Many pundits take a gloomy outlook on the future of Australia’s existing retail players, but I believe many can innovate their way back into the black. With the exploding availability of consumer data, Australian retail marketers now have an unprecedented opportunity to understand their customers’ likes and dislikes. Big data will form the basis of the transformations that will carry the strongest of the local brands forward. The effective use of data will play a huge role in who survives the next 5 years.
News of Australian retailers like Marcs and David Lawrence entering administration in February probably won’t come as a surprise to industry insiders. As a swath of big international brands continue to arrive, they’re placing increased stress on established local players. But if you’re thinking consumers are sad to see brands disappearing, you might want to think again. A recent study by Havas found consumers wouldn’t care if 74% of brands died altogether. The CEO of Havas Group called it a ‘wake up call’, and rightly so.
Status as a ‘local hero’ doesn’t really cut it anymore, and competitive products and prices aren’t always enough to win people over in an era where customers own sense of self is more defined than ever before. Brands that don’t use data as the platform to transform their business around their customer needs and wants, will continue to see match-fit internationals eat their lunch.
There is no going back to the cosy closed markets of decades past. H&M, Zara, TopShop, Uniqlo and Sephora are here to stay. T.K. Maxx will arrive this April with 35 stores planned. Amazon is around the corner. Who knows what comes after that.
Many of these international brands arrive with sophisticated offerings like:
- Heavyweight ecommerce platforms
- Omni-channel customer experiences
- Better economies of scale
- Better value for money
Central to all of these brands is a reliance on customer data to help understand and cater for customer wants and needs.
So what are some things retail marketers can start doing to help make their data work for them? How can they pivot their business towards a customer-centric view that is more likely to ensure they remain competitive.
1. Measuring participation
Take some time to analyse the level of participation you’re seeing from your customers. Are they part of any loyalty programmes you’re running? And if so, are they redeeming points or allowing them to expire? Are they using the vouchers or discount codes that you’ve sent them, and are they taking part in the special offers you’re making available to them? Use the data you have available to you to find out which customers are not participating, and get the ball rolling by sending them an offer that’s simply too good to refuse.
2. Personalising communications
Look back over the data you’ve collected so far and consider which elements you could use to better personalise your communications. Build intimacy by offering your customers a stronger value exchange and proving to them that you are not using their data for self-serving reasons.
3. Creating a single customer view
Research shows that 59% of Australian respondents in recent ICLP research said they’d shop with their favourite brand more frequently if the retailer understood their individual needs and preferences better.* . And this doesn’t only include purchases online. Empower your employees by making data on preferences and past purchases (whether made online or in person) available to sales assistants in order to help them enhance customer experiences and connect with customers on an individual level.
4. Understanding pain points
Use what you already know about customers to identify potential problems, and then offer them solutions that enhance their shopping experiences and encourage repeat purchases. For example, if you know that customers are getting items delivered to their workplace, make their lives easier by offering them home delivery in the evening at no additional cost.
5. Creating unexpected experiences
Use your data to understand the value of your customers and segment them accordingly. This will allow you to provide different levels of experience-based rewards – all of which will take things out of the transactional and towards surprise and delight.
6. Listening to the conversation
Many retailers make the mistake of thinking that the only data available to them is the data that they’ve collected directly from customers. In reality, there is a wealth of information to be mined from various social media and review sites. As online and social channels increasingly become a forum for customer service and interaction, being a relevant part of the conversation helps to build passion and intimacy. Use the information available on social media not just to resolve issues, but to identify and reward the individuals who are acting as advocates for your brand by engaging in activities such as brand tagging. Demonstrate that you’re listening to your customers.
Australia’s retail marketers are at a cross-roads: Embrace digital transformation and customer data insights into the core of their business, or face an uncertain future competing with international retailers who have. Personally, I think we’re entering an era where Australian brands will embrace data and innovate their way into enduring success.
By ICLP and Collison Group GM Simon Morgan