Opinion: Winning the battle for customers

Let’s not kid ourselves. Acquiring and retaining customers is a war.

The battlegrounds are the high street and online. The casualties are traditional multichannel retailers, and the victors are the disruptors. Retailers must fight for every pound and every customer.

Facing strong headwinds, retailers also contend with continued channel shift; the migration of customers to online who increasingly use click-and-collect.

“Failure to understand changing customer behaviour across channels and touchpoints could see retailers make ill-informed decisions”

So, yes, the cost to serve has increased. But if you don’t offer the convenience customers demand, they will buy from someone else who does.

Most retailers still have a P&L for online that only measures incremental sales and margin. This provides a flawed view. After all, their own websites are their biggest marketing campaign and in many cases drive more than 60% of footfall to stores.

Failure to understand changing customer behaviour across channels and touchpoints could see retailers make ill-informed decisions about store closures or how to invest in their websites and online presence.

Here are just a few pointers as to the opportunities retailers can leverage as we adapt to this ever-changing multichannel world.

Data is your weapon

Very, very few retailers leverage online data across their businesses. Online data can tell you what products are being purchased with others.

If you knew this, wouldn’t you want to ensure that you leveraged this insight in your stores to merchandise the products most likely to be bought together?

Online data also includes clickstream analysis, eg, customers who went to the TV category then went on to home entertainment. Or those who looked at red dresses, then looked at black bags in accessories. This should also inform in-store merchandising decisions.

If you know that customers are searching for products online that you don’t stock, this creates opportunities to buy and range the products across your channels.

As more customers choose click-and-collect for order fulfilment, how many retailers have incentivised colleagues to cross-sell other items to customers when they come in to store?

Retailers are shuttering stores. How many are contacting existing customers and migrating them to another store and on to the web?

“How many retailers do you know have a customer retention manager? Far too much of the focus is on acquisition. Let’s fight to keep what we’ve got”

Organisational structures will need to adapt. Why do we have siloed buying, merchandising, content and sometimes marketing teams, when we know that multichannel customers are the most profitable? Our core objective should be to deliver the products, content, marketing communications and overall experience the customers want, irrespective of their channel of engagement.

How many retailers do you know have a customer retention manager? Far too much of the focus is on acquisition. Let’s fight to keep what we’ve got, too.

When was the last time you walked across the entire value chain of your business and asked yourself, “If I was a customer, what would I want the business to do differently?”

You’d look to improve customer service levels. You’d offer free returns. You’d have a focus on customer-facing KPIs, such as customer satisfaction, and less on pure commercial KPIs.

It’s good to know average order values, units per transaction and conversion rates. However, these are the outputs; they do not provide insight. Customer behaviour and levels of satisfaction measure inputs and provide genuine insight.

If you get the inputs right around customer experience and service, the outputs will take care of themselves.