TheRetailer_Summer_19

Changing the future of retail with data

FREDRIK NEUMANN VICE PRESIDENT SALES RETAIL Wirecard

ENGAGING WITH TODAY’S CROSS-CHANNEL SHOPPERS ON THEIR TERMS Retail is in the process of reinventing itself, and retailers who adjust their sales strategies and react to their customers’ needs will be future-proof with a solid loyal customer base. Today’s shoppers are highly connected, switching between nearly 10 channels and numerous devices when shopping.¹ Customers need to be engaged with, and their needs don’t only have to be met, but anticipated. How can retailers keep up with consumers’ constantly evolving tastes and demands? The answer is in the data. Data-driven retail enables the perfect tailored offering and aligned customer experience. A true unified commerce experience, which unlike omnichannel, collates data from multiple channels onto a single platform in real-time, can only be achieved by capturing, analysing, and understanding data that customers provide with their shopping behaviour, payment preferences, and participation in loyalty programmes. Most modern retailers already possess these bits of information, but have yet to take full advantage it. Predict the future by analysing and understanding past behaviour Shoppers should have the freedom to shop whenever, wherever, and however they prefer. This includes having the freedom to pay with their preferred payment method, pick up their purchased goods at a time and place that is most convenient to them, and participate in relevant and worthwhile loyalty programmes. As a result, retailers need to meet customers where they are and on their terms. In the UK, accepting card and contactless payments is close to standard, which means that shoppers expect to be able to pay with their preferred payment method in most, if not all, shopping scenarios. Even before considering additional systems which capture data, retailers can already gain insights into repeat customers’ purchasing behaviour and preferences by analysing payment data. Value-added services, including loyalty programmes, vouchers and gift cards, which leverage on analytics in the backend, offer benefits to both customers and retailers. Analytics-based value-added services allow retailers to better understand their customers, and as a result, offer an extra service that adds true value to the shopping experience.

Retailers first need to capture agreed-upon customer data, for example through a loyalty programme, and then need to analyse and understand it. Information such as preferred payment methods, purchasing behaviour and patterns, as well as brand preferences allows retailers to target each individual customer based on their unique behaviour. With this valuable data on hand, customers can be sent individualised offers, at the right time, and via their preferred channel. Customers benefit from relevant offers, and reward retailers with their loyalty. Data on purchasing and returning habits can also help retailers know when flexible shopping services are needed, such as click and collect or “buy online, return in store”. Click and collect is already being offered by 64% of UK retail chains, but only 58% allow the in-store return of items bought online.² Regardless, most shoppers prefer to return items in-store, meaning that they no longer differentiate between the online experience and the in-store one.³ Retailers have long struggled to merge the various channels needed to meet their customers wherever they decide to make a purchase, whether that be via an online shop, a mobile app or in-store. However, demand for these services is increasing and the benefits of offering them are clear: Wirecard merchants who introduced click and collect reported a growth in online sales of up to 30%. Analysing customer behaviour can also help retailers understand customer churn, and reactivate customers before they are lost. The better the purchasing patterns of customers is known, the better one can identify unusual or changed behaviour.

¹ Salesforces Research, Trends in Retail and Consumer Goods Marketing, March 5 2019: https://c1.sfdcstatic.com/content/dam/web/en_us/www/assets/pdf/reports/salesforce-state-of-marketing- research-retail.pdf ² Statista, Multichannel capabilities of retail chains in the United Kingdom (UK) as of October 2018, May 2 2019: https://www.statista.com/statistics/984786/multichannel-capabilities-of-uk- retailers/. ³ Publicis Sapient and Salesforce, Shopper-First Retailing, 2018: https://www.publicissapient.com/insights/shopper-first-retailing ⁴ Statista, Omnichannel aspects retailers are prioritizing in the United Kingdom (UK) in 2018, April 4 2019: https://www.statista.com/statistics/987776/omnichannel-retailers-areas-of-prioritization- uk/ ⁵ Salesforces Research, Trends in Retail and Consumer Goods Marketing, March 5 2019: https://c1.sfdcstatic.com/content/dam/web/en_us/www/assets/pdf/reports/salesforce-state-of-marketing- research-retail.pdf

12 | summer 2019 | the retailer