With the release of the 2018 Predictions at the end of last year, Forrester forecast an uncertain fate for retailers who were laggards in digital transformation and those immune to obsessing over customer experience. One without the other will result in an equally disappointing outcome.
In this blog, we discuss the top predictions affecting retailers in the Forrester report and how data science can help you overcome the challenges faced in 2018.
Customer experience is a top priority
In 2018, 30% of companies will see further declines in CX performance, and those declines will translate into a net loss of a point of growth.
Back in 2014, we wrote a blog on how Starbucks creates the perfect customer experience by:
- identifying customer problems and then seeing how they can solve them, and
- observing and responding to consumer trends in a way that fits in to and enhances their customers’ lifestyles.
In 2018, this is even more true with the customer experience more important than ever, and customer analytics becoming more prevalent and neccessary as companies are driven to identify new, innovative ways to interact with their customers.
Customer-focused technologies must ensure a positive and consistent experience at every point of interaction - whether through a call centre, website, or social channel - while also using these interactions to gather critical insights into how your customers think and act.
If you fail to align your offering and service to your customer needs and expectations, based on your customers’ data, your customers will take their business elsewhere.
Talent acquisition will be a game changer
Companies struggling to attract scarce and in-demand talent will spend up to 20% above the market rate to change the game.
Professionals with highly in demand skills want to work for companies who are digital leaders, where their skills are pushed to the limits and their knowledge grown. If your company doesn't technically qualify as a digital leader, it's not too late yet, and what better place to start than your HR processes?
If you have a large workforce, you should have a statistically significant amount of data on what makes a good employee at your company. And what doesn't. By profiling characteristics of current and past employees, your HR department could hire candidates , using data science to identify a successful and loyal employee. It will also enable you to identify which candidate is likely to be a bad fit. Using data science you are able to take a large portion of the guess work out of hiring.
Traditional retail should evolve
67% of retailers will be unprepared to exploit intelligent agents.
Not only should you be creating an omnichannel shopping experience, but you should be focussing on in-store experiences that cater to the millennial: no long lines and very personalised, to sum it up. Arming your store staff with tablets that is a POS but also has customer insights, will be an advantage. Having access to customer data will allow your team to greet a returning customer by name, ask if they still like the shoes they bought a month ago and whether they've seen the new selection of handbags that perfectly match those shoes. And then help them through the check-out process to purchase the bag, in the same aisle.
Introducing virtual reality in store, introducing in-app checkout and other innovative retail ideas should also be considered – but make sure to consult your customer data to get to know your customers and find out what you should introduce.
AI will influence buying decisions
In 2018, 10% of purchase decisions will be guided by a platform’s agent and start the real economic impact of empowered machines.
With chatbots becoming commonplace, more and more consumers are interacting with chatbots daily. The interaction generates a wealth of new information, and companies who own the chatbots are using this to their advantage. We recently wrote a blog that included an American mattress company’s chatbot for insomniacs. The purpose of the chatbot is to mimic real conversation in the early hour of the morning when said insomniacs are awake and alone. The chatbot collected cell phone numbers to send promotional messages to and generated $100 million in sales in the first year after launch.
Retailers need to get behind the AI revolution, whether it’s creative data-driven decisioning use or a more straightforward “show me your selection of high-heels” bot.
Customers will avoid the noise
Ad spend will be flat in 2018 and cause a painful correction in the agency and adtech markets.
As consumers expect more relevant marketing and are increasingly filtering out what they perceive to be intrusive, marketers need to realise the critical role data plays in delivering messaging that resonates. The only logical way to do this, is to take the time to listen to what your data is telling you about your customers and apply those insights to your customer retention and acquisition strategies, in channel preference, messaging and segmentation.
By being pro-actively innovative in meeting the ever-changing demands of customers, companies will thrive in 2018 with the help of data science. If you’re interested in finding out more, watch our video about the new world of data and how businesses can work wonders with data-driven insights.
About the Author, Jaco Rossouw
Jaco, CEO of Principa, has over 26 years of experience in the financial services industry specialising in Insurance, Retail and Banking. He is an analytical technologist at heart with a track record of delivering innovative business solutions over a wide geographical region from South Africa to the Middle East and Europe. He serves as leader, motivator and imagineer to one of the finest collections of data, business and computer scientists in South Africa. He holds a Bachelor of Science degree with majors in mathematics and computer science.