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Best Practices for Using Data to Create Omnichannel Retail Campaigns

Last updated: October 2, 2019

Best Practices for Using Data to Create Omnichannel Retail Campaigns

The retail industry is facing new challenges. Due to intensifying competition from online retailers and faltering traffic instore, the industry is experiencing declining margins across almost every category. Because of this, marketing teams must use every possible channel to improve their campaigns. To drive successful campaigns in this omnichannel environment, data has never been more crucial. By using the best data sources and analytical processes possible, retailers will be able to improve ROI and help upper management make well informed strategic decisions.

In order to use data for optimal success, marketing teams must keep a few critical considerations in mind. They must find new ways to understand their customer’s purchasing behavior, which can be better understood through loyalty programs and location data. However, some internal considerations regarding privacy and data distribution must also be taken into account. 

Leverage Loyalty Programs

Loyalty programs are one way to quantify the customer experience, and the insights derived can significantly benefit an organization’s ability to understand their customers. By convincing customers to engage with your brand via a loyalty program, customers will make 90 percent more request purchases while spending 60 percent more in every transaction. This can significantly increase your organization’s bottom line while allowing your organization to better understand their most dedicated customers.

Learning the purchasing patterns that these loyal customers have is integral to understanding your business’s customers. You may be familiar with how the Pareto principle applies to marketers - that 20 percent of customers contribute as much as 80 percent of a company’s bottom line. By using loyalty program data wisely, your organization can minimize customer attrition while cementing their loyalty. For example, keep track of how often customers purchase specific items. Imagine a customer that buys a product like paper towels approximately every three weeks. It would benefit your company to send that customer a reminder to buy paper towels when three weeks has elapsed since their last paper towel purchase, and maybe promote a new household cleaner. This allows your marketing team to send a message at just the right time – which can cause the products to be repurchased instore up to 26 times more often.

Finally, these loyalty programs can be used to identify traits about the customer. This is extremely useful to segment the various markets that are loyal to your retail location. By segmenting your customers in an accurate, data driven way, your organization will have more granular insights on how to make the right strategic marketing decisions. For example, find out which promotions your customers redeem using the loyalty app. Then, try to determine what drove them to redeem the promotion by examining when and where they were when they made the decision to redeem the promotion. This will help your marketing teams better aim promotions towards the target audiences where they have the maximum effect.

Focus on Location

Especially in the context of brick and mortar stores, its important to understand where your customers are. This doesn’t just mean their geographical location – this also means knowing how they move through and interact within the physical store. This can give marketers insights into the amount of customer traffic depending on the time of day, area of store, or a variety of other factors. It also gives insight into the quality of that traffic – is it primarily window shoppers, big spenders, or just customers that need to buy a few critical things? This information can give a better understanding of how to use personnel and set up the store to provide the optimal customer experience and increase sales.

For businesses that engage in brick and mortar retail as well as eCommerce, focusing on location-based insights is even more important. This data can help your organization integrate online and offline campaigns, because the instore and online customer experience are not mutually exclusive. With a proper omnichannel view, marketers would be able to see that people don't exclusively shop online, or only shop offline. More often than not, people flip between online and offline channels. Imagine the experience of shopping for clothing – consumers usually want to see the clothes in person, try them on, and evaluate the quality of the materials. A customer may enjoy an article of clothing, but will access your website and see if they can get a better deal online as opposed to instore. Something as simple as free shipping and 10 percent off could convince them to order online, while still physically standing in your store. Without developing location-based marketing analytics, your store would have no idea how critical the instore experience was in motivating that online purchase. As a result, that store could be undervalued – or even shut down – due to an incomplete view of the buyer’s journey.

In fact, organizations should be aware of the very harmonious relationship that their instore and online experiences have. By approaching marketing and sales from an omnichannel point of view, a “halo effect” is created. This halo effect encourages customers to spend more money than they previously would have if they didn’t have the ability to shop both instore and online. This halo effect isn’t insignificant, either – it can translate into 20 to 40 percent of an eCommerce location’s total economic value. To truly measure how influential the halo effect is on each unique retailer, location based analytics are key. 

Personalize Marketing Efforts – But Be Mindful of Privacy

Personalization is a great way to emotionally connect with your customers, and send them marketing messages that will deeply resonate with them. Personalization has been found to increase the ROI of organizations by 500 to 800 percent – so if your organization isn’t engaging in personalization yet, there’s a huge opportunity cost. By using person-centric marketing efforts, your organization can find ways to improve the customer experience, which translates into excellent customer service.

However, there’s one serious downside to personalization efforts that all marketing teams must be aware of. To put it frankly, personalized ads that are a little too on the nose will make consumers feel creeped out and angry. Many marketers don’t seem to fully understand this, as illustrated in the graphic below:

best practices.omnichannel

(source: Gartner)

Keep in mind that many potential customers have no idea how your organization gained access to their personal information, especially if it was obtained via a third party. For example, a potential customer sends a private message to their friend about how they’d like to go skydiving. They open a social media application three minutes later, and they’re immediately confronted with targeted advertisements about skydiving. An experience like this can make your customer feel like your organization is watching them when they believed they were having a private conversation. Instead of forming an impactful, emotional connection with a customer, they have unintentionally been repelled.

Information from any channel is useful to better understand that customer and their interests, but it’s important to wield that information correctly. Use a customer’s personal data while keeping the quality of the connection in mind. Will that information be critical to facilitating a great experience with your organization’s product or service? Can it be combined with other data to create a more complete advertisement? If not, maybe use that data for internal use only. Alternatively, try more sophisticated ways to gather customer data – such as using free content to engage them and convince them to opt-in to data collection.

Integrate Data into a Central Location

To make the best use of the data that your organization has, its important to make that data accessible to every department. Departments and teams may be spread out across an organization due to differing job duties, but by nature these departments are intertwined and driven towards common goals. Unfortunately, the data infrastructure in many organizations is siloed and highly compartmentalized. This is ultimately detrimental to the organization, but the divided state of data stems from legitimate concerns.

The primary concern of most organizations is personally identifiable information, or PII. For some industries, like healthcare and finance, protecting this personal data is paramount. Far-reaching data regulations like GDPR have also forced organizations in every industry to reevaluate how they store and share data – and more often than not, organizations are erring on the side of caution. These virtual walls within organizations need to be broken down, and one potential solution is encryption. For example, Key Management Service (KMS) from Amazon Web Services allows retailers to encrypt individual pieces of data from people inside and outside of the organization. By using sophisticated encryption, PII will be completely protected and able to be selectively shown to individuals or teams within the organization.

Another concern is that its exceedingly difficult to understand the impact and meaning of data, especially when it is spread across the organization. Some data may seem impossible to explain to outsiders, or may be ignored by outsiders due to its perceived irrelevance. This is why retailers must invest in better data visualization software. By investing in this software, departments like finance can more effectively communicate trends with more disparate departments, such as marketing or operations. Having a better understanding of where all of the data in your organization is and how to access it can be critical to success in the omnichannel retail environment.

Data Driven Omnichannel Marketing Assists the Entire Organization

For retailers, incorporating a wealth of data into omnichannel marketing campaigns is a surefire way to gain a competitive advantage. When using this data, it is most important to remember that the quality of the data is far more important than the quantity of data – and that giving your customers a feeling of comfort and privacy is crucial. By harnessing the power of data, retailers can look forward to greater success not only with their marketing strategies, but across the whole organization.

Written by Marketing Evolution