The concept of context is increasingly influential in the world of technology. Earlier this year, for instance, Facebook Messenger introduced new features that deliver contextual information to users alongside the messages they receive. Similarly, Spotify recently launched a contextually aware playlist function for runners, where the music they’re listening to changes based on their pace.
These services work well because they use readily available information to pre-empt wants and needs, thereby delivering a more relevant, user-friendly experience in the moment. Intelligent application of contextual data promises to make our online lives more convenient and, crucially, more personalised. This begs the question, why aren’t more retailers experimenting with context?
Retailers have long been well aware of the inherent value associated with collecting customer information. The collection of data such as names, addresses, and browsing habits, can support efforts to improve operational efficiency, deliver better services for customers, and produce more effective marketing communications – initiatives that all have the potential to significantly boost the bottom line. In fact, the practice is so important that a recent report from the UK Commission for Employment and Skills stated that customer data collection was essential for boosting supply chain efficiency during the last recession.
However, despite being aware of the benefits, the majority of retailers continue to under-achieve in their efforts to capitalise on data, especially in the area of marketing, and regularly deploy ineffective strategies that actually have the opposite effect to that intended. A study from marketing and loyalty analytics company AIMIA, for example, shows that 69 per cent of consumers are actively unsubscribing from marketing communications. So why is marketing failing to reap the same benefits of data collection as the supply chain? It’s simple – unlike Facebook and Spotify, retailers are failing to embrace the power of context.
Rigid operational and IT infrastructures are partially to blame for this. The modern retailer processes a huge amount of information, but this is rarely in real-time and data often ends up siloed across multiple different channels and business units. So data generated by web, mobile and in-store channels, for example, may be stored and analysed in isolation well after the timeframe when it is most valuable. With a typical customer journey spanning multiple channels – it’s not unusual for a customer today to browse on mobile, purchase on desktop and collect in-store – this situation can make it incredibly difficult to understand the customer and deliver a personalised experience.
Customers suffer the impact of this delayed, siloed model every day. How many emails do you receive that are addressed to you, but which aren’t even vaguely tailored to your interests? How often do you encounter the same web ads that seem to be based solely on the last online purchase you made, or an item you looked at, but have long ago lost interest in? This is not real personalisation and, with customers bombarded by these untargeted brand communications constantly, it’s little wonder that they are disconnecting from brand messaging.
To truly differentiate the service they offer, brands must find better ways of linking disparate information in real-time to create a more accurate view of the customer. Contextual marketing technology is specifically designed to address this issue, ‘listening’ live to consumer activity across different channels, tracking all their signals, from browsing behaviour to purchases.
Ongoing developments to in-store environments will help here too. With Facebook recently announcing its offer of free beacon devices to retailers, and an increasing number of brands arming sales assistants with tablets, there has never been a better time for stores to integrate insights from the shop floor with digital channels. By incentivising shoppers with things like exclusive offers or free in-store Wi-Fi, retailers are in a great position to sync online shopping accounts with accurate in-store tracking of customer behaviour.
By developing this 360 degree view of the consumer, and applying the power of context, we can say goodbye to the marketing mass emails and paid advertisements that hound customers across the web. Instead, omnichannel contextual marketing systems capitalise on the moment, allowing businesses to fundamentally change the customer experience. This could mean offering an in-store customer a discount on an item they might have been lingering in front of for a period of time as they move to leave the store, or ensuring a customer that recently bought a pair of shoes is sent information about accessories, such as insoles or protector spray.
To date, retailers have settled for less with their marketing efforts, failing to consider the context that surrounds each customer and their purchases. The BRC recently reported a 2.2 per cent fall in shoppers on the high street, while IMRG revealed that eCommerce sales are up 12 per cent. As consumer shopping habits continue to develop and change, retailers must look to address their customers individual needs to keep them loyal and their business incoming. By embracing the world of context, retailers of all shapes, sizes, and channels can keep their customers happy, loyal, and driving more business.
Contributor
Chalres Nicholls, SVP Product Strategy, marketing Solutions at hybris SAP CEC
