3 Reasons Retailers Need to Focus on Customer Identification
The majority of customers who walk into a physical store are unknown digitally to the retailer (they don’t know their email address). Our data shows that on average, store retailers gathering email addresses from both purchasers and non-purchasers, are 85% unknown previously. The untapped opportunities to accelerate opt-in customer identification prior to purchase in the store are immense and present unique challenges in order to achieve the new subset of customer data.
In an omnichannel environment, historically the majority of progress in creating comprehensive customer profiles has been done online. From using email addresses as identifiers for purchases to implementing cookies or various methods of digital fingerprinting to track browser history, online customer purchase paths are fairly seamless. There is no dedicated CRM for the physical store in the same manner… for now.
When it comes to the offline world, there is much more ambiguity when it comes to understanding the shopper’s interests in real-time and how to provide a similar experience like that engineered and measured online. Not much has been done to identify customers in the store at scale. And while the majority of product research is done online, over 90% of purchases still take place in the physical store.
It has become standard to track a shopper or customer’s behavior in the online world to help drive sales. Why hasn’t it become a standard practice in the offline world?
Offline customer identification is paramount for the shopper who has done some research on a product they are considering, but has not made a final decision. Unlike the shopper who either knows exactly what they are going to buy or has no intention of buying at the time, there is a brief opportunity for retailers to capitalize on this “last mile” opportunity using the right touchpoints. However, most retailers are missing out on the opportunity due to the lack of offline systems in place to track this behavior.
Here are the reasons why it’s critical for retailers to start identifying customers in the store:
Attribution modeling for omnichannel: Offline customer identification helps paint a clearer picture of which online and offline touchpoints contribute to sales
Offline customer identification can go a long way in seeing which touchpoints (both online and offline) are the most successful to lead to purchase. From the online perspective, if a retailer knows that a shopper is researching furniture on their website and has an identifier associated with them, it would be helpful to have a complementary offline identifier to help track that experience. If the retailer offers digital experience with devices in the store and allows the shopper to go around and browse products, they can allow the shopper to opt-in via email at the end of their shopping experience in order to combine that in-store experience with the shopper’s online experience. If the customer goes into a store and deeply considers something but ultimately decides to buy online a few days later, the retailer must know that the impact that the store visit had. Last-click attribution is an insufficient model for modern marketers for measuring success.
Retailers will be able to personalize digital content and interactions as a continuous shopper journey across physical and digital
Being able to have a complete profile of a customer provides many added benefits, such as more effective and targeted content, advertising, intelligent and timely notifications, and the ability to accurately predict customer lifetime value. As more data collection is captured from the offline world, retailers will be in a much better position to make better decisions in messaging, offers and advertising. Rather than making decisions based on arbitrary aggregate metrics, this will empower retailers to use hyper-personalization in a acceptable and helpful way.
Allows sales associates to add more depth and find new ways to engage customers
At the end of the day, if a retailer and staff are providing value to the shopper on the items they are most interested in, shoppers will become more likely to have a positive image of the retailer. In an age where shoppers are looking for a tailored shopping experience, being able to collect data and using it in a meaningful way support by human interaction to drive value to the shopper is the best way to win customers over the long haul. While ecommerce is growing, there is still much emphasis on offline store experience as shopping online will never provide the same sensory benefits of exploring products in the store.
As the industry continues to evolve, retailers will find the landscape to become even more competitive when it comes to winning over shoppers who are looking to make significant purchase decisions. Having systems in place both online and offline to understand the ideal shopper, identification is the first step to creating a winning omnichannel experience.
6 Types of Online Customer Identifiers
Just as information is easier to access on the web than it is to find in a book, customer data is much easier to track and analyze when it takes place online than when it does in-store. This explains why most retailers will focus on identifying online customers more than offline customers; it is easy, and the plans are already in place. We argue that both types of customers provide vital information, and because online customers can become offline customers and vice-versa, both need to be known. Ecommerce and online customer identification should go hand-in-hand with every retail because the data is always there. But, before a sale takes place, how does a retailer know what shoppers are looking at and thinking of buying?
What it means: Cookies are text files stored in a browser that tracks one’s movements within a site and remembers selections one made (such as a login or preferences) from previous visits.
Pros: The retailer can be given data about how customers move around on their website. This is comparable to seeing what aisles are crowded or what displays are not being seen in a store.
Cons: Little information about the actual user can be relayed to the owner of the site. Also, multiple people can be using a certain device in a day, and a single person can use multiple devices making it hard to identify a single user.
Analysis: At its starting level, tracking a website’s cookies is relatively low-cost for a retailer who is just beginning to identify their customers in the not-so-obvious ways. There are easy applications to use that can make this is simple way to remarket an item to a potential customer. This just skims the surface of customer identification but is a good start.
What it means: Social IDs can be used to find a customer’s social media accounts when they visit a website in order to retarget these people later. Someone who is signed into Facebook, Twitter, or other social media accounts can provide the retailer with the information of what websites they visited and products they looked at.
Pros: This helps to provide relevant content which can be found across devices, so moving from a laptop to a tablet to a phone would not be a problem since one is given the same experience.
Cons: While Facebook and Twitter have the retargeting information, the retailer is not given the Facebook and Twitter information. This method does not give the retailer account information or personal data that is posted on these social media accounts.
Analysis: This method helps a retailer to have their customers get to know their brand, but not so much the other way around. However, because social media has a powerful influence, it is great to have retargeting efforts here.
What it means: As phrased by Forbes Magazine, “This technique allows a web site to look at the characteristics of a computer such as what plugins and software you have installed, the size of the screen, the time zone, fonts and other features of any particular machine. These form a unique signature just like random skin patterns on a finger.”
Pros: This is an extremely effective way to identify customers and score their behaviors. Even if multiple people use a device, they can guess which user it is based on these characteristics. The retailer learns of common behaviors to understand and identify their customers which is arguably more important than knowing an address or phone number.
Cons: While this is not illegal, most customers do not want to feel tracked by information they did not realize they were giving. As a result, companies who follow one’s digital fingerprint do not talk about how they do so.
Analysis: Only a large retailer with the resources to spend and the desire to create a completely personalized experience should take this approach on as a company would receive large amounts of data, and the process of capturing this and analyzing requires high costs and time spent.
What it means: Oftentimes for a retailer, a mobile app is associated with a loyalty program which typically prompts a customer to provide personal information and/or login with their social media accounts.
Pros: Downloading a mobile application is a very transparent way for a retailer to capture some customer information. This can provide a wealth of data on customer identification for the retailer, and it is more clear to the user that they are willingly providing this information. The owner can track similar information that they do on a website with a cookie ID, but they may also have a clearer purchase history and behavior characteristics.
Cons: The majority of smartphone owners use the same five applications, so it is often difficult for a retailer to get potentials customers to download the app and find it useful. An effective mobile app will require development costs to create and marketing costs to promote.
Analysis: The customers that are identified provide quality data, but the retailer must incentivize regular use to make it effective.
What it means: We mentioned previously how valuable an email address can be to a retailer, and the most simplified way of identifying this is by merely asking. Having an newsletter/email sign-up on a web page is a basic opt-in way for customers to provide their information.
Pros: This is a more traditional online customer identification effort that customers are more comfortable and familiar with. It is clear that one is opting-in to provide the information.
Cons: It is what happens after the sign-up that may make this a difficult identification method. People are wary of constantly receiving useless emails and not seeing content that they would like. Therefore, many customers will ignore a prompt to put their email in.
Analysis: In order to keep the usefulness of this method, a retailer needs to be smart about what they do after. This can be a cost effective form if the retailer is able to show that their email will be put to go use.
What it means: An online survey would be the most comprehensive way of simply asking customers for things the retailer wants to know. The questions can range from what is your email to what is your age to how was your experience on this website.
Pros: Similar to a newsletter sign-up, this is an easy way to show to one’s customers that they want the information to be clearly opt-in. When the survey is filled out correctly, the retailer can learn exactly the information they want to know.
Cons: When a website emphasizes its survey a bit too heavily, the retailer runs the risk of annoying their customers. Some retailers answer to this is to offer an incentive such as a coupon at the end of the survey. However, customers often rush through and not bother to answer correctly just to get the prize in the end.
Analysis: With any customer identification technique, quality is just as important as quantity and should be weighed when deciding how to approach this. Similar to an email sign-up, the retailer has to find a way to get past initial skepticism.
Each technique varies on scales of effectiveness, cost, and customer perception. Deciding which approach(es) to take depends on the size of the retailer and the digital experiences that they want to give their customers. Additionally, this data is only useful with proper analysis and being willing to implement any changes made according to any findings. To make the best use of these efforts, they should be integrated with other systems to create an omnichannel experience. Therefore, customers identified through online techniques would not be separate from those found offline.
Customer Identification: Past, Present, and Future
Any retailer can testify to the importance of knowing your customers and the potential lifetime value of each new shopper. Customer identification has gone from remembering the faces that walk in your store to mannequins tracking and profiling these same faces. Identification tactics range in scales of effectiveness, cost, and creepiness. What remains constant is the value that is added and the importance of at least doing something. Before we can begin wading through the world of customer identification, we need to analyze what was done in the past and how value was added to the retailer back then.
In 1845, Tiffany and Co. released a catalog called the “Blue Book” making it the first mail order catalog in North America. By 1888, The R.W. Sears Watch Co., issued their first catalog which grew to be “the Consumers’ Bible” and led to the fifth largest department store today. The influence of catalog retailers helped transition society to be familiar with national brands and have relationships with them. Naturally, all customer records were on pen and paper where the customers were identified by their name, address, and possibly a purchase history. In this time, the retailer could not have the confidence that this information was correct as it was easy to simply write down another name or not have the data updated when one moved. Before the advent of computer systems, direct mail and catalogs were the only way retailers could have any idea who their consumers were without face-to-face interactions. Furthermore, any information that the retailer had on a customer could not be used in-store, for personalization purposes, or remarketing efforts. This was simply for interested people to ask for more information. In many ways, having a pure opt-in campaign like direct mail is effective. Each dollar spent is put to good use since the customers are more likely to buy since expressing interest. However, similar to a billboard on a highway, mass targeting exists is an effort to pick up someone new. Maybe they’ll only shop once, maybe they’ll shop a hundred times, but if that one person had to come from one thousand people seeing the billboard, some retailers might believe it is worth it.
Direct mail is the last piece of customer identification that is still used to this day. Consumers appreciate the style inspiration, the feel of holding something physical, and the familiarity of flipping through a catalog. However, the primary information that a retailer wants today for customer identification is an email. A single email today could be worth anywhere from $1 to $40 or more for a retailer. Email today is the login for the majority of accounts, keeps one’s order history with a company, and it is where direct advertisements are sent. Email has always been seen as an opportunity for marketers to reach people at a low cost. Seven years after email was invented in 1971, the first mass advertising email was sent out for Digital Equipment Corp. which resulted in $13 million worth of sales. Today, it is relatively easy to receive an email address from a customer since the majority will ask for the email at check out online and in stores. However, prior to any purchases or venturing onto a website, the retailer has more difficulty finding interested customers. There are ways to get these valuable emails from potential clients but the ethics behind the manner in which it is done is not strong. Companies and agencies buy and sell emails to make a billboard-like campaign seem like a direct and personalized message. Many wanted to claim the death of email several times with the increase usage of text messages and social media, but the truth of the matter is 91% of consumers check their email daily. Email remains as the unifier and identifier of consumers, and yes, other channels are growing but the importance of email still needs to be recognized.
New ways of identifying customers are emerging and some are becoming commonplace such as identifying customers whose phones are searching for in-store Wi-Fi and by using cookie IDs to track intent data when shopping online. Retailers have the potential to be filled with large amounts of data on current and potential customers. But, what methods are actually worth it and how does one start using or capitalize on their data? What methods are dying out and what new ones are emerging? Join us to find out how to take advantage of the offerings of the present and prepare for the future.
Will Pinterest Ever be the Facebook of Retail Intent Data?
An area of focus within the realm of omnichannel has been extending our online experiences and platforms into the physical world. To merge Facebook, Amazon and Pinterest with the business of clicks and bricks it would take APIs, personal devices and cooperation with the gatekeepers of physical store retailers. It’s a worthy and lucrative goal as increasingly, physical stores with omnichannel at heart are gaining increased favor.
Last week in the retail world, Pinterest announced that they are unveiling “Buy” features after much anticipation. It’s a logical next step for every person who has taken the time to curate a wishlist of clothing, home decor, recipes, and crafts to now be able to directly buy within the app. Pinterest is allowing the decision time to be shortened and making mobile purchases easier than ever.
One way that pinners can bring their dream closets or homes to life is to add an item directly to their Amazon Wishlist. Now, their Pinterest boards will be able to give them real prices, reviews, and recommendations. A retailer, in this case, Amazon, will know the correct items to market to the ideal customer with purchase intent data (their Pinterest board). Before, Pinterest users had a wealth of information on their likes and preferences at their fingertips with no intent being shown unless they clicked through. Someone could pin an image of a lamp that they liked and the retailer would never know that they had an interested shopper. Now there will be a connection of intent to marketers. All of this helps to further power the analytics and ability of e-commerce, but there is still a missing piece: the physical store experience.
E-commerce and M-commerce are becoming increasingly important in the retail world. However, there is no ignoring the fact that 90% of purchases take place in store. The majority of people would prefer to try on that sweater or sit on that couch before they could commit. For clothing specifically, 2% say they only shop online and 32% say they would never. While these are the two extremes, it is clear that online shopping does not account for the majority of sales. While it’s great to see new ideas coming to the table in e-commerce, we need a way to extend that Pinterest board into a store and make the journey continuous
This is not a completely new idea. A few years ago, Nordstrom dabbled in incorporating Pinterest into their physical stores in a rudimentary way. They placed icons next to featured items and would show what was most popular on Pinterest in analog fashion. This was simply a glorified way to show that their items were featured on Pinterest with no clear benefit to the shoppers or way to convert sales. In this next phase, Nordstrom will be one of the first users of buy buttons on their social platforms. With 42% of adult women on Pinterest, and 81% of Nordstrom’s sales occurring in store, we would love to see a combination of these two efforts.
A shopper’s Pinterest feed can provide them with recommendations which could be used as they walk through the store. If they were eyeing a blue dress from another store, Nordstrom could show a similar one. If they like what they are shown, items that go with it and recommendations could emerge as the shopper requests them. This could be done through a mobile app in which someone could login using their Pinterest account and have a unique and interactive shopping experience guiding them through the store. Staff across retailers could access a larger and singular source of continuously evolving preference and intent data. With all the focus on clienteling and CRM, a major downfall is still that the data resides in the walled garden of a single brand. Customers want their data to follow and have universal applicability across their journey. As Facebook became the nexus of social intent data, will there be a corollary platform that dominates retail intent? Many have tried, none have yet succeeded. A dominant factor to cracking the code will be integration of physical and digital retail intent.