Retail’s data dilemma: Focusing performance and CRM efforts to maximize sales
An Executive Analysis of our Leadership Study
In response to the shifting landscape of buying habits and the growing need for profitability, our research has revealed three powerful strategies that marketing teams can employ to elevate their customer relationship efforts and maximize sales.
of shoppers left unidentified by brands during the 2022 Black Friday and Cyber Monday
increase in shopper conversions by Steve Madden behind predictive models
Retail has always been an industry characterized by long-term vision and daily impact. This is becoming even more prevalent as we encounter an industry-wide dilemma where retailers find themselves immersed in an overwhelming ocean of customer data but extracting its value remains a formidable challenge. What we’re witnessing across our industry is akin to possessing a treasure trove but lacking the necessary map to unveil its hidden gems.
Bluecore partnered with CommerceNext to conduct a comprehensive survey of over 100 digital marketing and e-commerce retailer leaders, spanning thirteen different industries. Our aim was to gain a deeper understanding of the current state of the retail industry and its inherent challenges with their retail data.
The pressing question that confronts us all is how we can effectively navigate these expansive data landscapes, especially in a challenging environment where retailers are under immense pressure to deliver on YoY comps. Retailers lack the agility to leverage customer data in real time, hampering their ability to create personalized and relevant experiences for their customers that drive conversions. And the bridge to cross this gap is especially challenging due to constraints in technology and talent.
Given these constraints, our findings provide insights on the most important areas to focus your marketing efforts, namely, retail data activation, personalization through identification and predictive intelligence, and the accurate analysis of the return on investment (ROI) of a customer-centric data strategy to drive bottom-line growth.
Unlock team agility: Focus on actioning data
With shoppers dedicating less than 3% of their day to the market, capturing their attention in that small window has become increasingly challenging, as today’s touchpoints are costly real estate, particularly amid other direct competition.
Retailers understand that superior customer experiences have a direct impact on the bottom line of the business and there is inherent value in leveraging customer data to enhance those experiences but a lack of agility stands in the way of effectively utilizing it, and this shows up in the findings.
Our survey results show an overall satisfaction grade of only 54% among respondents in regards to actioning customer data for new shopper experiences. This is coupled with the finding that a mere 4% have established processes for regular and dynamic rule updates to improve personalization of those experiences, indicating a prevailing ‘set it and forget it‘ strategy within organizations.
Finally, while 89% of retailers leverage behavior data in these experiences, less than half (43%) leverage product data like price and stock status, which are critical data points to create relevance for the customer. These findings validate why many retailers are often stuck sending delayed and broad-based, batch messaging that leaves revenue on the table and customers disengaged.
Retail organizations need to invest in capabilities that democratize access to customer, behavior, and product data in a way that gives marketing teams the flexibility to act on those signals. This heightened level of agility gives marketers more control over launching campaigns and experiences that capture conversion opportunities when shoppers are in-market, leaving room for them to test and learn into improvements in personalization and overall customer engagement.
Fiona Tan, CTO, Wayfair"The challenge with data is not collecting it, it's analyzing it and turning it into actionable insights."
Revitalizing personalization: Concentrate on identification and predictive intelligence
The agility with which you can action on data to respond to shoppers when they’re in market goes hand-in-hand with identifying who each shopper is and communicating a relevant, personalized message. In that way, being able to identify as many shoppers as possible to expand your campaign reach; having the capability to personalize in anticipation of the shopper, is critical to converting and retaining customers, but brands are underutilizing both.
Currently, only 46% of marketers are focused on identity capture, with 74% of shoppers left unidentified by brands during the 2022 BFCM (Black Friday and Cyber Monday) period. In addition, predictive scoring is not widely used with respect to targeting (only 25%) which limits the level of personalization.
More tangibly, focusing on identifying as much traffic as possible coming to your site increases campaign reach, and having actionable predictive intelligence will give you the ability to communicate with customers based on their individual preferences for categories, discounts, and even channels, which increases campaign engagement and repeat purchases.
Retailers like Steve Madden are leaning into these areas to enhance their communications in a way that is keeping their shoppers coming back. By putting data at their marketing team’s fingertips with push-button predictive models available in their campaigns, specifically category affinity and next-best purchase models, Steve Madden has seen a 37% increase in conversions, a 22% rise in repeat purchases, and an impressive 87.5% reduction in production time.
Set up for P&L success: Measure the ROI from customer data
Overcoming data challenges requires adequate resources, however, obtaining those resources can be challenging when data hasn’t demonstrated tangible ROI. This chicken and egg problem is exacerbated by the cost-cutting measures and limited bandwidth of the current environment where every marketing dollar spent is precious.
Retailers surveyed only had a 48% satisfaction score with their organization’s ability to measure the effectiveness of marketing investment in customer retention, purchase frequency, and lifetime value, citing a lack of talent and resources to understand customer data’s impact on marketing effectiveness.
With the acquisition and retention of data science talent continuing to be a roadblock, aligning with your finance counterparts on acceptable returns for key programs and investing in technology that proves out ROI today, is becoming increasingly important to inform future investment priorities and provide scale once those resources become available.
