The traditional balance of business power has shifted. Today, the advantage rests – literally, through mobile devices – in the buyer’s hands.
Disrupting the Balance
Consumers worldwide are getting more for their money. Because they can easily tap the Web, through their desktops, notebooks, and smartphones, they can quickly compare, price-shop, and purchase a wide range of products and services. Because of the Web, as Bloomberg Businessweek Research Services reports, the dynamics driving business have changed:
- “Consumers and business buyers are in the driver’s seat thanks to online forums, social communities and social media sites.
- The Web and mobile devices have increased expectations for transparency, immediate response and intuitive business processes.
- Differentiation is more difficult to maintain, with competitive offerings just a mouse click and a “free-shipping” offer away.
- Whereas customer relations used to be considered a sales or service function, customer experience encompasses everything from the first impression of the brand all the way to sales, fulfillment, invoicing, billing, collections and after-sales service.” (p. 5)
To put their companies back in the driver’s seat, business leaders must think differently and learn how to leverage the Web to deliver the kind of value that builds and nurtures customer trust and loyalty. It’s a shift which can strengthen companies and give them the foresight to generate the streams of revenue which enable them to profitably sustain their operations over the long term. It’s a shift better realized by running advanced analytics to glean from Big Data the real-time insights that help decision makers spot those previously untraceable opportunities so their companies can more strategically navigate their markets.
“The goal,” says LiquidAnalytics Partner Ravi Kalakota, “is to leverage the shopping, spending, inventory data [held in each company’s databases to help them] make thousands of micro pricing, merchandize, and assortment decisions in a week instead of ten…to customize and deliver one hundred assortments to shopper segments, instead of ten…to predict one hundred stockouts about to occur, instead of ten…”
To make this change, so companies can outperform competitors – and more important, provide customers with the offerings and level of services they desire, business leaders must focus on developing new ideas and using better methods for testing each possibility. With advanced analytics, companies can get the functionality to see better and create strategies that help them better engage their core customer segments. One company that is using advanced analytics in this way is retail leader Macy’s, with its much lauded omni-channel shopping strategy.
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To help Macy’s create an exceptional customer experience, Chairman Terry Lundgren appointed himself chief customer officer and sponsored an initiative to build an omni-channel strategy that uses insights from advanced analytics to inform decision-making.
Since roll out, this strategy has helped Macy’s develop in-store experiences that “mirror the online shopping experience,” says Lundgren, while “…adding functionality and content online to provide customers with additional assistance in product selection.” The goal: “to build deeper relationships with customers and to ensure Macy’s and Bloomingdale’s are accessible no matter how or when our customers prefer to explore or shop.”
From its advanced analytics findings, Macy’s identified and developed several opportunities to turbo-charge its strategy: self-service kiosks, inventory-locating registers, and True Fit, a Macy.com “tool that helps women select jeans that are best-suited for their ‘unique body and style preferences.’” Tools like True Fit can do much to help ease the trepidations that e-shoppers sometimes feel, wondering if a product purchased on the Web will actually look and function – after taking it out of the box – like the product promised in the imagery and reviews profiled online.
For Macy’s VP of Customer Centricity Julie Bernard, this omni-channel strategy enables the retailer to finely tune its merchandising decisions. Considering that Macy’s annually invests US$40B in its displays, it could boost profits significantly by simply developing merchandising plans which appeal to a particular customer segment, plans which are informed by archived data on each segment’s previous product preferences.
Finding the Most Fitting Option
There are many choices available. With advanced analytics, business leaders can understand which option identified is most feasible for their company to implement. In the case of Macy’s, omni-channel retailing is proving a successful solution to helping the company dissuade customers from engaging in the two challenges large retailers face in the Internet age: showrooming and price-shopping.
As Macy’s is also proving, advanced analytics can help companies better understand how they can refocus a customer’s attention away from price – and toward their encounter with that products (i.e., in-store and online), people (i.e., clerks, reps, and customers), and places (i.e., physical and virtual) that humanize the transactional process – and infuse into the shopping experience a bit of retailtainment.
Though these kinds of efforts, businesses can put the right offers into the hands of the right customers via the right channel – before those customers find what they need elsewhere, either on the Web or in their neighborhood.
Image source: Wikipedia
Is your company running analytics software to improve its customer experience? If so, which type of initiatives has it developed – and what kind of results has it realized – from using this software?