We’re in a Retail Renaissance and Focusing on Data Is What Separates the Winners From the Losers

New survey finds data is key to enhancing the customer experience

Data-fueled experiences are essential to keeping customers happy, a new survey found. - Credit by Getty Images
Headshot of Lisa Lacy

Despite reports of hard times in retail, which most recently included the death of Toys R Us, a new report from Salesforce and Deloitte says we’re actually in the midst of a retail renaissance, which means retailers and brands alike need to focus on the customer experience to win over shoppers.

In a survey of 550 representatives from traditional retail, consumer goods and branded manufacturing firms, Salesforce found participants maintain an average of 39 front-end systems to manage consumer engagement points like point-of-sale, mobile, call center, ecommerce, email marketing, social and content management.

As a result, Salesforce said the consumer experience—especially at the top of the funnel—is extremely disjointed. Instead, so-called elite performers, or brands with a revenue increase of at least 10 percent in the last fiscal year, focus on data at nearly double the rate of underperformers in all areas on average—including continuously gathering information on consumer expectations, trends and feedback.

Rick Kenney, head of consumer insights at Salesforce Commerce Cloud, pointed to menswear retailer Suitsupply and its subscription service Box Office, which uses prior browsing and purchase activity to inform what to send, as an example of a brand harnessing consumer data to enhance the experience in a valuable way.

And, thanks in part to this disjointed ecosystem, Salesforce said unified commerce initiatives have become more important in the past few years and two-thirds of brands are leaning toward this type of consolidated platform.

In addition, the report found brands plan to employ nearly 50 percent more data scientists over the next three years, but, Salesforce said, they will need infrastructure and processes in place to support these data scientists—and their first order of business should instead be prioritizing data access and actionability.

Under-performers also lag when it comes to tapping into AI. On average, just over one-third of brand leaders have adopted AI, with more popular applications in tailored pricing and promotions and relevant search results. Per Salesforce, AI areas to watch include enabling visual search based on images and using voice recognition.

According to Kenney, brands who are performing well are also starting to adopt tactics like onsite personalization.

“Shoppers that engage with personalization only encompass 7 percent of all visits, but those shoppers are driving 26 percent of all the revenue,” Kenney said. “The impact of personalization is absolutely outsized.”

And, brands that want to succeed need to grow the share of shoppers who engage with recommendations, which means not burying personalized content at the bottom of product detail pages and/or forcing shoppers to find it themselves, Kenney said. He pointed to active apparel brand Jack Wolfskin and its personalized on-site search results as a good example.

Brands can also better compete with players like Amazon and Walmart by focusing on service and convenience and choosing collaborations that help them better tell their stories, like Target’s upcoming partnership with Hunter Boots.

What’s more, the study found brands are missing an opportunity to attract and sustain customers by not focusing enough on values and emotional connections.

Kenney said there’s a rise—especially among millennials and Gen Z—to feel connected to a brand, as well as an expectation that brands stand for something, like Lush Cosmetics’ Charity Pot program, which supports small grassroots organizations, or REI’s #OptOutside campaign, which encourages consumers to go outdoors instead of shopping on Black Friday.

“If you have values and stand for something, consumers will follow you as well,” Kenney said. “You have to stand for something or you will fall for anything.”

@lisalacy lisa.lacy@adweek.com Lisa Lacy is a senior writer at Adweek, where she focuses on retail and the growing reach of Amazon.
Publish date: March 19, 2018 https://dev.adweek.com/digital/were-in-a-retail-renaissance-and-focusing-on-data-is-what-separates-the-winners-from-the-losers/ © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT