In the current retail environment of tight margins, complex supply chains and intricate market infrastructure, delivering a good customer experience is more important than ever. It is well known that it is more cost-effective to retain a customer than to acquire a new one, and creating a superior customer experience will help improve loyalty and stickiness leading to long term profitability for the company.
To improve the customer experience one must first understand the customer. To know your customer today, there is opportunity like never before. There is a mind boggling amount of customer data out there waiting to be deciphered. Analytics is the safety ring that rescues a retailer who is drowning in a sea of data and puts it squarely in the boat of customer understanding, thereby helping the retailer navigate the sea of data successfully.
How can Analytics improve customer experience?
Analytics give retailers insights into the customer's current and future purchasing behavior. Recently, a leading US retailer was in the news for using analytics to identify pregnant women from changes in their buying behavior and marketing to them proactively. Similarly, by analyzing data, retailers may be able to identify households with school-going children, and target specific sales campaigns to these households during the beginning of the school year.
Analytics help retailers identify, define and align offerings to customer demands. By analyzing the patterns of customer purchases, the retailer can drive greater sales by aligning product offers to customer shopping habits to optimize targeted marketing programs.
By applying analytics across all channels, retailers can target shoppers with personalized offers that improve brand equity and customer loyalty. Understanding what customers truly want and need can help retailers ensure that the right assortment of products is in stock when and where they want to purchase them. Retailers will also be able to identify:
- Which customers are most likely to respond to certain promotions?
- What impact do loyalty programs have on customers' behavior?
- Which new products should be introduced and where should they be sold?
In today's omni-channel environment, retailers can pinpoint which channels are outperforming the rest and which are underperforming, thereby crafting their promotion and marketing strategies to optimize these channels. In addition, analytics provides an overview of the entire supply chain, and hence overstock and out-of-stock issues can be avoided.
In short, analytics help the retailer maximize the opportunities from every interaction the customer has with the company throughout the duration of the relationship, from sales to delivery to customer support. This creates a win-win situation for both the customer and the retailer, leading to a happy and satisfied customer, and long term profitability for the retailer.