A FASHION BRAND S GUIDE TO BUILDING CONSUMER INTIMACY IN THE DIGITAL AGE

Transcription

1 A FASHION BRAND S GUIDE TO BUILDING CONSUMER INTIMACY IN THE DIGITAL AGE Liked by 200K people RECOMMENDED PRODUCT Based on Purchase History WHITE PAPER

2 Introduction You have to be totally connected with everyone that touches your brand. If you don t do that, I don t know what your business model is in five years. - Angela Ahrendts, Former CEO of Burberry & Current SVP, Retail and Online Stores at Apple Given the context of today s retail industry, it is clear that a customer-obsessed business model has become the new frontier. But achieving this objective is not so simple. Why? Because consumer intimacy is not merely a one-dimensional approach of monitoring the customer across channels, or about communicating through new platforms. It is about managing the entire customer relationship across all channels in real-time to achieve a true connection - one that fosters loyalty, advocacy and continuous engagement. This guide shows fashion businesses how to meet these objectives by leveraging complete visibility of customer interactions across all touchpoints to get closer to the consumer and achieve a competitive edge in today s ever-complex omni-channel landscape.

3 The New Retail Battleground Today s hyper-connected, empowered consumer continues to take the lead in defining the retail experience. With rapid access to pricing and product information, they switch between retailers at will rewarding only those who are able to deliver personalized, immersive shopping experiences. Today s consumer wants brands to: Unfortunately, most retail organizations lack the holistic view of their customers to fully understand and react to customers needs - resulting in missed opportunities to forge better relationships with them. Decision-makers are impeded by barriers such as customer data silos, poor data quality and misaligned business strategies - preventing them from developing a comprehensive view of each customer. This thwarts any effort to deliver the right experience to the right person at the right time. The outcome a disjointed customer experience. Executives seeking to build highly unified and unique customer experiences are left immobilized as a result, requiring a fast and innovative platform that can engineer exceptional consumer intimacy moments in real time - not only on the path to purchase but also throughout the longer arc of a customer/brand relationship. When carefully coordinated and synchronized, these moments help drive brand preference and cultivate brand advocates in a time of otherwise diminishing customer loyalty. To better meet the demands of increasingly discriminating consumers and develop more effective strategies, we ve outlined 5 factors that fashion retailers should consider when evaluating their consumer intimacy strategy in the digital era. Understand their preferences Provide mobile deals Give them a reason to shop in-store Let them shop the way they want Make a personal connection 3

4 What the C-Suite Should Expect Consumer Intimacy Improves Strategic Planning Across the C-Suite Chief Executive Officer Enhances better decision-making by leveraging accurate data to analyze business performance and help set an effective business agenda Chief Product Designer Empowers ability to predict demand and new trends when designing and pricing new product offerings Chief Marketing Officer Heightens ability to predict the right offer for the right customer at the right time, while simultaneously preventing churn Drives Advocacy Consumer Intimacy Builds Loyalty Chief Information Officer Boosts capabilities in providing a better customer experience by leveraging actionable intelligence to shape business strategies, improve product planning and optimize customer-facing processes Improves Customer Retention Chief Supply Chain Officer Improves alignment of resources and global supply chain partners by predicting and dynamically responding to changes in consumer demand and significantly reducing out-of-stocks and markdowns. A customer who is fully engaged represents an average 23% premium in terms of share of wallet, profitability, revenue, and relationship growth compared with the average customer. - Gallup Research 4

5 Five Essential Steps for a Successful Consumer Intimacy Strategy 1. A Single view of the Customer In an increasingly competitive market, retailers need to differentiate themselves through the quality of the customer experience they deliver. However, this means knowing their customers better and having the right information at their fingertips. A single view of the customer represents an evolution in the way businesses approach customer engagement. In today s competitive retail environment, this consolidation of critical data about customers becomes a competitive differentiator as incomplete and inaccurate customer information costs retailers in lost opportunities. Most large organizations spend significant time building CRM systems, but only a few achieve the elusive single customer view. Attaining it, however, helps retailers analyze and monitor individual customers at a granular level, rather than in discrete channel views. When this information is held in a cross-channel CRM or data hub, this single view can be utilized to develop powerful one-to-one programs and highly personalized one-to-one interactions that provides individual value to your customers. This results in increased customer lifecycle value, satisfaction and loyalty. In our work with fashion brands, we ve identified that aggregating customer data into a single repository helps brands understand the entire customer story; since data captured in silos paints an incomplete picture and becomes potentially misleading. Insights derived from such a repository greatly enhances a retailer s ability to make better decisions across different areas of the business including marketing, merchandising, store operations and customer service. Rachel 5

6 Case Study How Brooks Brothers is Building its Omni-channel World of Fashion Leveraging SAP CRM and Customer Activity Repository (CAR) The Brooks Brothers vision was to create a 360 degree view of the customer - enabling the brand to know and respond to its customers in real-time with a highly personalized approach. By implementing SAP CRM with SAP Customer Activity as the master database, the brand was able to process large volumes of data from multiple customer touch-points including in-store, phone orders and ecommerce to gain a true omni-channel view of their customers. CRM In-Store Call Center View the Case Study ecommerce 6 Customer

7 2. Personalization The new consumer expects interactions to be real-time, highly personalized, and tailored to buying preferences, transaction history, and user behaviors. Given the current state of retail, data-driven insights must be operationalized and embedded in applications for an enterprise to achieve a winning strategy. Through the consolidation of customer interactions across a brand s multiple channels, fashion companies have a tremendous opportunity to convert data into valuable insights - and ultimately drive exceptional personalization strategies. For all the challenges it presents in execution, deciphering this information holds great impact to a retailer s bottom line arming executives with insights crucial to making better decisions regarding how best to position or market their products to meet individual customer needs. Personalized Interactions = Engaged, Active and Loyal Customers Consumers are by nature curious, fickle and transient in their interests and motivations, which makes it difficult to create a one-size-fits-all strategy. Personalization helps retailers avoid the perils of broad assumptions to tailor shopping experiences to individual likes and current interests - allowing consumers to shop more efficiently and even learn about offers they might otherwise miss. This helps retailers optimize and build a more informative and productive shopping experience in a way that attracts more traffic to stores and websites. Recentering the organization to create consistently engaging experiences that go well beyond a single campaign, channel or experience snowballs into a positive customer experience, which ultimately creates an engaged consumer. Over time, as consumers accumulate more and more positive experiences with both the product and the brand, the relationship deepens resulting in loyal customers and advocates of the brand. The higher the quality of a company s customer experience, the more customers who purchase again, don t switch to competitors, and recommend the company. - Forrester Research 7

8 Activating the Consumer s Journey to Steer Growth Rachel s Story 28, Lives in California, Single, High Income, Fashion Focused, Tech Savvy, Heavy Online Shopper sent out: Free shipping on all online-purchases Wish List Past Purchase History Identified as an Elite Member Personalized offer based on information from customer intelligence engine Rachel s Social Media Profile Frequency of in-store visits in the past month 40% discount on all items on wishlist within the next month Rachel is happy, and becomes a repeat customer! 8

9 3. Real-time Contextual Insights Most customers today deviate from a linear buying path, starting their shopping experience in one channel (e.g., social or ecommerce site), researching products using mobile devices, then visiting a store. But rather than a seamless experience that reflects the shopper s history with the retailer, customers often encounter an irritating loss of context and friction as they move from one channel to another. Personalization recognition of the customer individually, making suggestions about what he or she might like is a big factor in deepening engagements. However, it is the context and relevance that creates the distinction in memorable customer experiences. A real-time personalized message, for example, might address a shopper by name or suggest some new assortments related to the user s buying patterns. Yet none of that is relevant if the shopper is actively looking for summer clothing at the time. Context - the cumulative story that is derived from data observations about customers gives meaning to data. There is a dramatic and corresponding change in the use of context as deep situational understanding can help drive well-informed decisions. Organizations can derive trends, patterns, and relationships from unstructured and related structured data to discover new opportunities. Taking such an approach will allow retailers to focus their resources on data collection and analysis and concentrate efforts on engaging consumers with the right messages at the right times. In today s retail environment, such situational awareness is essential in creating a better customer experience as retailers are able to increase the value to the consumer throughout the shopping journey. Contextual engagement requires: Real-time listening across multichannel touch points Flexible data collection that accommodates new information gleaned from constantly changing customer behavior Intuitive, visual representation of data for easy analysis Dynamic modification to campaigns based on the flow of consumer activity throughout customers unique buying journeys 9

10 Contextual Engagement in Action Wish List COUPON New Arrival A customer browses a retailer s site and adds items to her wishlist. The associate identifies the customer and pulls up her profile on a clienteling app. The associate sees that the customer recently added a pair of shoes to her wishlist. The same pair of shoes is currently in stock and is available in her size. A personalized offer is generated - offering 25% off on the pair of shoes. Two days later, she walks into the retailer s store. 10

11 4. Customer-centric Pricing Today s tech-savvy customers are actively comparing prices in-store, online and on the go. Armed with multiple devices and constantly on the lookout for the best deal, they are increasingly price aware, price sensitive and even price influencers. To compete, retailers must offer the right price at the right time - which requires unlocking customer data often trapped in siloed enterprise systems. A personalized pricing strategy uses automation to help retailers increase their price responsiveness to react more swiftly to supply and demand, consumer behaviors and other market shifts in near real time. This approach can take into account complex variables such time of day, demand, price elasticity, competitor prices and more. Coupling all this information with the data trails generated by online consumers helps retailers size up each customer to set different prices for different customers. Based on such data, it s possible for retailers to predict what products a consumer is interested in buying, when they are likely to buy them and, critically, the price they would be willing to pay. Take Rachel for example. She is a regular shopper - having made over 6 visits to the store over the past 3 months and purchased more than15 items. By extracting data from purchases she s made in-store and on-line, and identifying the frequency of trips she s made to the store on a monthly basis, the retailer categorizes her as an elite member. The next time she shops, the retailer employs a pull based strategy to generate a personalized price. Since Rachel is identified as a loyal customer, the probability of her receiving a better price in comparison to another customer is higher. But that s just a small sample of the many variables retailers use to set prices. The words entered into a search engine in particular has a huge influence. For e.g., if a retailer knows a consumer searched for size 6 women s shoes, the retailer can target that consumer with a $10 discount or go upto 20% if the consumer registers as a member. Using a behavioral-based platform that takes into consideration the Customer Journey, Social Data, Past Purchase History and Inventory Availability, fashion brands are able to adapt to market dynamics and develop more compelling offers and pricing to increase sales. This leads to an increase in customer lifetime value, boost in customer conversion & retention rates, which in turn increases revenue. 11

12 5. Sentiment Analysis As consumers continuously generate real-time data through social channels, the instantaneous and public nature of social data gives businesses an opportunity to create equally fast-moving strategies to exceed customer expectations. The digital universe will grow, as will the ability to interpret what is today seemingly uninterpretable. In doing so, Social Analytics - monitoring and interpreting customer sentiment and activity - has become a powerful tool; not just for building stronger relationships with customers, but also as a compelling way of deciphering data to predict future trends. As consumers increasingly rely on social media, data collected will feed into powerful algorithmic tools that, over time, will monitor and learn consumers response to defined situations and offers. These insights enable retailers to develop a more comprehensive view of a customer and meet perpetually shifting consumer demands more effectively. Preferences around a particular product can be easily matched to social data to answer questions like What do females in the age group think of product x? and How did the response change after the launch of our new video campaign? Given that this data is public, fashion retailers are now in a better position to segment consumer types, which in turn can be leveraged to customize store layouts and assortments for specific regions. Similarly, manufacturers can harness open data in the form of social media chatter or likes to improve after-sale interactions with consumers and make informed product design and development decisions. Value of Sentiment Analysis Heightened knowledge: Fast and accurate insight to optimize marketing campaigns, enhance customer relationships, build brand advocacy and amplify loyalty. Anticipate and influence behavior: Pinpoint trends in the collective behavior of consumers in a particular region Predict business outcomes: Reduce the guesswork and make informed decisions based on tangible data to evaluate the best return across customer service, and sales and marketing. 12

13 The Business Impact of Consumer Intimacy $83 Billion estimated loss due to poor customer service in US 1 10% improvement in a company's customer experience can translate into more than $1 billion in increased revenue and other benefits. 1 70% of buying experiences are based on how the customer feels they are being treated 4 43% increase in total stock returns was enjoyed by Customer Experience Leaders over the last 5 years vs. 34% loss for Customer Experience Laggards. 5 Highly engaged consumers 2 : buy 90% more frequently spend 60% more in each transaction 5x more likely to choose brand for future purchase By 2020, customer experience will overtake price and product as the key brand differentiator 3 70% 59% of consumers are willing to spend an average of 13% more with companies that provide excellent customer service. 1 of U.S consumers would try a new brand for a better service experience. 1 1 Parature - INFORGRAPHIC: The Financial Impact of Customer Service 2 Rosetta - Customer Engagement from the Consumers Perspective 3 Walker - Customers 2020: The Future of B2B Customer Experience 4 McKinsey - The Moment of Truth in Customer Service 5 Forrester Research - Customer Experience Index 13

14 How attune Can Help Fashion Brands Drive Consumer Intimacy At attune, we work exclusively with Fashion & Lifestyle companies; helping brands deliver superior customer experiences in the digital age. Schedule an Assessment Real-time Consumer and Retail Analytics Utilizing technologies such as SAP Customer Activity Repository (powered by SAP HANA ), we help fashion brands gain a 360 O view of their customers and a real-time view of inventory across all channels. Consumer Engagement Leveraging predictive, contextual insights, we help fashion retail companies deliver a personalized shopping experience to its customers through a suite of clienteling solutions. Omni-channel Fashion Through a vertically integrated operational platform such as SAP Fashion Management, we help fashion companies deliver a superior, consistent customer experience across multiple channels. 14

15 Conclusion The rise of omni-channel has permanently altered the course of customer relationships and placed a renewed focus on the customer experience. This emphasis has grown to the point where it practically overshadows the products themselves. Amidst this painful reality of highly disruptive trends, competition from online pure plays, pressure from shrinking margins, and eroding customer loyalty severely underscores a retailer s ability to compete - leaving traditional approaches obsolete. Fortunately, today s technologies, processes and customer engagement tools have all advanced, contributing to the evolution of customer-intimate business strategies. Brands that set themselves apart with the aim of building real relationships by committing to customer-centric principles will be better equipped to expand their market share and see their bottom line soar. In our experience with global fashion brands, we believe retailers need to look at the customer more holistically across all interactions and across the purchase cycle to better shape the customer journey and drive brand loyalty. It all lies in retailers getting past the idea of simply servicing customers and instead, start focussing their efforts on getting closer to customers by creating the experiences that they want. Consumer Intimacy Helps: 1. Drive improvements along the entire value chain by acting on customer insight 2. Acquire and nurture new customers by uncovering customer attitudes and behaviors 3. Deepen customer relationships based on a better understanding of interests 4. Improve customer lifecycle with an accurate retention strategy 5. Improve decision making across merchandising and product placement, by delivering products customers want 15

16 Our Services Consulting Services Delivering proven consulting on business technology for Fashion and Lifestyle companies Technology Services Providing solutions and accelerators built on deep industry expertise covering Mobility, HANA, Cloud, ERP, Big Data and Analytics Business Transformation Services Aligning stakeholder engagement, organizational readiness and business models to embrace technology adoption and ensure smooth transition For more information, visit /company/attune /user/attuneconsulting Managed Services Managing technology investments with proven methodologies and specialized knowledge About Us attune is a team of trusted business technology advisors who work with fashion and lifestyle brands to transform their business performance. attune offers services across the fashion and lifestyle value chain, developing solutions that maximize competitive advantage, integrate and transform activities across people, processes and technology. Copyright 2015 attune Lanka (Private) Limited. All rights reserved. 16