Omnichannel Urgency: Retail at the Customer Experience Tipping Point

By Bob Elliott, managing director, SAP Canada

This is today’s retail reality:Bob Elliott

  • 79% of consumers spend at least 50% of total shopping time researching products online
  • 82% of consumers will substitute and switch brands due to an out-of-stock product
  • 59% of consumers are willing to try a new brand to get better customer service

A vast majority of all purchases begin online. The expectations have never been higher for retailers to deliver shopping experiences through their website, a mobile app or their social networks.  Although the brick-and-mortar store still accounts for most purchases, the beginning of the transaction starts elsewhere.

Innovative retailers are dramatically changing their business model to stay ahead by shifting their storefronts to the digital world. They’re building apps, integrating social media and ensuring a complete omni-channel experience for the customer at every touch point.

Being visible and available to your customer through every channel is highly important for competitive retailers, but how do you retain your customer? What can you do to stop them using another brand or service that’s equally available? The most competitive brands are turning to loyalty management strategies to create a consistent customer experience that provides incentives, and rewards customers for their loyalty.

The beauty of a rewards program is that they entice consumers to repeat their shopping experience. The benefit to retailers is that these programs are often more effective in increasing revenue over the long run than one-time price promotions and can help move stock that might otherwise sit on the shelves.

A smart loyalty program, backed up with high end software, allows you to gather all the information you need from your customer to provide them with personalized, tailored offers to keep them loyal to your brand. Combine real-time personalized promotions with the weight of your shoppers’ point-of-sale transaction history, and we’re talking about a serious market advantage. Your shoppers’ transaction history (easily recorded and assigned to a loyalty account) contains every scrap of detail you can imagine, including:

  • The time, date, location, and frequency of store visit
  • The size and value of each visit
  • The value and frequency of coupon usage
  • The individual items purchased (brand name versus store brand)

With the power of technology like SAP HANA, this data could be loaded and accessed today, in real-time, to trigger personalized promotions through smart phones. Imagine walking into a grocery store to stock up on your weekly staples. As soon as you pick up a carton of eggs, your smartphone chimes as you pass a digital marketing sensor. You check your phone and find out that your favorite brand of breakfast sausages are 50 cents off for the next hour – what luck! Of course, there’s no luck involved whatsoever.

The in-memory analytics engine studied your transaction history, identified a product related to eggs for which you have an existing affinity, and priced it just right to entice you to purchase a high-markup item you didn’t plan on buying. This all happened without human intervention in a fraction of a second. Scale this model to several interaction points throughout your stores, and you begin to see the impact precision retailing can have on your top line.

Juniper Research forecasts retail payment values on NFC-capable smartphones upwards of $180 billion globally by 2017. Mobile spending in general will reach $1.3 trillion globally and account for 35 percent of the technology economy by 2016, according to Forrester Research. Retailers of all shapes, sizes, and markets will be investing in ways to own a piece of this pie. It’s not a question of if but when.

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