BetterManagement Live hosts a panel that looks at shopper segmentation and predicting consumer needs as drivers of future loyalty gains.
Posted Oct 28, 2005
Retail industry panelists at SAS Institute's BetterManagement Live conference in Las Vegas on Thursday gave a glimpse into how emerging technologies and strategic changes can enable customer centricity now and in the future. Retailers are strategically deploying technological advancements in their businesses from revenue optimization to in-store kiosks; in the end the beneficiaries must be the shoppers if those companies want to gain customers for life.
"What's exciting in customer-centric planning is enriching traditional business plans with customer plans and switching the spotlight to a customer-driven organization," said moderator Pamela Massenbury, customer-inspired merchandising chair of Ogden Associates. "It's a buyer's market, so we must continue to deliver a superior experience to convert passive customers into loyal brand evangelists."
She asked other panelists how the retail industry can create a stellar experience. Some said market consolidation like Oracle's purchase of Retek and ProfitLogic may help enhance integration, but the first and most obvious answer was, have the right merchandise in the store. When a store doesn't have the right size or color, the customer is likely to go somewhere else. While various assortment-planning tools exist, companies can start with simple in-store kiosks, Ken Brame, CIO of AutoZone, suggested. "People are used to going online and doing research before coming into the store, but we don't have kiosks in the store to give them choices," he said.
That same online research connects to another important issue--fair pricing. The same store in different parts of the country might charge different prices for the same product and when customers start looking online, they get suspicious. "If that's not consistent, people think you're ripping them off," said Eric Williams, executive vice president and CIO of Catalina Marketing. Technology can come to the rescue again by recognizing what zip code the online shopper lives in and targeting them appropriately.
Breaking customers down into targeted, meaningful groups--from where they live, to what they buy, or how they like to shop--is the wave of the future. John Moore, senior vice president and CIO of TOO Brands, formerly worked at Best Buy, where recognizing this customer-focused trend helped the bottom line. "We made a large shift as a company, going from product-focused to customer-focused," he said. The company recognized it couldn't compete with big-box retail giants like Wal-Mart when it came to price, so it decided to use its rich customer database to make the customer experience be the differentiator. Best Buy created personas based on the way people buy, designed specific marketing programs for those segments, and even redesigned stores. As a result, the company saw an increase in revenues and margins, having arming merchants and associates with the ability to run each store the way they felt fit, instead of working from a one-size-fits-all approach.
A company can't force customers to change their in-store behavior, but it can try to focus on the right product mix by store and by customer using the appropriate technology. For example, if a store is thinking about discontinuing a product it can see what percentage of its high-value customers buy that product and if the number is high enough, it won't discontinue it because those customers might get frustrated and start shopping elsewhere.
The power of being the first to get a product in a customer's hands is endless. "If I can predict you'll be interested and I can give you an incentive to try it, it's a win-win," Williams said. "That kind of information will change the entire landscape in the retail industry over the next five years."
Retail Companies Gain Respect for Consumers
Internet Research Drives In-store Sales
Oracle Acquires ProfitLogic
The takeover gives the world's largest database software maker a shot at being the leader in the retail market space.
Sponsored By: Jacada, Avaya, Confirmit, inMoment and BoldChat
Sponsored By: Genesys, Avaya, Verint, and Aspect
Sponsored By: Informatica
Sponsored By: Verint®, Confirmit and inContact