricity or cultural transformation. Then, as a segue into today's topic, we closed out the last session by introducing the core pillars, the things that are absolutely critical in becoming a customer adaptive retailer:

  1. A single view of the business
  2. The ability to establish true customer trust, which unlocks the doors towards hyper-personalization
  3. The notion of abandoning legacy thinking around retail channels
  4. Unifying all channels into a laser-focus on the only channel that exists anymore — The Customer Channel
  5. The critical nature of having a connected, integrated digital supply chain

Today, we're peeling back the onion on this first core pillar: the single view of the business. If customer experience is the engine that drives the future of retail, then data is the fuel that's driving that engine. We're going to be talking a lot about data, but also about the fact that technology alone is not going to get us there. Retailers must become customer-centric, which means the first question every retailer must ask of themselves in every future challenge and opportunity must be, "How does this impact the customer?" Let's begin this first pillar of exploration around the single view as a business. Randy, since this is your forte, why don't you introduce us to SAP's concept of the single view as the business?

“If customer experience is the engine that drives the future of retail, then data is the fuel that's driving that engine.”
Dave Gruehn

Evans: When David and I sat down about a year ago to drop into this concept, we were discussing what it means for the retail industry, or actually for the industry as a whole —anybody that's selling things to customers. It was difficult to get our arms around because whenever we say digital, most of the time that translates into e-commerce strategy and how that impacts your business. In the context of the Customer Channel, the first pillar is this concept of a single view of the business. There are two elements of this that are going to be important to talk about.

The first is master data — you all have this; it is not a new concept. This is your item details: location, costs, margin, retail — all the components of what it takes to manage products and the information around those products, as well as information about locations and customers. For the most part, it's mundane and people think, "Of course, we have master data,” but we're talking about a different view of master data. David just mentioned it's 50% technology and 50% cultural. Well, that's the gist of this. You have to not only have master data, but you have to be passionate about it. It has to be on everyone's mind because data is the lifeblood. It's the gasoline. It's what's running the engine, and if it's not good, that engine is not going to operate at peak performance.

The second component of the single view of the business is inventory. As you know, inventory's the most difficult thing to capture in a retail environment. How much do I have at a store or anywhere it exists or in my infrastructure? What does it cost? Is it accurate? What's my retail? All the details have to be managed and become visible both physically and financially. In most cases, we find that this information, this data, is dispersed in a lot of different ways. Most of the time it's locked up in business processes, like supply chain, back office or category management. The issue becomes there's no collective single view of it.

Supply chain has their version of master data that they care about. Merchandising, category management, buying, whatever the terminology you use, each has their version of it that they care about, and they buy technologies to do their portion of the process. What that creates is a disjointed view of inventory and master data, ultimately creating what I call “data dams” that control the flow of information. In the future of this Customer Channel world, the ability to let that information flow freely across multiple processes and areas is an imperative. You can't survive if you are chunking it all up and being myopic on the way you deal with it. At its core, it's elevating master data and inventory to its proper place and building processes around making it accurate and collectively visible across the entire enterprise.

“Well, that's the gist of this. You have to not only have master data, but you have to be passionate about it. It has to be on everyone's mind because data is the lifeblood.”
Randy Evans

Gruehn: This is basic “Retail 101” stuff. What we want to highlight today is the significant changes that have occurred in retail over the last 10 years. Randy and I have both been in retail a long time. There's a significant amount of change in the customer and their expectations based on their digital maturity. This has significantly changed how retailers need to look at the traditional view of the business. Would you agree?

Evans: Absolutely. Think about the last two years and the impact the pandemic has had on all organizations, inside retail in general, but drop into all of them supply chain, store, operations, merchandising, marketing — it's had a massive impact. Basically, retailers need to ask themselves, "Does this, whatever it is, master the data element, inventory position, impact or create a positive experience for the customer?" If the answer is no, you need to rethink it. Again, back to this concept of master data or single view of the business, this is the foundation for all of those processes that we're going to talk about as we get through this.

Gruehn: It's going to be an interesting challenge because most retailers — and I was a CIO, I understand this — want to initially gravitate towards the technical solution to fix the problem. This world has changed. This is about technical transformation, but it's most certainly about customer-centric, cultural transformation, as well. We're going to get into that as we go through this episode.

Evans: In the past, master data was considered an IT problem and we asked IT to fix it for us. The impact was thought to be only technological, but at the end of the day, it's pretty obvious that this is customer impacting. It's one piece in moving toward that Customer Channel. If it impacts the customer, you better get it right.

Guffanti: This is fascinating, but it also sounds like we've been here before. We're talking about master data management, inventory. What's changed now? We all know the entire world has changed dramatically in the last couple of years, and we're talking about adaptive retailing. How do retailers truly achieve adaptive retailing when the ground is constantly shifting under our feet?

Evans: That's a great way to look at it. One of the things that has to happen is the customer has to be the center of the universe. That's not just the transactional universe, the marketing universe or the merchandising universe, it's also in this single view of the business world. The content that customers are leaving us, giving to us, has to permeate this process, and without accuracy, without that perfect view of master data, it's impossible to flow that customer information into it without getting it all jumbled up or not being effective in the way that you deal with it. You can't have multiple priorities. The foundational information — product, vendor, customer, location, inventory — all have to be synchronized so that when you infuse customer data into it, you are spinning in a way that's going to positively impact the customer.

Webinar - Slide 6
Webinar Slide -The Customer Experience Maturity Gap

It's a component of digital transformation. There's lots to talk about organizationally. How do you expect your category managers to be the owners of master data? If you do, what are the implications across the organization? They may not care about the supply chain quite as much as the supply chain does. There's a lot of complexities in how to figure this out, but if you're going to drive efficiencies, infuse and become customer adaptive, the foundational data structures have to be perfect. Then, when you do that, you're not saying, "Oh no, that didn't work. I've got a master data problem. I got an inventory problem." It's an imperative and it's more important today than it ever has been.

Guffanti: Randy, do you want to chime in on how retailers, from your perspective, can move away from being reactive to more predictive and customer-centric going forward? As Randy mentioned, there are so many stakeholders within the organization. They each care about their own little world or segment of it. How does the entire organization move forward together?

Evans: Back to that conversation about how you view master data, what you think about it. There's a lot of different ways to unpack that, but it's such an important component of the foundation that piecemealing it out is probably not the best idea. If you're looking at master data, it warrants a myopic view of it and focus on it, and maybe building an organizational structure around it is worth considering. If you don't, if you try to let it go to the components of the process that owns it, you'll end up with that sub-big picture, which looks only at my responsibilities and making it work for me, but not necessarily work for everybody else.

Gruehn: It's interesting that we're talking about the ship from the traditional aspects of how businesses run and what retailers looked at.

“In today's world, with the digital maturity of the average consumer, what they're able to see now, what they're looking at and looking for has also significantly changed.”

You mentioned the critical nature of inventory. Think about the spotlight that COVID placed on inventory over the last couple of years. It was much easier to get by with somewhat accurate store-level inventory when most people were shopping in stores and bought what you had or made on-the-spot adjustments. Today, many stores are now online. For online fulfillment centers, this gap in accuracy becomes an issue. Inventory availability issues are more easily exposed, which impacts customer experience and perception, or worse, people are paying for things in their V-carts that aren't available in the store, which causes huge customer experience issues.

Evans: Not to mention financial implications. It is a big deal to understand inventory. A lot of times I talk about store-level inventory because that gets to the epitome of where the problem exists. But it's not just store-level inventory, it's enterprise inventory. Where does inventory live? Wherever that is, we need to know how much there is. How much is it? What's the financial and physical nature of it? What's coming in? What's going out? All of the components of being good at inventory management are imperatives.

That implies that the grocery, or any retailer, didn't understand inventory. That's not true. Every store order writer, whether in-store or at the back office, has a view of inventory and uses that context to make decisions about what to buy. But the system needs to know about the inventory, not just the individuals. That order writer walking around with a simple device, banging on UPC codes, and ordering products — they understand the inventory, but aren’t necessarily making good decisions because they don't have predictive visibility of what tomorrow's needs are.

Gruehn: That system is also what the customer's looking at, so that's their view of the inventory.

Evans: That's a great point. It's this data element, this view of the information that the customer is going to look at, and that goes back to whether or not this impacts the customer in a positive way. If so, absolutely get after it. If it impacts in a negative way, let's rethink it. Here is where that promise, that fulfillment of that promise comes in. It's not an option.

Over the last year and a half or two years, there's been significant gaps in fulfillment of those customer promises. Some of it was shortages because of the nature of the pandemic — the cleaning supplies, PPE and all that had issues because there was way more demand. But there's a lot that happened below the surface in the supply chain that was already happening. It got exposed because now it's not the customer anonymously walking around the store, it's a selector who goes to the slot to pick and finds the product isn’t there. That exposure to that out-of-stock item, not only to the company, but to the customer, means you have to solve it. You have to be able to figure it out. I can no longer live with this ambiguous sort of accurate view of inventory. It has to be accurate, it's not an option.

Guffanti: Randy and Dave, any parting thoughts on the Customer Channel and the roadmap, the pillars that we see here, any additional comments on that?

Gruehn: Well, I want to clarify, it’s not just exposing all the problems.

"There are three areas that we're suggesting that retailers need to focus on, or at least need to think about, taking some action around."

We've talked pretty heavily about the critical importance of perpetual inventory and why that's more critical than ever, but there's a couple others that are worth mentioning. We'll be exploring these further in some of the other pillars. Randy, breaking down the data in the procedural silos, you mentioned everybody in the retail environment needs to care about master data. Any additional points you want to highlight on that?

Evans: It's interesting that we're talking about master data in light of a personal experience. I bought a washer and dryer online. We checked the measurements of the product online, measured our hom, and found the product that would fit into the space that we needed it to fit into. When the driver showed up with the product to do the home delivery, the driver was using the box data — the outside of the box data — to do his measurements and determined that the product would not fit into the space we provided for it.

Well, he was using a data element that was not available online: the box size. It was the dimensions of the actual box the product was sitting in, and that box was two inches larger than what our space allocation was. He, and we, said, "Wait a minute." We knew we checked it online — it said 32 inches and the box is saying 34.5, but that's not the product. Needless to say, we didn't get it. We actually had to reject the delivery because the guy refused to take it out of the box and put it in.

Gruehn: This was an emotional purchase. This was a washer and dryer that you had expectations of.

Evans: Exactly, and it wasn't cheap. But it’s a great example of bad master data. The content should have said dimensions of the product as well as the dimensions of the carton. That way, the driver would have understood that the product inside is smaller and would have fit the requirements we had. Master data is important, and when it impacts the customer negatively, like in my instance, it's not a good experience.

Gruehn: One of the key things as we've been elaborating on with this shift towards customer retailing is that it's not all about the technology. While the digital transformation and the data are absolutely crucial, this is about breaking down not only the data silos, but the procedural silos as well. Business processes are going to need to adapt along with the infrastructure changes. This could ruffle some feathers, but a lot of retailers, companies and technology companies like to say they're customer-centric. We're all customer-centric. Customer-centricity is a verb, not a noun. It's all bad action.

“Everybody can throw ’We're a customer-centric company‘ into their marketing, but as in any relationship, it's what you do, not what you say.”

It’s going to be critical for the culture shift that everybody understands the importance of laser-focusing on the actions you take that affect every single touchpoint — every opportunity to positively or negatively influence a customer's experience and how they view the brand. Then, finally, it's all about unlocking the invaluable customer data that exists within this Retail 101 basic environment. There's so much rich customer data in these TLOGs — give them a purpose. What are all the valuable touch points that exist in the traditional systems that need to be unlocked and unleashed into that customer-360-degree view that enables the entire organization — whether in the back office, the frontline, or the supply chain — to take advantage of the knowledge and convert it into positive actions that shape the customer's experience and perception of the brand.

Evans: Again, back to that concept at the beginning: If you're going to infuse the customer into all that you do, your foundational information has to be pristine and perfect. That way, when that warehouse manager looks at a late truck and realizes, because you're utilizing customer data, that there's a customer order on that truck. The ability to say, "We're not going to receive it because it's after hours" changes because I'm not shorting an anonymous store, I'm actually taking product out of an order that Mrs. Jones wrote and likely already paid for.

Gruehn: You're trading an expectation, like your dryer.

Evans: That's exactly correct.

Guffanti: You're talking about a single view of the customer. Are there certain types of, or certain segments of, retailers who are doing this well right now? Whether it be size or category of retailer. To extend this question even further, are there actual retailers that you know of who are doing this right?

Gruehn: What's interesting is we're in a massive transformation. A lot of this is being invented or the KPIs are being traded as we go. Obviously, the leading-edge retailers — Amazon clearly, but retailers like Carrefour or Co-op — who have publicly stated, not only that they're rapidly pursuing digital transformations, but especially in Carrefour's case, they make it a point to say, "We absolutely understand how essential it is to shift our culture." They're a grocery store and they're saying, "You know what, we want to add value to our customers' lives. We want them to look at us differently. We don't want just loyal customers. We want evangelists for our brand because the value we add to their lives is so rewarding for them that they want to brag about us." It's fulfilling for the retailer, but it's also going to be the key to lifetime customer value and LCV going forward.

Evans: I would add that the footprint, or the persona, of the successful ones are the ones that are willing to continuously invest. But it's not a train stop, it's a journey.

If you have this concept of, "I'm going to spend X-amount of dollars on technology, and then I'm going to be done," well, that doesn't work. It's never done. In fact, if you just look at the last two years, what do we look like today versus what we looked like two years ago? The pace of change is incredible. You've got to get out of that mentality that we're going to go buy some technology and solve the problems. It has to shift to getting on a journey of continuous improvement, continuous investment and continuous focus on the shopper and what she needs from us to become that evangelist. That's a great way to put it: We don't want loyalty, we want evangelists. We want customers that are going to say, "These guys are awesome. They know me, they do what I want, and they actually come to me with things that I didn't even know I wanted." It is really the definition of customer adaptive retailing.

“Shift to getting on a journey of continuous improvement, continuous investment and continuous focus on the shopper.”
Randy Evans

Gruehn: That's a great question to lead into the future episodes where we get into some of the other pillars around trust, personalization and digital supply chain. What do we do with this data? Who is going to use it? How are they going to use it to impact this change that we're talking about in customers?

Guffanti: This has to do with retail-supplier collaboration. How vital, how important is it to gain alignment or have the same conversation that we're having right now with the consumer goods' brands and suppliers that are trading partners?

Evans: I'll jump on this one with my years of being a category manager. I understand the confrontational nature of the relationship between providers and buyers. There's been multiple attempts to build platforms and build this concept of collaboration. It always falls apart when it comes to inventory because suppliers are moving inventory and retailers are buying inventory. There's this weird dance that happens between who owns it, how much do we own and is it the right amount. In the future, when you put the shopper in the middle of that conversation, instead of it being about your warehouse versus my warehouse, it's about shopper-evangelism, so it changes. Not only are we trying to gain the trust of our shopper to be an evangelist for us, but there's also that evangelistic nature for the brand.

There's an incredible need to stop the inventory dance and get into whether or not this impacts my customer positively. If it does, then it's good for both and we're going to do it. RIght now, it’s “I got a billion-dollars’ worth of inventory I need to get out. So I'm going to go and send the retailer to buy it, whether they need it or not.” Even more importantly, does the customer need it or want it? You need to get out of this artificial push and into what the customer really needs to become that evangelist for both brand and retailer.

Gruehn: It'll be fascinating to watch this play out as the relationship between the providers, the CPGs and the retailers because that's a game that's being reinvented quite a bit as well.

Webinar - Slide 7
Webinar Slide - The Customer Channel

Guffanti: Gentlemen, thank you so much. That is all the time we have for today. This is part of an ongoing series of discussions under “The Customer Channel” umbrella. Once again, thank you Randy and David for an interesting, timely and very important discussion. We look forward to continuing that discussion as we move forward. Thank you everyone for joining us. I hope you found it to be productive and informative. Have a great rest of the day.