The retail industry has a unique opportunity when it comes to testing, optimization, and personalization. On every retailer’s mind right now are brick-and-click considerations, the upcoming holiday season, mobile and social trends, and the Internet of Things, and retailers are constantly expanding and evolving their strategies to gain greater consumer engagement and boost conversions. Christi Terjesen, a principal consultant with Adobe Target Consulting, chatted with four Adobe retail optimization experts on the trends and best practices they’re seeing in the field—and what to expect in the future.
What are the biggest opportunities or challenges in the retail industry right now?
Amy Lam, Digital Optimization Consultant: It seems people think that, for the retail industry, mobile is the greatest opportunity. We’ve all heard so much about mobile and being in the era of mobile—and I get it. We know the mobile audience is growing in general and for retailers. But I’m not convinced the retail space is really using mobile effectively. I always recommend seeking data to show if prospects are really buying on mobile phones or just researching.
Jessie Doecke, Digital Optimization Consultant: Retailers must invest in the data they own and really understand the customer and noncustomer behavior that is device agnostic versus device specific. I think it’s critical to understand that data evangelism and visibility across the organization is the foundation of a successful optimization program. It’s not just about communicating wins—it’s about identifying real starting points and benchmarks to understand the big opportunities to test, and to continue to understand how those tests are moving the needle in the long term.
Richard Oto, Digital Optimization Consultant: One of the challenges we see a lot of the time is that companies are trying to dictate or force how consumers act with their mobile app. But we can’t force those assumptions on our customers. We need to allow them through testing and optimization to determine what activities are most relevant to them on their mobile devices.
Amy: And where, exactly, is mobile in terms of all of the customer touch points? Where does mobile sit? And where do ALL touch points sit?
Richard: Mobile spans vertical and horizontal; it touches multiple channels and teams. Companies need to identify ownership between marketing, product, IT, etc. It’s important to identify ownership of the various portions of the site so that they’re able to create and execute on a strategy.
Jessie: The biggest challenge I’ve seen is the wealth of data retailers have that they may not be fully utilizing, to target and serve relevant content, and support user needs and functions across devices and touchpoints. This could be for a number of reasons, whether from constraints related to development resources, solutions owned, limitations with data warehousing or a lack of strategic alignment across business units and teams. The opportunity to leverage this data to increase conversion and drive customer loyalty is limitless but there must be a general consensus for the strategic vision across departments and resources to support this opportunity.
So it’s about understanding how your website and how your app are being used by customers, possibly in conjunction?
Amy: It’s not just about your website for acquisition purposes. Say a customer goes into a store and is looking for a trench coat. One way she can shop this retailer is on its website. Maybe she does research before to see the latest trench coat colors. Then, when she gets to the store, she really likes the green coat, so a salesperson comes over and uses the store’s app to find her size. There are so many different touch points ultimately influencing the customer’s purchase. It’s not just about the website or mobile app. And, yes, there are plenty of opportunities, but also plenty of challenges. As a retail executive I would be trying to think about how to make all of these pieces fit together and make the entire experience consistent and cohesive and, at the same time, a fantastic experience. I want the customer to not just make this purchase but to come back and buy shoes, too, for example.
And before going too far you can test to see if your hypotheses are correct?
Richard: So backing up to the question of the biggest opportunities and challenges, I’d say data availability is both an opportunity and a challenge. There’s more and more data available for customers—second party, third party, different platforms. My clients struggle with how to identify what’s needed, get it into their systems, and make sense of it to scale personalization programs. What I see with mobile is that people are so focused on what we can do and they get into these fringe use cases, focusing on very hard data integrations. This really bogs us down and prevents us from effectively using our time. But we need to increase velocity, too. Time is our most scarce resource. Every time we aren’t running tests or campaigns we’re not learning and not identifying future opportunities. So going back to the biggest challenge, I’d say strategizing a long-term plan then focusing on scalability.
How can retailers do that? Is it setting clear direction to the people on their teams—what they should go out and look for, for example? What can retailers do here?
Richard: I would find the data sources that are readily available and perhaps even built-in. Very simply, Target and Analytics detect geolocation, previous site activity, current site behavior. Start there. Some sources are easier to get in and some are harder. It’s crawl/walk/run. Don’t start more complicated then you have to.
Matt Lowden, Digital Optimization Consultant: I keep coming back to personalization. With mobile, everything has to be data driven and, second, I think everything needs to be loyalty focused which relies heavily on convenience. I think about the best mobile experiences I’ve had and the brands I purchase from. No one wants to browse around and shop forever on their phone. Those sites that I’m loyal to I have a profile with, they know what I like and when I’m ready to go in and purchase something they know who I am, they offer it up, they have my credit card on file or use Apple Touch ID so I can pay fast and I’m out. Brand loyalty, personalization and streamlining the mobile process—those are three things that, if you can focus on and build out, you’re going to have a great mobile experience.
Amy: Look at the data aspect, too. You really have to know your consumers, too. If you have the data but can’t interpret it and get to the core insights on what resonates with your audience, then you aren’t really tapping into the resources available to you. Tap analysis help if you need more support combing through the data.
I agree. It’s not enough to just know customers are 24–45-year-old females. You have to know how often they shop and why, for example. Are they looking for suggestions or just want the jeans they need right now? Are they here to browse the latest styles?
Amy: My question is always why? Why do they shop with your brand? Because of familiarity? Because they know you have the right cut of jeans, for example, that fits your body type? Is it something else?
Are there ways to get there besides just asking?
Amy: I always go back to the qualitative studies like UX studies, surveys, and product reviews. What I’ve seen be very successful is the coupling of qualitative and quantitative. I think the quantitative is a mixture of observing what actually happens that, perhaps, consumers can’t quite articulate in the qualitative studies and, of course, testing. It’s sometimes a challenge to find the resource or build the skill set to get to those insights marketers need.
Matt: There’s also marrying the in-store and mobile experience—what Amy’s saying informs that in a lot of ways. We’re seeing businesses go out of business because of the mobile effect—people shopping on their mobile phone while they’re at the store. Customers are showrooming with Amazon and other lower cost providers. I think, Amy, what you’re getting at is quantitative/qualitative—why are customers loyal to you? Why would they appreciate being in the store versus shopping online? Maybe it’s being able to try things on, for example. But then it’s using mobile to drive there. We’ve tested using brand loyalty and discounts and things like that and, more and more, the successes are with mobile.
Jessie: This requires that a retailer step out of the shoes of a retailer and into the shoes of their customer. What makes their brand or product different from the customer’s perspective? Have you tried to shop your own site, app or store? If so, what could have been better about your experience? Now put your retailer shoes back on and ask yourself (and your team)—what are we doing to better position the primary reason why our customers shop with us and what are we doing to make their experience better? Now take a good look at your demand data to see how this translates to site, app and store behavior, and your shipped data to see where further opportunity lies to take advantage of channel affinities, product purchasing combinations and subsequent purchasing trends. Taking these steps should give you quite a bit of insight to pinpoint both bigger opportunities as well as low-hanging fruit.
So organizationally we need to break down the silos because our customers aren’t buying in silos—and maybe they never were.
Matt: I agree. One example I read recently was about a “virtual dressing room” and consumers could be in a dressing room with an article of clothing in a particular size—if they need a different size it was complicated. You had to change back into your clothes, find a new size, lose your dressing room—it was annoying. With this mobile app you could request a new size or color and have it brought to you in your dressing room. That’s a perfect example of marrying in-store and mobile to drive loyalty. Marketers should be thinking how to complement other channels.
Amy: If you have a retail store it’s a huge advantage. People are coming and interacting with products in your store. They’ve already gone to your store—they already have an interest. Capitalize on that!
Matt: Yes—and there are so many opportunities to do this. Brands are building apps with geolocation targeting. That’s so out of the box these days. There’s also beacons and opportunities to push special notifications to people near your store. It’s just more breaking down of silos.
I also think there’s a real relationship between online and brick and mortar. There’s the notion that if I order online and it doesn’t fit I can take it to a store and swap out instantly. Or if one doesn’t have a size and the other does, perfect. That’s a complementary relationship.
Matt: I see it more and more. I shop online and at checkout have the option to have it delivered in a few days or pick it up at the store near me.
Right—there could be a mixture of in-store and online happening all of the time, with the same customer. Add mobile and there’s a new dimension entirely.
Amy: I love what you said—it doesn’t have to be competitive. Often when I work with retail clients they don’t see it that way—it feels competitive. But it shouldn’t be. I see so many testing examples that involve online interactions but, ultimately, yield valuable information that the stores could benefit from. That gives every platform a boost.
Jessie: The benefit from integrating online and brick and mortar fulfillment options goes both ways. For example, shipping windows around the holidays are definitely a seasonal concern for most retailers to keep up with, and it’s becoming more common for companies to use retail stores as a ship-to-store delivery option or as a secondary warehouse of sorts to backfill primary distribution center bottlenecks. At the same time, brick and mortar can utilize online as a secondary method of fulfillment when their own inventory is cleared out. The result is that the retailer collects additional sales and both channels benefit. The problem is that the adoption of these opportunities can delayed for a number of avoidable reasons that really just equate to the perception that each channel is competing with the other. For example, who gets the credit for the sale for each scenario, how should commission be structured for brick and mortar fulfillments, or even just concerns related to product sell-through and replenishment. These shouldn’t be blockers to expand the avenues a customer has to purchase. Getting the brand and the product to the customer is what matters because it’s what acquires and retains loyalty, and ultimately keeps a company in business.
Amy: So how can one brand look at all of these channels and connect them to the same customer? I ordered on the site, picked up in-store—and picked up something else—and then accessed the brand’s app a few days later. If I were a retailer I would love to have that level of information and, from there, have it inform my personalization strategy.
Matt: And that goes back to brand loyalty. We’re working on solutions that will marry a profile across all devices. If you can convey the value of becoming a member of that brand site or community, then people will authenticate. You’re ID’ing yourself and it makes it easier for brands to convert you. Brand loyalty isn’t the only way, but it’s a good process and it’s very powerful.
Amy: Brand loyalty is nothing new for retail brands. But how it’s translated now is different. Now they say, “oh, we know this segment has specific ways to interact with our brand,” and can go from there. I can see this evolving even more fully in the future.
Agreed, brand loyalty now includes ease of use across the different channels of customer interaction and through customer experience optimization and personalization retailers can help maximize that loyalty.
Thanks to Christi for moderating this roundtable and to the team for lending their insights and strategic thinking. The retail industry is definitely unique in the digital marketing and optimization landscape, setting trends for the other verticals to follow. We’ll continue to tackle some of the shifts and growth opportunities in the industry in the coming weeks and months.