May 29th, 2018

Omnichannel Retail Success Means Using Data Like an Omnichannel Marketer

Take a deep breath. You’re currently in the eye of a “retail apocalypse” storm and possibly scrambling for a magic path out of the tumult. Exhale and focus on targeting and engaging with your high-impact audiences, those omnichannel shoppers who purchase across channels, from brick & mortar outlets to e-commerce sites.

This cohort comprises just 7% of all customers, yet is responsible for an estimated 27% of all retail sales. And the payoff for getting omnichannel customer engagement right is huge. Companies with effective omnichannel customer engagement strategies in place have been found to retain 89% of their customers on average, compared to 33% for companies with weaker omnichannel customer engagement.

As retailers realize omnichannel selling is crucial to thriving in a digital age, those customers have only become more important. How can you best engage them?

One key approach starts with the awareness that, to the omnichannel shopper, your “storefronts” — brick & mortar, digital, mobile app — are just a few of your many brand destinations. Along the path from one storefront to the next lies a whole host of other channels — such as your email blasts, catalog drops, digital advertising and call center, to name a few. Creating effective engagement across all those channels lies in an ongoing, seamless conversation from one channel to the next — in which your brand picks up and continues the conversation at every touch.

In other words, success with omnichannel customers requires retailers to think beyond the storefront alone — to go from omnichannel retailer to being a true omnichannel marketer.

Of course, data is the glue holding that cross-channel conversation together. Multichannel marketers need the right data to link interactions with a consumer across any channel — so they can understand where the “conversation” left off. To succeed as an omnichannel marketer, it’s essential to master customer identity data.

Today, we see retailers facing a number of hurdles to managing customer identity effectively. Read on to see if your brand faces those same hurdles — and to learn how you can change your data program to drive true omnichannel success.

Identity Goals, Omnichannel Marketing Challenges

Getting customer identity right takes a two-pronged approach to customer data. Brands need data that’s authoritative — connecting the disparate points of identity into a complete and accurate picture of customers and prospects. They also need data that’s near real-time, keeping up with customers as their identifiers change. Brands must spot when an email address, a browser cookie, a phone number, and a mobile device ad ID point to the same shopper. And they need to continue to recognize that shopper even as they change their email address, phone number, last name or physical address, or after their 30-day cookie expires.

Practically speaking, the need for authoritative data also means data must be consolidated. To enable a single view across all offline and digital channels and touch points, brands need a centralized and persistent identifier to the household and the individual.

Finally, data must be actionable across all channels — through both the brand’s own solutions and platforms and through data and activation partners.

There are a number of reasons why brands can’t achieve these four objectives — a few of which I’ll describe below. Do you recognize your own brand in these examples?

The Customers You Can’t See

For many brands, millions of customers are hidden in plain sight. It’s not necessary to identify a customer by name or other direct identifiers to understand who you are interacting with at any point in time.

Another factor is poor data hygiene. For instance, many brands manage customer identity data through an in-house or ad hoc householding approach — often deciding who lives in a household based on data that hasn’t been refreshed in months or longer. Given that 60% of identity data is outdated within two years, it’s no surprise how much identity data is incorrect and how many brands end up sending messages to the wrong physical or digital address.

Siloed Data

For many brands, different channels operate as independent groups, led by disconnected teams that run on disconnected systems. As a result, marketing and analytics leaders often have real trouble tying the information together to understand how all the marketing channels work together. Brands are unable to connect in-store purchase data with e-commerce activity, or traditional direct mail with email and/or online engagement. They’re also left struggling to connect data from loyalty programs, co-branded credit cards, and email lists. And, harder still, to coordinate customer data across multiple brands within the same retail group.

If your brand faces these challenges, you’re not alone. A 2017 CMO Council study found that just “6 percent of marketers believe they are able to get a complete view of their customer from all available data sources” and “only 3 percent of marketers believe they are totally connected and aligned across all systems, with data, metrics and insights flowing seamlessly across all technology platforms.”

Audience Overload

Many brands bucket shoppers into a dizzying array of segments — breaking them down by such categories as where they stand in the lifecycle (new, retained, reactivated) or in loyalty programs (often based on RFM — Recency, Frequency, Monetary), past behaviors, and custom-built psychographic categories. In theory, all these models enable incredibly precise targeting. In reality, they can be conflicting and hard to prioritize, and thus not relevant, or even possible, for the retailer to actually activate against.

Benefits Await

While brands face enormous challenges in getting the complete picture on customer identity, capturing that omnichannel identity has enormous benefits. With the right identity data, your brand can:

Make sure you are able to recognize loyalty members when you are interacting with them — knowledge you can use to incentivize them.

Know when to remove a promotional offer from a targeted email campaign — because you already know which customers are likely purchasers, with or without a discount.

Make use of digital data that might otherwise stay trapped behind online “walled gardens.”

Coordinate the timing and messaging of your marketing across channels to fit with how your audiences will likely encounter that media.

Follow up a browsing session online with a postcard or catalog relevant to that consumers’ expressed interest and intent.

Apply your knowledge of audiences that have already been receptive to direct mail, newspaper and TV ads — and find those same audiences on potentially more effective (or more cost-effective) online channels.

Piece together the complete customer journey — to show where your marketing has worked.

If your brand can make customer data usable across channels, great rewards await. But how do you get there?

7 Steps to Omnichannel Marketing

There are practical steps your organization can take to get on the right path — including the seven steps below:

1. Prioritize your objectives. You can’t do everything (at once). Determine the most critical and high impact steps you can take in the near term and then build a roadmap that is digestible for your organization.

2. Build a business case. Aligning customer data can be a resource-heavy, significant task for the whole company. To convince your leadership of the importance and reasonableness of the endeavor, put your plan in terms your CFO will cherish.

3. Identify your stakeholders. In the push to align customer data across the organization, it pays to clarify who plays what role and whose opinion matters. In fact, a recent Deloitte/Salesforce study finds that one hallmark of “elite performer” brands — where revenue has “increased more than 10 percent over the past fiscal year” — is “clearly defined roles and governance for managing consumer data and relations.”  

4. Identify your data gaps. Assess whether you have duplicate, stale or incomplete information and how significant those gaps are.

5. Create a unified architecture. Bring together all customer identity information, together with sales and marketing activity, into a single dataset — breaking down existing organizational silos and democratizing who gets access to generate insights. Be sure this architecture is big enough to encompass partners, too — linking owned customer data with 2nd and 3rd party data to enhance your customer identities, while integrating with activation platforms that help you reach customers and prospects across all channels.

When building this infrastructure, it’s critical to also incorporate Privacy by Design best practices. This will formalize the common-sense notion that privacy and security must be taken into consideration throughout the entire lifecycle of collecting and using consumer information. That’s true whether the data is personally identifiable or not and impacts everyone who works with that information. It can’t be an after-the-fact concern; it needs to be part of a process for interacting with data.  And given the potential for steep fines now that GDPR is in full force, losing public trust is but one of the high non-compliance stakes to consider.

6. Align on measurement. Remember, all this effort isn’t helpful if you’re unable to quantify and optimize your customers’ purchase journey. Achieving that measurement takes coordination across teams about what to measure, and how.

7. Re-think the org itself. To foster sustained omnichannel coordination, you’ll need to go beyond the data alone. You’ll need to create an organization that truly operates in sync. This includes asking hard questions about how your organization — and your marketing organization in particular — is structured. These questions include why you manage above the line and below the line marketing in different teams, or whether direct marketing truly requires a separate group from paid social and programmatic display.

Re-thinking the org also involves changing incentives for greater cross-channel cooperation — and better cross-channel data capture. For example, Gartner writes that “Williams-Sonoma store employees are rewarded for online purchases they initiate.”

Becoming a true omnichannel marketer is a brand journey that’s a marathon, not a sprint. If you can make the shift, you’ll be in a position to forge deeper relationships with some of the most valuable shoppers on any channel.

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