Customer Experience in a Multichannel World

By Amy Klaris and Greg Ellis

Best Practices from Kurt Salmon

The Customer Experience Imperative In Kurt Salmon’s recent conversations with leading retailers, two topics come up repeatedly: customer experience and multichannel. Over the past decade, the two concepts have broadened in definition and become inextricably linked. More importantly, retailers increasingly understand that they must address both in order to win in today’s new retail environment.

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Over the last century, the retail industry has experienced dramatic changes. In the beginning, consumer demand far outpaced producer supply. After World War II, the tide began to shift as manufacturing and distribution significantly expanded.
Now the consumer has the power.

Today a shopper can find essentially the same product in many different retail outlets. She can quickly find out where she can buy the product and where she can get the best price. She can have that product brought to her and taken away if it doesn’t work. Then she can easily tell all her friends about the great deal she found and the great experience she had.

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The Five Deadly Sins of Clustering

How to Avoid the Common Mistakes of Store Grouping

Best Practices from Kurt Salmon

Clustering is in fashion among retailers—and for good reason. This not-so-new concept, which groups stores based on shared demographics and customer purchasing patterns, can take on new value as retailers look to localization to differentiate themselves and improve performance.

The Robin ReportFor years, retailers have been limited in their ability to accurately cluster stores by three overarching hurdles that are now disappearing. The first hurdle, data storage limitations, can be easily overcome as the price of data storage continues to drop and retailers find themselves with the detailed transactional data required for clustering analysis. The second hurdle, analytical horsepower, is also no longer an obstacle, as most PCs are now capable of the iterative, detailed analysis required to analyze the data. Finally, lack of detailed consumer data required for developing truly descriptive store clusters is no longer a problem, since detailed demographic and psychographic information is now readily available from a variety of sources.

But even with the elimination of these roadblocks, some retailers are not maximizing the value of a solid clustering strategy. We have found that these retailers have access to all the necessary data, both internal and external, and possess the analytical tools to perform the analysis, but consistently limit the effectiveness of clustering by making five critical mistakes.

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From Casual Chatter to Decider-In-Chief

Social Media Can Lead Your Way

Best Practices from Kurt Salmon Associates

How can a retailer strategically leverage social media intelligence into internal decision-making?

Here’s an example. Evaluate a retailer’s current market research activities. Replace many of the costly and time-consuming focus groups, customer surveys and ethnographic research with social media campaigns to get the same information even faster.

Banana Republic has taken a cue from software companies that pioneered the concept of taking advantage of their fans and followers to test beta versions before public release. Through a special portal for its invitation-only Insiders BR panel, the retailer solicits feedback on products, advertising and brand experience from thousands of its most loyal customers.

In Kurt Salmon’s work with clients, we see increased focus on becoming smarter about customer trends throughout the marketing, merchandise planning and product development processes.

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One Size Doesn’t Fit All

The Robin ReportThroughout the year, Kurt Salmon Associates has discussed numerous localization topics with the industry’s leading retailers. Not surprisingly, a few key themes emerged from nearly all the conversations we had with top executives. Regardless of industry segment or brand positioning, there are three key insights for successfully implementing a localization strategy. Here is what we found.

  1. It’s all about the local customer.
  2. Localization involves more than just merchandising and inventory management.
  3. It’s easier said than done.

Localization touches all the key drivers of a retailer’s business. Because of this, it can be remarkably powerful in yielding benefits across key financial metrics. Retailers have begun to realize the importance of integrating consumer insights into the business from top to bottom, and many leading players have already begun to implement localization strategies. They are designing new processes, developing new tools (from spreadsheet solutions to more sophisticated, customized software packages) and tailoring their organizations to clarify ownership over new responsibilities. However, localization can also be incredibly complicated and difficult to implement successfully, requiring supporting tools, organization and new processes. Ultimately, it will involve collecting and integrating disparate data, analyzing it to develop real insights, and finally to feed that intelligence back through the operations. [Read more…]