Retailers understand the importance of marketing to existing customers to drive loyalty, especially through digital channels. And with the cost of acquiring a new customer continuously increasing, they must balance the time and effort expended on existing customers versus sourcing new ones.
This means making sure brands are inspiring loyalty and growing the customer lifetime value. But that can be difficult, especially at a time when consumers are hopping from one website to another, and worldwide supply chain issues are forcing consumers to purchase goods from alternative merchants, challenging loyalty.
Personalisation and first-party data strategies are at the heart of Adobe’s strategy for the retail sector. The key is to inspire loyalty by delivering experiences tailored to the consumer. Larger retailers don’t necessarily have an advantage here. Our 2021 report, Failure to Scale: The State of Personalization in Retail and Travel, reveals that while large retailers have resources to drive personalisation, smaller retailers are also developing strategies in this regard.
The larger global retailers, such as Alibaba and Amazon, have major footprints and can devote significant resources to building customer loyalty through personalisation. But size is not everything: the grocery, personal care and apparel sectors, for example, benefit from the availability of abundant first-party data, along with high recency and frequency of customer orders and interactions. In contrast, retailers in sectors such as home appliances or consumer electronics may need to over-index at times on finding new customers, simply because activities like furnishing a new home or purchasing a new computer do not happen as often as grocery shopping.
Another aspect of building customer loyalty is recognising that it is not just about having an ‘earn and burn’ loyalty programme – one that enables customers to earn points and discounts, fly all over world, or go to hotels. We are seeing a paradigm shift, where ‘earn and burn’ is still part of the equation but there are other factors, including quality of service, quality of product, and personalised services that might make the customer feel more part of a community.
When it comes to fostering community, we see this happening with apparel brands’ efforts around sustainability. This feeds into another part of loyalty around behaviours and social consciousness. Consumers in the younger generation (joined more recently by other demographics) have indicated to us that if a brand is a little more conscious in how they manufacture or source their goods, they may attract more loyalty as a result. It’s no longer enough to say to these customers: if you patronise my brand, I will give you a discount somewhere along the line.
Adobe has identified the importance of first-party data, and of the unified customer profile and common data model that we are building on Microsoft Azure. We understand that to deliver on promises of loyalty – and even acquisition – it is critical to fully understand who the consumer is to deliver the best customer experience possible.
In this way, we are bringing the ability to understand the customer, attach pieces of content to that understanding, and then orchestrate the journey the consumer is going on. We know that this journey is no longer linear and moves back and forth from online to offline. This influences how we think about content management and moving content to the cloud, and to this end we are working closely with Microsoft on our capabilities in the cloud for content.
One organisation that is benefiting from this collaboration is Walgreens Boots Alliance (WBA), which is a shared customer of Adobe and Microsoft in the healthcare space. We have been working closely with the organisation to better understand the customer journey and drive customer lifetime value. This includes reimagining WBA’s approach to loyalty and how it can make high-quality, hyper-personal customer experiences available to every customer on every channel at a global scale.
Another customer we are working with is Dick’s Sporting Goods. We are helping the company with underlying data, enabling it to drive mass personalisation by using Adobe’s Experience Cloud. As a result, the retailer successfully introduced kerbside pickup of sporting equipment during the pandemic and is building customer lifetime value by tapping into the customer data platform built on the Microsoft platform.
At its heart, Adobe’s proposition for a unified customer profile is centred on the ability to deliver on our promise of better customer experiences, ready for checkout. What sets us apart in this regard is our proven ability to help organisations create different versions of content and make sure that it is delivered in real time to the consumer instore, online, or wherever the moment of truth may be.
Michael Klein is head of industry strategy for retail, travel and consumer packaged goods at Adobe Systems
This article was originally published in the Winter 21/22 issue of Technology Record. To get future issues delivered directly to your inbox, sign up for a free subscription.