The past year was a torrid one for Australia’s already under siege retail sector. Government shutdowns, coupled with a slowdown in consumer spending, pushed many once-thriving brands to the brink – and beyond.

Casualties of the coronavirus crisis include the likes of Jeanswest, Kikki K, Collette, Bardot and Curious Planet. Meanwhile, many other brands announced or accelerated plans to reduce their store footprints by closing unprofitable outlets.

But over in the digital sphere, business has never been brisker, with the pandemic triggering an extraordinary surge in online transactions. The NAB Online Retail Sales Index October 2020 showed year-on-year growth of 59.3 per cent, as consumers spent up big on groceries, liquor, takeaway food and homewares and appliances.

The shift to digital

With more of the customer journey taking place online, the onus is on retailers to build compelling digital experiences that will assist them to maintain strong customer relationships during the current period of uncertainty. 

The benefits of doing so are well understood – in all sorts of times. Personalised digital interactions have been proven to increase lifetime customer value by driving loyalty and retention.

More than 90 per cent of customers prefer to shop with brands that recognise and remember them, and which tailor their deals and recommendations to suit, according to Accenture research. Almost three quarters of survey respondents indicated they’d find a ‘living profile’ valuable, if it could be used to curate the products and experiences presented to them.

Bridging the technology gap

So, what’s prevented Australian retailers from going hell-for-leather to implement personalisation strategies long before now?

Among other things, a significant technology deficit. Only 50 per cent of companies polled by Forrester last year (2020) stated they had the software tools they needed to obtain a single or even partial view of the customer journey from end to end.

Moreover, those at the top appeared to have an overly optimistic view of the capability of their organisations to get personal with customers, using the tools and technologies currently in their repertoires. According to the survey, C suite executives were 25 per cent more likely to be confident in the completeness and accuracy of the customer profiles able to be generated, than business leaders a level of two down.

Marketers working at the coal face know all too well where the gap between expectation and reality lies. Digitisation has resulted in the creation of numerous touchpoints – think web pages, social media and point of sales systems, to name a few – all of which can be valuable sources of the customer data needed to drive a personalised marketing strategy. Very often, though, that data sits in siloes and is of variable quality. So much so that many marketing teams spend up to a third of their time managing data quality. That time could be better spent crafting personalised campaigns and experiences that keep customers coming back for more.

It’s a soluble problem but it’s not one that can solve itself. It calls for investment in technology that seamlessly integrates customer data and makes it possible for organisations to create rich, detailed profiles of their customers that are easy for marketers and other non-technical professionals to access and use.

In short, a Customer Data Platform (CDP). The term CDP is used to refer to a unified customer database that extracts data from multiple sources and cleanses and combines it to create a single customer profile. Today’s packaged CDP platforms are designed to ‘talk’ to other marketing systems; providing them with the intelligence they need to generate effective personalised marketing campaigns at scale.

Trading your way through turbulent times

The COVID crisis has hit Australia’s retail sector hard and boom times may be a long way off for many businesses, particularly those which rely on discretionary spending. Strengthening your relationship with your customer base via personalised marketing may help your brand survive today’s challenging conditions and position itself for growth, as the economy recovers.

Dave Newman is head of Australia and New Zealand for Twilio Segment