Customer journey analytics: Mining behavioral data to boost retail sales
Customer journey analytics examines an increasingly complex path in the modern retail landscape. Today's typical path to purchase includes not only in-store interactions, but also online research and browsing, as well as mobile actions. Research shows that 56 percent of modern customer engagements take place over multiple days across multiple channels.
This evolving journey from initial interaction to purchase makes it hard for retailers to gain definitive insights on consumers. According to eMarketer, 35 percent of marketers admit that they don't understand the customer journey and more than 60 percent said their incomplete data prevents them from personalizing communications.
For this reason, retailers are increasingly turning to data analytics for a nuanced read on shoppers' distinct purchasing paths. Companies that tap into insights from behavioral data have the opportunity to customize merchandise offers, drive store loyalty and boost sales and profit margins.
Behavioral data and other customer analytics can be extremely influential when retailers are revamping marketing or operational strategies, yet many companies still struggle to effectively gather and parse this information.
"Many [retailers] still do not leverage customer analytics for operational decisions, often because of a lack of fully integrated customer data as well as integration into other operational data," Dave Nash, director of customer experience at West Monroe Partners, explained to CMSWire.
Companies need a solution that allows them to collect data through all steps of the buying journey, from the first brand interaction to online browsing, social media interactions, mobile application use and ultimately purchase, whether it's online or in store. Only by aggregating and analyzing this information will retailers be able to fully map purchase paths. As a result, many organizations are adopting advanced customer journey analytics solutions.
Using customer journey analytics to build personal relationships
To engender a warm, welcoming feeling with shoppers, Kroger is taking a granular approach to customer journey analytics. The retailer has set out to create the kind of personalized service that one would find at a local butcher who knows regular customers by name. It's no small feat for one of the nation's biggest grocery chains, which grosses over $100 billion in annual sales. The supermarket now seeks to understand how its customers shop on an individual basis versus by consumer segments, according to SmartBlogs, in a bid to deliver personalized offers, prices and promotions.
Kroger is taking this on via what it dubs the "personalization trifecta," which includes big data, customer science and technology. The goal is to build a profile of each shopper that reflects their buying habits, preferences and demographic information to elevate the shopping experience, Matt Thompson, vice president of digital business for Kroger, said at the National Retail Federation's Big Show, according to the source.
Kroger's online Savings Center has since been tailored to individual users: Its mobile coupons offer a curated list of promotions based on items in the consumer's mobile shopping list, and the retailer knows which of its shoppers are still paper circular fans and sends them coupons accordingly.
Visible benefits from thorough analytics
This type of data-driven strategy has proven beneficial to early adopters in the retail space. For instance, U.K. based home and garden retailer Homebase recently began tracking customer journey analytics so it could better anticipate consumer needs across all of its channels. Forbes explains that since implementing this strategy, Homebase has experienced double-digit sales growth via digital channels and seen a 30 percent increase in website visitors.
When retailers are able to more accurately map typical customer journeys across all modern communication channels, they will likely experience significant benefits in terms of customer acquisition and retention, which then result in higher sales and a more competitive stance in the industry.
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