In the evolving landscape of Retail and Direct-to-Consumer (DTC) business, the key to unlocking customer engagement and loyalty lies in your, often untapped, customer data.
Whilst the rise of AI is disrupting the retail industry and helping more brands tap into their data, there’s no replacement for getting hands-on with your customer data. In this article, we look at how AI and customer data can work together and why your customer data tells you more than tools can.
How are you talking to your customers? Is it more for you or them?
When communicating to customers, most brands have personalisation tools and dynamic email platforms that promise to make the right choices. These are definitely an improvement over static email, but they are only as good as the inputs you give them.
They often won't know who your best customers are for example, or which products lead to more loyal customers in the long run.
Even with these additional data points, most businesses are seasonally led, so the merchandising teams often take precedence over more data-led factors. For many, financial considerations also have an influence, focusing on profit or overstocks for example.
But by combining your own customer value segmentation with AI’s 'real time' view of the world, you can achieve standout results.
Before long, an AI platform will most likely balance all of these inputs but until then, what’s a pragmatic, proven route to success?
There’s no substitute for getting hands-on with your data
It’s only through your customer data, you can answer questions such as:
What should we sell to maximise profit or customers Lifetime Value?
Which products are not just profitable but also are great at telling your story (‘gateway products’) and introducing new product categories?
In aggregate, if a customer bought category A, which category are they next likely to shop in? (it’s often the same one again!)
By gaining a nuanced understanding of your customer behaviour and its impact on your business, you position yourself to get better results automated personalization tools.
Get the best of BOTH worlds
We recommend that you leverage BOTH the commercial intelligence of the business AND the power of AI personalisation or merchandising tools to better calibrate your reports and achieve the best overall results. The former is usually a value-based customer segmentation where each contact is scored and flagged according to past purchase behaviour and predicted future behaviour. Without this, you won’t know the right level effort or investment to make as customers are not all equal. This is the part YOU control, in contrast to the somewhat ‘black box’ nature of many personalisation tools. These flags can then be applied alongside the more real-time personalisation.
Want to get deeper into your customer data? Join one of our Teach-In webinars where we share how to better understand and apply your customer data to create more loyal customers and be more profitable. Find out more here: https://bit.ly/more2teachin