In Search of Customer-Centricity—Retailers’ Holy Grail
There’s a lot of buzz these days around the topic of customer-centricity. Customer-centricity is the "holy grail" for retailers—when retailers attain a higher level of consciousness and ultimate comprehension of customers’ needs and behaviors and organize their business practices and processes taking this into account to support a rich and rewarding customer experience.
One growing area of customer-centricity is personalization. Despite the down economy (or maybe because of it), retailers are investing heavily in this arena to deliver a customized experience that is relevant to a specific consumer preference and need. Personalization is becoming far more common on retailers’ web sites as merchants seek to bolster their bottom line with upsells and cross-sells, according to a report conducted by research firm,
The E-tailing Group Inc
., that was issued in July of this year.
found that 42% of merchants say they provide some personalization, 26% say their post-order e-mails are sent based on consumers' previous purchases, 25% say their site greets returning consumers by name and 18% say their site recommends products based on past customer purchases. And 34% of retailers surveyed said they planned to add personalization this year. Moreover, 52% of merchants say they plan to pursue personalization initiatives to improve their sites’ performance.
Personalization doesn’t just live and breathe online. Case in point: Kohl’s sends me flyers and promotional offers—along with several of my family members who all live under the same roof. This has provided an interesting case study on how one retailer is personalizing its direct mail offers to cater to the buying behaviors and preferences of myself and my family members. The flyers I receive are focused on shoes and accessories (ok, they’ve definitely got me pegged!). My sister-in-law receives mailers oriented at women’s clothing, and my brother receives mailers promoting men’s clothing. Kohl’s also knows who in my family shops all the time, as opposed to those who only shop at certain times of the year, and I’ve noticed the discounts and incentives are geared as such – the richer offers are sent to those more frequent shoppers (my sister-in-law), while us ”every so often” shoppers receive lower discounts. What they don’t realize is if they sent the richer discount to me, they may see me more often and if they sent a lesser one to my sister-in-law, they would still see her as often!
Many retailers are far behind Kohl’s when it comes to customer profiling and personalization of offers. When it comes to customer-centricity, retailers need to assess what information they have at their fingertips and how they can then leverage that information to drive the organization to be more customer-centric. But what if you don’t have the information you need to even get started on the path to customer-centricity?
These topics and more will be discussed during our upcoming webinar on customer-centricity. Join me and RIS News along with Sahir Anand, Vice President and Principal Analyst at Aberdeen Group, on Thursday, Dec. 16th, for a discussion on “Driving Profit through Customer-centricity: Lessons from 2010 and Strategies for the Year Ahead.” We’ll review the customer-centric strategies and solutions that worked best in 2010, and which ones offer the most promise for the years ahead.
Posted by Diane Cerulli, Director, Product Management - Epicor