Why ultra-personal shopping is the future
The very nature of what it means to be an Australian retailer has been completely transformed. Today’s consumers have different expectations and desires. With the ability to shop anytime, from anywhere, in any way, they expect more from their brands than the simple purchase of a product. They want expertly curated, ultra-personal experiences.
We are seeing a strong and growing consumer desire for personalisation. Whether it is wardrobe suggestions tailored to individual customers’ tastes, or interior design advice that recognises a shopper’s specific needs, we have seen the demand for this form of curated expert service is here to stay. This demand is growing strongly amongst younger consumers: 69 per cent of millennials expressed interest in personalised brand experiences.
Trailblazers like Canon’s Experience Store in Melbourne are showcasing this desire for personalisation and interaction. The store enables visitors to try and buy a range of Canon devices, book a variety of workshops and receive tailored camera advice from in-store experts. However, there’s no sugarcoating the fact that it takes some real genius behind the scenes to personalise an offering to every single consumer.
So, the question is, how can Australian retailers continue to meet customers’ evolving expectations and needs while trying to reinvigorate growth?
The answer is through cultivating the power of data analytics. Data analytics will allow Australian retailers to track individual customer preferences and profitability; identify and nurture the high-lifetime-value customers who drive growth and liberate the retail experience by enabling “ubiquitous shopping” – consumers buying anything they want, anytime, anywhere, in any way they choose.
Leveraging analytics-driven insight
Ubiquitous and ultra-personal shopping relies on one critical ingredient: data. As Australian consumer preferences evolve, retailers are embracing innovative technologies that help them learn more about their customers, developing relationships with a segment of one.
For example, supermarket giant Woolworths leverages data analytics to gain insights into what consumers are buying, when and where they’re buying to assist in both their target marketing and purchase offers. Similarly, Zara feeds back in-store data to their head office, delivering insights on a daily basis. The data is not only for reporting purposes but used to select which designs to focus on. It also helps identify items that aren’t selling well, which helps determine what changes need to be made in the product development and supply chain process.
Customers are recognising the power of their data, and this will alter the way retailers operate. According to a new Accenture survey, consumers are willing to provide their data in return for something they value, such as automatic credits for redemption and loyalty points (64 per cent), access to exclusive deals (60 per cent), the ability to gain points and rewards (56 per cent). With data exchange tipped to be a game-changer for the industry, Australian retailers need to ensure they get their data-use right and don’t overstep consumers privacy.
For Australian retailers wanting to generate maximum value from data, they need to apply analytics at the enterprise level. This includes areas like revenue drivers, marketing costs, fulfillment costs and digital levers for customer behaviour. By doing this, retailers can gain a true picture of how each individual customer is behaving and how each product is performing.
In addition, Australian retailers can leverage these insights and weave them throughout the whole business – for example, product teams leveraging data-driven creativity to understand their audiences, and marketing promotions grounded in insights about the profitability of individual products and customers.
Where to now?
How can Australian retailers be sure they’re maximising the value of consumer data? Retailers should ask themselves the following questions:
- What percentage of your upcoming revenue plan will come from existing customers?
- What’s your rate of acquisition of new customers?
- What’s your rate of repurchase from 1st to 2nd, 2nd to 3rd, 3rd to 4th, 4th to nth? And how do those rates trend over a 12-month period?
- What percentage of your customer base is loss-making?
- How much of the inventory that your customers want to buy do you have in stock?
This is a transformative time for the Australian retail industry. Australian consumers are changing. Australian retailers and brands are changing. It’s hard to personalise an offering to every consumer and there’s still work for retailers to do. However, by using technologies to connect the broad range of retail touchpoints that now exist, Australian retailers have a unique opportunity—to create new services and experiences that weave into the fabric of their customers’ lives, and to maximise the possibilities for ubiquitous and personalised shopping today.
Michelle Grujin is the retail lead for Accenture in Australia and New Zealand.