Company News • 06.02.2013
Top 3 benefits of retailer-supplier cross-channel data sharing
While collecting and mining data for useful insights is an important part of the retail environment today, many retailers and suppliers have discovered the advantages of sharing this data with each other. We have previously discussed the benefits of retailers sharing downstream data and predictive analytics with suppliers – but what about cross-channel data?
Traditionally, shopping revolved around the concept of customers visiting brick-and-mortar stores. Today, shoppers no longer restrict themselves to shopping through a single channel – it’s all about developing the shopping experience over different online, offline and mobile channels resulting in a truly cross-channel shopping environment. IDC data shows that multi-channel customers spend 15% to 30% more than single-channel customers, and additional data reveals that omni-channel customers spend 15% to 30% above multi-channel customers. So it’s no surprise that retailers and suppliers are “laser-focused” on understanding customers better to improve the shopping experience – and sharing cross-channel data is the key to revving up the next-gen retail engine!
Today, shoppers no longer restrict themselves to shopping through a single channel – it’s all about developing the shopping experience over different online, offline and mobile channels resulting in a truly cross-channel shopping environment
Cross-channel data is deeply connected to concept of building a loyal customer base. Customers don’t consciously think about channels when they shop – more often than not, the customer is more interested in the brand than the channel. This signals that cross-channel shopping is the means by which retailers need to enhance the overall shopping experience, thereby using it to increase loyalty and brand value.
So are retailers and suppliers sharing cross-channel and loyalty data? What benefits can they get out of this collaboration?
Improved and optimized allocation of resources
The CGT/RIS Retailer Supplier Shared Data Study 2012 reveals that more than one third of the retailers surveyed have reported significant ROI from sharing data, and that many are now investing in more sophisticated technology to enable this sharing. Such collaboration is leading to advanced supply-chain solutions that consolidate and leverage cross-channel data. This results in both retailers and suppliers having better visibility into the different channels to optimize the allocation of resources between them, all the while working towards the consumer experience while streamlining operations, optimizing inventory and increasing profitability. This differs from traditional supply-chain mechanisms which work independently and in a siloed fashion, providing no ‘big picture’ to connect activities like merchandizing, assortment planning, pricing, replenishment, sourcing and logistics through a unified plan of action across different channels.
It might make strategic sense for a supplier or manufacturer to use the shared cross channel data and play a larger role in shipping their products directly to consumers in small packages instead of sending truckloads to a regional retail distribution center
For example, the logistics area of the supply chain can be revolutionized by retailers sharing cross-channel data with suppliers especially because it makes up three quarters of overall supply chain costs. Therefore, it might make strategic sense for a supplier or manufacturer to use the shared cross channel data and play a larger role in shipping their products directly to consumers in small packages instead of sending truckloads to a regional retail distribution center — and then making retailers responsible for delivering products across all their channels, including in-store and at-home deliveries.
Smoother running loyalty programs
A large part of running a successful loyalty program revolves around a retailer’s ability to accelerate customer engagement and experience using insights from their loyalty program. Suppliers also stand to gain when retailers share this loyalty data with them, especially when consumers also expect loyalty offers to be consistent across all channels — right from an offer creation, delivery, and redemption standpoint. However, the CGT/RIS Retailer Supplier Shared Data Study 2012 reveals that loyalty card data sharing is down again this year, as only 27% of suppliers reported receiving it from retailers. What is causing this decline? Retailers are hesitant about releasing what they consider proprietary data.
Suppliers also stand to gain when retailers share this loyalty data with them, especially when consumers also expect loyalty offers to be consistent across all channels — right from an offer creation, delivery, and redemption standpoint.
According to Aberdeen’s January 2012 Omni-Channel Retail Experience, 42% of survey respondents stated that a “top omni-channel pressure is the consumer expectation of a similar experience regardless of channel. Inconsistent branding or disjointed offers can lead to consumer confusion (about the brand or offer), disenchantment, and eventually, desertion”. The solution to this is for retailers to adopt a cross-channel, centralized loyalty platform which encompasses consumer insights, offer creation, offer redemption, and performance metrics reporting. This can aggregate information across all channels of operation, with a single view of the customer and their purchase and interaction behavior. These insights can then be used to maintain tailored loyalty offers depending on the type of customer the retailer is targeting: lapsed, high spending threshold, high discount percent, etc
So how do suppliers stand to benefit from this shared, cross-channel loyalty data? The example of Sainsbury’s offering its suppliers free access to loyalty card data and analysis shows that it recognizes that suppliers gain greater insight into customer requirements. Sainsbury’s uses data from its “Nectar” loyalty card program to provide suppliers in-depth analysis of customer purchasing trends.
“By providing suppliers with this information, we enable them to develop products that put the customer even closer to the heart of our business and theirs,” said Andrew Ground, Sainsbury’s customer marketing director.
Sainsbury’s uses data from its “Nectar” loyalty card program to provide suppliers in-depth analysis of customer purchasing trends.
While customer names, addresses and other such personal data are not released, suppliers have access to data like repeat purchase rate of products, profiles of customers purchasing particular products, the most appropriate promotional tools to attract customers and which channels customers favor while shopping. One example the chain cited for wine suppliers is that people who buy dishwater tablets are more likely to buy wine (wine drinkers have a lot more glasses to clean). This kind of insight could be helpful for suppliers to plan promotions and marketing campaigns to target potential new customers.
More nuanced, personalized cross-channel processes
Omni-channel marketing is constantly around us, whether its print, online, broadcast, mobile, retail point-of-sale, gaming, kiosk, outdoor, direct mail and social media. Retailers can develop and share valuable ‘insights’ with suppliers to generate additional revenue.
In a hypothetical situation, a supplier of hair products could devise a shampoo targeted at a set of customers with specific characteristics who typically buy its brand of hair shampoo. How can this be done? By accessing cross-channel data supplied by retailers. Information that can help here is customer demographics, product preferences, combination preferences etc.
Suppliers will also benefit from retailers sharing cross-channel content and customer feedback that can enhance the consumer’s relationship with a brand, as well as the customers’ understanding the full breadth of a product offering. The top two drivers for using social media tools by both retailers and manufacturers are to gather feedback from customers and increase awareness of products and services – according to the IDC Global Technology and Industry Research Organization IT Survey, 2012 55.8% of CG manufacturers saw social media data as an avenue for gathering feedback from customers on products and services/engage customers more deeply
Suppliers will also benefit from retailers sharing cross-channel content and customer feedback that can enhance the consumer’s relationship with a brand, as well as the customers’ understanding the full breadth of a product offering.
Retailers should share cross-channel data like sentiments being shared on social media platforms like Facebook, Twitter and LinkedIn so that manufacturers can modify descriptive content about products, product reviews, and even go-to-market efforts that incorporate social and e-commerce tactics.
WC1H 9BB London