When Covid-19 was declared a global pandemic in January 2020, governments around the world imposed lockdowns, travel restrictions and strict social distancing measures in an effort to halt the spread of the virus. Many retailers were forced to close their physical stores to protect the health and safety of both their customers and their employees. At the same time, however, panicked shoppers sparked a surge in demand for food, beverages, household goods and various other essential products.
To remain operational and cater to customer demand, many retailers introduced new services to enable customers to purchase products online and either have them delivered directly to their houses, or safely pick them up outside a physical store. Now, as governments are beginning to lift social distancing restrictions around the world, many retailers are gradually beginning to reopen their physical stores and welcome customers back. However, they cannot simply go back to business as usual.
“Covid-19 has profoundly impacted the way we live our lives and many people will simply be too anxious to shop in physical stores in the same way they did before the pandemic, while others will simply have enjoyed the convenience of shopping online and receiving products at home,” says Greg Jones, director of business strategy for worldwide retail and consumer goods at Microsoft. “Consequently, services like home delivery, click-and-collect and kerbside pick-up will remain popular and there will likely be an uptick in new service requirements to cater for the changing customer forces with contactless or mobile payment options. Plus, we’ll likely see a rise in contactless shopping experiences, such as ‘scan and go’ services where customers can use an app on their smartphone to scan products as they go around the shop and pay digitally so they no longer have to queue at the checkout, interact with a cashier or touch card-readers.”
Navigating the post-Covid-19 era will be challenging, but the secret to long-term survival will be for retailers to identify which products, services and shopping experiences are now the most valuable to their customers and update their operational model accordingly.
“Retailers must create a ‘golden record’ of each customer by consolidating all of the information they have about each specific person, including their location, their age, how frequently they shop, what time of day they typically shop, which types of products they browse and purchase, their preferred interaction, payment and delivery methods, and much more,” says Jones. “Once they have this 360-degree overview of each customer, retailers know exactly who their customers are and they can easily personalise all interactions and ensure that product recommendations, promotional offers and marketing messages are fully relevant to the individuals who receive them. In addition, they can identify potential opportunities for further improving the individual’s shopping experience to make it as seamless and engaging as possible. This will boost both sales and loyalty.”
Jones recommends that retailers implement a customer data platform (CDP) with built-in analytics, machine learning and artificial intelligence (AI) capabilities, such as Microsoft Dynamics 365 Customer Insights.
“CDPs enable retailers to aggregate all their disparate data silos into one unified platform and use machine learning and AI to find patterns in their customer, sales and marketing information,” says Jones. “Having a single view of the customer is a little like having a data lake. It’s the most important step in the analytics journey, but it’s only the first step. Retailers must develop relevant and individualised actionable insights about their customers and desired customers. With a golden record in place, those insights and directed actions are acquired through AI and machine learning model development.”
Microsoft collaborates with an extensive network of partners – such as Adobe, Amperity, dunnhumby, Blue Yonder and Episerver – to provide retailers with end-to-end solutions that enable them to fully understand their customers and provide relevant and enjoyable customer experiences. “Together with these partners, Microsoft is playing a pivotal role in empowering retailers with the wide range of technologies they need to be able to rethink their operations and ensure that all marketing, sales, and service professionals can access the real-time insights they need to personalise every customer interaction,” says Jones.
One retailer that has successfully used technology from Microsoft and its partners to better understand its customers and deliver a personalised experience is online activewear retailer Fabletics.
“The company wanted to gain further insights to understand their customers behaviour and preferences bridging the physical and digital shopping experiences, so it opened more than 24 physical stores across the USA,” says Jones. “Each store is connected to the Microsoft Azure cloud to track how customers interacted with the products in stores. Fabletics used machine learning and AI to analyse customers’ behaviour, coining the phrase ‘brick mining’ to describe the emerging discipline. By extending consumer analytics from online to in-store, Fabletics’ store associates can cater to their returning customers’ size and style preferences – and build on their past purchases. Now, the company runs both digital and physical stores and uses insights from both to more closely align its product portfolio, inventories and services to its customers personal needs and preferences. Consequently, both sales and customer loyalty have increased.”
Implementing CDPs, AI, machine learning and other digital technologies to create a ‘golden record’ for every single customer will be essential for every retailer in the post-Covid-19 era, predicts Jones.
“Historically, every change retailers have made to the way they operate has been primarily driven by customer demand because they know that if they don’t provide the types of products, services and engagement channels consumers want, they will simply shop elsewhere,” says Jones. “Consumer and market demands will likely change rapidly in the current climate, but tools like Microsoft Dynamics 365 Customer Insights make it easy for retailers to deliver friction-free shopping experiences that feel as though they have been uniquely tailored to perfectly match each customer’s personal needs.”
We asked a selection of Microsoft partners about how they are helping retailers to better understand their customers and develop personalised shopping experiences that will drive sales and boost loyalty. Below are extracts from their responses, which you can read in full from page 126 of the digital edition of the Summer 2020 issue of The Record.
Wayne Snyder, vice president of retail strategy for EMEA at Blue Yonder, says: “Changing consumer behaviour resulting from Covid-19 makes long-term forecasting unpredictable and retailers must now focus on short-term agile reaction.”
David Clements, global retail director at dunnhumby, says: “Retailers must implement a share customer insight platform which supports better collaboration while generating new revenue streams.”
Alki Manias, global virtual reality lead at Kantar, says: “Agile virtual reality-enabled solutions are critical tools for retailers who want to quickly identify how their customers’ behaviour and purchase decisions are changing in the quickly evolving market landscape.”
Birger Klinke, senior consultant and project manager at ToolsGroup, says: “To deliver personalised experiences, retailers need supply chains that can handle extreme complexity, but are also simple to deploy and use, and can be quickly adapted to changing market conditions.”
Alex Atzberger, CEO of Episerver, says: “Episerver is offering a free Content Diagnostics package to help retailers (running on Episerver or any content management system) better understand customers’ real-time needs and personalise their digital content to ensure it resonates.”
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