The advantage of customer intelligence and what retailers can learn from House of Fraser
Another day, another high street stalwart closing some of its doors. With a deal now struck with creditors, House of Fraser’s plan to cut half of its brick-and-mortar stores is going ahead, making it the latest to fall prey to increasing pressure on our town centres. In light of this latest example, retailers should be looking carefully at the steps they must take now to avoid meeting the same fate in future.
Today’s retail landscape requires orchestration of multiple channels and a strategy that unifies both an online and offline approach. Carrying a broad assortment, House of Fraser previously maintained success by positioning itself as a go-to store for all manner of products. However, with customer demographic change increasingly impacting loyalty, historical behavioural trends alone have ever-decreasing relevance to a multi-category retailer.
This factor is compounded by increased choice, including competition from brands themselves, whose desire to own the cross channel customer interaction and associated data is motivating more strategies to woo customers directly, with obvious implications for multi-category retailers like House of Fraser. With brands providing an increasingly seamless path-to-purchase both online and offline and a brand identity that’s pronounced, compelling and authentic, any USP that House of Fraser had in this arena can dissolve at breakneck speed.
Retailers in 2018 need to be able to extend the success of their physical stores into their digital marketing approach and vice versa. To execute this effectively, marketers must look to a cross-channel strategy that engages customers with personalised interactions based on defined audience segments. Providing this experience requires marketers to know and truly understand who their customers are, why they’re there and how they are evolving.
House of Fraser has struggled on multiple fronts – from an inability to keep pace with changes in shopper habits and consumer culture, a lack of differentiation and difficulty around a re-launch of its ecommerce platform. The aggregation of these factors are fundamental to House of Fraser’s struggle to create a compelling omnichannel customer experience, which has ultimately led to the impact on brick-and-mortar stores.
Had House of Fraser utilised first-party data and embraced personalisation in a different way at an earlier point, one could argue that the current state might have taken an alternative course. In this scenario, the webstore could have presented not only a place to purchase, but also supported a deeper data-driven connection with both established and would-be customers through personalised engagement, which through relevance and timing affirms both identity of the store, differentiation of service and perceived value to the customer. By leveraging their first-party data in this way, House of Fraser would have been able to understand customer behaviour, preferences and intentions and could have used this to shape many elements of their strategy, including their combined online and offline marketing efforts.
Today, the website is not just another transactional channel, it’s every retailer’s essential tool for marketing, reconnaissance and strategy. Used correctly, it can drive footfall to physical stores as well as deliver a rich seam of customer intelligence around what those stores should look like, feel like, and provide. For example, geolocation data could have been used to share personalised content about a local House of Fraser store, perhaps linked with a cross channel promotion or campaign based on browsing insight and understanding of intent.
Using first-party data in combination with CRM data is also a really powerful mix in helping marketers refine channel strategy and drive customer experience, as well as optimise a differentiated strategy around other components including (but not limited to) delivery, returns and customers service (e.g. chat and contact centre) options. This can be directed in a way that not just wins new, but also builds loyalty with existing customers, managing the potentially fickle traits of today’s retail landscape.
A focus that puts the individual customer at the centre of a first-party data driven approach across website, wider digital strategy including digital advertising and of course the store itself, will remain the key to building customer loyalty. With consumer culture and shopper habits evolving at a rapid pace, the ability to deploy an effective omnichannel marketing strategy will be essential, especially for multicategory retailers, as they continue to compete with wider customer choice, including from the brands themselves.
Using customer intelligence in this way to create a seamless and polished customer experience across channels represents not only the future of online retail, but of the British high street too.