While retailers are
becoming increasingly adept at collecting and using data to sharpen their marketing, they still say they’re stumbling when it comes to effective strategies for engagement and discovery. In a
recent survey of 500 retail executives around the world, Deloitte finds that stores say these two areas are most problematic. Kevin Hogan, Deloitte’s engagement management director, tells
Marketing Daily what the smartest brands are doing right.
Q. Why is it so tough for retailers to find ways to engage with customers?
A. In the past, they were likely to think that adding a new website, redesigning it or maybe creating a mobile app was enough. But it’s becoming clearer that what’s missing is a better use of data. Who owns it? Where is it siloed? How is it integrated? Too often, they’re pushing out campaigns based on the most macro use of data, and they just don’t hit the mark. The brands that are winning are doing so because they’re using data on micro-segments, which means they can talk to consumers in ways that other brands can’t. They’re creating contextual conversations.
Q. Which brands are doing best?
A. Retailers reporting a revenue increase of 10% or more last year are those focusing on data at nearly twice the rate as underperformers. The Home Depot is one, and it’s adapting digital technology in many ways, right down to finding someone in an orange apron in its stores. Walmart is doing a better job, too, getting very hyper-interactive in some ways. Target is also coming along, and Nordstrom, in the luxury space, is as well. We see tremendous opportunities for big-box stores, as well as luxury.
Q. What kind of opportunities?
A. The big thing is reaching out beyond pushing a product and creating an experience that’s about the brand, not the sale. For example, retailers can use AI to build some canned stories that can enable them to reach out in a new way. Instead of just blasting emails that say, ‘Buy this,’ service reps could contact consumers and say, ‘Some people have reported problems with this shoe—how is yours holding up?’ The experience becomes about advocating for the brand, not just selling something.
Q. What are the issues behind product discovery?
A. Again, retailers struggle to understand the difference between someone just wanting to buy a product, and someone wanting to discover a brand and its purpose and learn more about it. Those are people with very different motivations, even if they are in the same demographic. Again, AI needs to be used better in this way, to tailor messages and experiences. This is a key way to build loyalty. Too many retailers still want to craft a one-size-fits-all message, and it isn’t working.
Q. What are some examples of purpose?
A. We’re seeing Nike do more about social issues. But brands could communicate this much more effectively. Target, for example, is committed to community involvement. It could let people know more about what it does locally, integrating that with the online experience. Pushing those purpose messages can drive brand loyalty. And ultimately, we hypothesize, it will also move the needle on sales. But all this requires using data a little differently, to discover what matters most to people.
Q. So what should retailers try and do differently?
A. It’s not one thing. When we look at this elite group, we see that the elite performers are using a multi-pronged approach, looking for ways to link marketing, commerce, and service effectively, to create a unified experience. It’s not so much about product sales, but about brands, and they’re trying to weave all this together. That’s the blueprint retailers should follow.