Retailers need to move to customer-centric model
For all their talk about the customer, most retailers have yet to evolve to a business model that is truly customer-centric.
That’s the conclusion of a new industry study by strategic consulting firm The O Alliance that was created in partnership with Revmetri.
“Customer-facing tools such as smartphones, tablets, and in-store kiosks have become mission critical to the shopping experience, yet most retailers still have not integrated these tools into a cohesive system that creates circular commerce,” said Andrea Weiss, founder, The O Alliance. “While omnichannel was about giving shoppers a single view of a brand across all touch-points, the customer-centric model is about giving the brand a single view of the shopper, understanding who she is, what she wants, and how she behaves at all time.”
The report, “Retail Transformation Under Way: Achieving Customer-Centric Commerce,” surveyed 150 senior executives from across all sectors of the retail industry. It classified the respondents into three groups: leaders, followers and bystanders. “Leaders” are executives who have taken steps to better understand consumer data and invest in customer insights, technology and organizational redesign. “Followers” are those who have big plans and have made some progress, to move towards customer-centric business. And “Bystanders” are executives that haven’t showed any meaningful progress or plans.
The study featured five strategies used by retail “leaders” to achieve customer centricity, starting with the need to track a customer’s behavior across channels.
“To achieve true customer centricity, retailers must connect a shopper’s activities online, in store, on social media and via mobile apps to create a universal customer profile, the study recommends,” the report noted.
The other strategies included:
• Measure success of cross-channel marketing: The study revealed that while 70% of the industry uses cross-channel promotions (i.e. email campaigns to drive in-store purchases), 48% of all retailers still lack the ability to measure the success of these very campaigns. It noted that customer-centric “leaders “ are implementing tools that provide a strategic view into each campaign, allowing them to gauge effectiveness, attribute credit to the proper promotion or channel, and leverage that insight to drive future marketing decisions.
• Centralize data solutions. Many retailers still lack the proper integration solutions to effectively manage a cross-channel shopping experience, with 37% of companies not combining e-commerce and in-store transaction data in a central database, and only 9% currently link social media activity to their customer data files. “Leaders,” however, are adopting flexible, cloud-based solutions that allow them to easily access all product and customer information in one centralized place.
• Structure a customer-centric organization. While most companies recognize the importance of integrating business functions across channels, it’s the aggressive “leaders” that are actually implementing this change, with 97% reporting they have integrated at least one team to date.
In addition, these retailers are taking steps to address the talent and leadership issues demanded by these changes, with 43% stating that they either have, or plan to have, a C-level executive in a customer centric role.
• Crush obstacles to customer centricity. The survey identified the key challenges retailers face in moving to a customer-centric model, including inadequate talent (33%), organizational silos (29%), cash restraints (28%), questioning the promise of technology (26%), and lack of leadership vision (20%). But it stressed that the solution does not lie in a quick fix of any one business component.
“Seamless Circular Commerce will only be achieved through directional shifts across all areas of the company – from CMO and CIO,” the report said.