The holiday season is officially here, and this year it promises to be unlike anything we have experienced before. The 2019 holiday season sales benchmark was overshot by half a billion dollars in May 2020, or after the first three months the global pandemic had struck. If this trend persists, the close of this year could be a potential treasure trove for retailers and marketers.
However, to succeed this holiday season, they will need to proactively gauge the pulse of customers and quickly respond to changing spending behaviors. Bolstering last-mile deliveries, offering easy returns, and adopting a strategic approach toward order fulfillment would be critical. As more and more customers adopt online buying – contactless shopping curbside pickups, and seamless digital payment options will also become significant.
With an expected 25% surge in online holiday sales this year, it is a greenfield opportunity for retailers to pitch products and services that speak to customers beyond the virtual-real divide. Retailers who can aggregate customer data, track online customer behavior, and convert it into actionable insights will have a clear advantage in the coming months. But how can retailers unlock this advantage?
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Enter, Customer Data Platforms
Customer Data Platforms (CDPs) unify a company’s customer data from multiple channels to enable customer profiling and better targeting of messages and offers. Since they help retailers put together a customer persona from first, second and third-party data, CDPs play a crucial role in humanizing customers beyond data points. This enables marketing teams to really get to know their customers with insights into customer mood, preferences, and spending behavior. In turn, these insights help make sales pitches successful by taking the right product to the right customer at the right time.
By breaking down data silos, CDPs help create accurate target audiences and segmentation groups. This goes a long way in orchestrating narrative-driven marketing campaigns. It also helps brands and marketing teams cut through the noise and tap into the potential customer base with a higher chance of conversions. For instance, Nike made its workout app subscription-free for a limited period to target new health-savvy customers during the lockdown. It also extended its message for at-home fitness to podcasts and other brand communications – creating a seamless narrative across channels. This helped the brand zero-in on a new customer base that can be nurtured and engaged with curated offers and products.
With embedded analytics, CDPs help marketing teams build enduring customer relationships and drive cross-channel, hyper-personalized campaigns across web, mobile, and social media.
Translating Emotions to Sales Numbers
With CDPs, retailers and marketing teams exercise higher control on how their products are viewed, ensuring faster and effective conversion.
For the 2020 holiday season, retailers leveraging CDPs can expect to drive higher sales with:
- Personalized campaigns: Customers today don’t just buy products and services; they buy brand narratives and stories that resonate with them on a personal level. To create compelling narratives, marketing teams need to mine customer data and create accurate customer personas. As a single source of customer truth, CDPs can be instrumental in creating customer profiles for targeted sales pitches and segmentation. For instance, retailers can strengthen one-to-one communication channels (such as e-mails) by addressing customers by their first names and offering tailor-made suggestions/recommendations based on past purchases.
- Contextualized engagement: CDPs enhance a customer profile with a context (such as demographics, preferences and motivations/attitudes), helping retailers go a step further than personalization. Most of this context-building is real-time, facilitating better customer segmentation. This can be channelized by marketing teams to shape campaigns. For instance, retailers can pitch product categories based on price-points to customers as per their spending appetite.
- Omnichannel consistency: With COVID-19, mobile has emerged as a dominant mode for online shopping, clocking a 10% increase in e-commerce orders across the U.S. in May this year. And as customer touchpoints shrink down to hand-held and smart devices, it is important to ensure consistency in content, user experience, and accessibility. Here, CDPs can help marketing teams segregate customer groups as per the shopping channel and target ads or promotional material for higher reach or click-through rates.
- Enhanced fulfillment: With decreasing in-store footfalls and an uptick in online shopping, retailers would need to reimagine inventory, supply chains, and last-mile deliveries. The focus should shift toward ensuring accelerated deliveries, proactively sharing delivery updates, and facilitating new modes of order pickups (such as BOPIS – buy online pickup in-store). With CDPs, retailers can target customers as per pin codes and store location, payment patterns (credit cards or loyalty points), and spending history; and offer last-minute cart additions to confirmed orders, bringing down multiple delivery trips.
The Last Word
The shift from brick-and-mortar to online shopping is evident, more so due to the pandemic, but the business model of retail hasn’t really changed. Retailers still need to know their customers, albeit through the virtual-real divide, and transact in a way that incrementally builds relations and trust. CDPs bridge the gap between customer data and customer personas, helping retailers and marketing teams leverage the two to make meaningful sales pitches. For the holiday season this year, CDPs could be the catalyst that enables marketing teams to filter the noise and target messages that strike a chord.
Shashin Shah is CEO of Pimcore Global Services, an open-source platform for product information management (PIM/MDM), digital asset management (DAM), content management system (CMS), and eCommerce. In his over 20 years of experience, both globally and in the US, he has managed large enterprise clients through strategizing, operating, consulting, and carrying out implementations worth USD 100M+ via global delivery models across several industries.