Are you concerned by how much your takings are shrinking, as consumers continue to pull in their belts? You and just about every other retailer in the country.
Unfortunately, the upcoming financial year looks like being a pretty cheerless one, for Australian shopkeepers of all stripes. As interest rates, utility and insurance bills and the cost of everyday essentials continue to head north, Australians are cutting back their discretionary spending apace. Many are deferring or deciding against major purchases, looking for budget or second-hand options or ‘mending and making do’.
Earlier this year, the consumer confidence index sat below 80 for 14 weeks, its longest period at recession levels since inception, according to the Roy Morgan Update June 6, 2023: Consumer Confidence, Unemployment and Mortgage Stress.
Against that backdrop, retailers will need to work harder than ever to maintain or increase their share of the nation’s dwindling spend during FY2024.
Developing personalised marketing campaigns is one of the most effective ways for brands to strengthen relationships with buyers, build customer loyalty and boost sales, in all sorts of times.
Businesses that excel at it generate 40 per cent more revenue from their activities than average players, according to McKinsey research published in late 2021. What’s more, a whopping 71 per cent of customers now expect companies to deliver personalised interactions and 76 per cent become frustrated when that doesn’t happen.
What makes it happen is data and the aggregation of it – transactional, personal and behavioural – to create a holistic picture of each and every individual who’s spent money with a business.
To collate and manage these streams of data more effectively, a growing number of local retailers are investing in Customer Data Platforms (CDPs).
Powerful software that brings data together in one place, where it’s easily accessible by marketers, a CDP allows them to unleash data driven, personalised marketing, via the creation of a single customer view.
Retailers that have gone down this route are able to deliver highly personalised customer journeys at scale. Customers can be investigated, segmented and targeted via multiple channels, with well-timed and crafted messages that result in recommendations, referrals and sales.
Choosing top technology
But not all CDPs are created equal. Selecting the one best suited to your organisation’s needs is critical, if your business is to gain maximum value from its investment in this technology.
How easily, or otherwise, the platform you’re considering can be integrated with your existing software stack should be a key consideration. Many retailers are already awash with solutions that don’t connect or share information as well as they have initially thought in these circumstances, adding even more complexity into the mix makes it less likely new functionality will be exploited to its full potential. Hence, it can pay to select a CDP that’s compatible with a broad range of other platforms and programs.
The breadth and complexity of the data you collect should also be a factor in your decision making process. If sources are numerous and differ in format, a CDP with an “open data model” will be the best choice. And for retailers with both online and physical stores the CDP’s ability to merge offline and online data in real time is of critical importance as customers today expect instant and accurate communications.
Your company’s anticipated long-term growth is likely to come into the equation too. Yes, many retailers are happy to be merely holding steady in today’s straitened times. But adopting a CDP solution that can be readily scaled to meet additional demands will deliver exponential growth over the coming period.
It’s also vital to ensure the customer data you collect is handled appropriately and stored securely. In the current climate of rising cyber risk, horror tales of businesses that have been hacked or breached are legion.
The fall-out, both financial and reputational, for those that fall victim, can be damaging and long lasting. Fail to take appropriate care of customers’ personal information and they’re unlikely to remain loyal to your brand and business, irrespective of how compelling your offering may be.
Hence, it makes sense to implement a platform that offers optimum security. A dedicated CDP, for example, will allow valuable, first part data to be stored within an existing security perimeter, rather than on a cloud-based SaaS platform.
Surviving and thriving through the downturn
Retailers are in for a rough ride over the next 12 months and casualties of the spending slowdown are likely to be plentiful.
Personalised marketing campaigns may help your brand shore up sales and stay afloat until conditions improve, and customer data technology can make it possible to deliver those campaigns efficiently and economically.
Against that backdrop, investing in a flexible, scalable, secure CDP is likely to prove a very shrewd move.
Stephen Schwalger is business development director at n3 Hub.