Retail Transformation in the Middle East – Why You Need to Get Your Customer Data Architecture Right

Retail Transformation in the Middle East – Why You Need to Get Your Customer Data Architecture Right

This is a two-part series on how offline retailers in the Middle East can leverage the power of digital transformation to succeed through a customer-centric, data-driven mindset in the COVID-19 era

$2.1 trillion. – That’s how much of a loss the global retail industry is going to encounter in the current COVID-19 situation – in 2020 alone. That’s a de-growth of almost 10%. 

Sure – consumer behaviour is evolving, purchase patterns are undergoing a metamorphosis, and spending habits are throwing conventional trend analysis into a limbo.

In fact, according to the recent National Retail Federation (NRF) survey, some key consumer behavioural changes that have come to light during this time offer fast food-for-thought:

  • 9 in 10 consumers have changed their traditional shopping habits, due to COVID-19
  • More than half of the consumers have ordered products online that they would typically purchase at a physical store 
  • Nearly 6 in 10 consumers say they are worried about going to the store due to the fear of being infected  

But, it’s not all doom and gloom, if you’re in the offline retail business. It’s really not!

At such a time, you need to pivot to or strengthen your existing online business strategy.

Don’t look at this situation merely as a challenge; it’s a substantial opportunity to jumpstart a new growth engine, through your website or mobile app.

It also allows you to breathe new life into your O2O (Online-to-Offline) commerce model to be better positioned when the situation begins to approach some sense of normalcy. 

For context, the O2O commerce revolution gained momentum in 2016 when Jack Ma, Founder of Alibaba, spoke about the “New Retail” era driven by “the integration of online, offline, logistics, and data across a single value chain.”

Before you double-down on your efforts to turn your e-commerce website or mobile app into a conversion catalyst, you need to get your customer data architecture in place and firing on all cylinders.

Also Read: Is Growth Marketing the Answer to Budget Cuts?

What is Customer Data Architecture?

This defines how customer data would flow across various sources and channels within your organisation. It outlines how this data will be controlled and leveraged across functions.

Your CRM system would be one component of this elaborate architecture.

However, a simple CRM system has significant limitations. It would be best if you thought above and beyond to maximise the utility of your first-party data.

And, that’s where a Customer Data Platform (CDP) comes into the picture.

What is a Customer Data Platform?

Customer Data Platform (CDP) is pre-packaged and often configurable software that enables you to develop a unified, persistent, and real-time enriched view of individual customers.

This is facilitated by data from interactions across sources (both offline and online), platforms, channels, and devices. 

A CDP ensures that your customer data doesn’t exist in silos and flows across and interacts with such data across systems within the overarching architecture.

Couple this with a powerful delivery engine, such as a multi-channel marketing automation platform, and you can unlock the power of delivering personalised customer experiences at scale.

Also Read: CDP Alone Won’t Solve Your Data Problems

Why Do You Need a Unified Customer View?

1. Understand your digital customers better: Even a basic CDP will help you capture and collate the following critical first-party customer-specific data-points:

  • Demographics: Name, age, gender, customer type 
  • Geolocation: Location, IP address, timezone, etc.
  • Technographic (device-related): Device type and model, OS, browser version, etc.
  • Behavioural: Products viewed, clicked-on, added to wishlist or cart, products purchased, recency and frequency of purchase, average time spent per shopping session, average order value, responses to marketing campaigns across email, push notifications, SMS, etc.

2. Combine both in-store and online data-points:

The essence of an omnichannel shopping experience lies in extending a similar customer experience across all channels and platforms.

And, for that to happen your in-store and online data-points for the same customer have to be combined to enrich the unified view further.

  • What products did a particular customer purchase in your retail outlet? 
  • What mode of payment did your customer use? 
  • Is your customer part of your loyalty program? Do your customers prefer shopping in-store more during sales?

Consolidate all such relevant data-points into a single source of truth that will equip you with the foundation to better understand and service your customers with speed, context, relevance, and value.

3. Improve customer segmentation and develop a personalisation strategy:

Once you have a unified view on every individual customer, you can analyse and segment your customers based on both attributes (geolocation, iPhone vs. Android smartphone, etc.) and activities (customer actions and inactions).

You can then craft and deliver 1:1 contextual experiences across your website, mobile app, and marketing channels. 

Hyper-personalisation in terms of relevant product and content recommendations, the right channels and send-times – tailor-made to individual customers will then become the springboard towards re-growth for you.

What Next?

In my next post I will outline how you can develop and deploy an effective personalisation strategy.

But, a personalisation strategy is only as good as the customer data you gather, consolidate, and mine for granular insights.

So, get started today, because you know what they say:

“All change is hard at first, messy in the middle, but glorious in the end.”