RESEARCH & INSIGHTS
Applying customer-centric insights for sustainable competitive advantage
The retail industry is growing ever more intense and diverse. Traditional retailers must now compete with alternative formats, such as ultra-low-cost retailers like Aldi; and with specialists, like Whole Foods and Trader Joe’s. Amazon now ships groceries and is opening more distribution centers closer to main population centers. Add dollar stores and big-box players to the mix, and the marketplace of just a decade or two ago seems cast in the amber of mom-and-pop grocers with their wooden placard signs.
In this whitepaper, we reveal why early efforts to shift towards shopper-centricity have been unsuccessful, and present solutions for how these challenges can be overcome. The key questions explored answered include:
• How do you implement a systematic and comprehensive approach to understanding individual shopper needs at detailed levels in an always-on, dynamic manner? and
• How do you incorporate insights into daily decisions to build toward a shopper-centric approach that provides sustainable competitive advantage without risking shorter-term objectives?
To access our recommendations for implementing a shopper-centric approach, download the full whitepaper.
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I once wrote that one of a business leader’s most valuable assets is also the least likely to be quantified. How does a chief accountant measure what inspires a customer?
The answer, I now am finding, is that the chief accountant does not. Rather, a new role is being created for that job – the chief data officer – and it may become one of the most important positions in the c-suite.
Consider that Americans are enrolled in more than 2.65 billion loyalty programs – 22 per household – but participate in less than half, according to loyalty researcher COLLOQUY. As marketers, we strive to engage consumers, but still have no hard evidence of their underlying commitment to our brands and services; no formula that measures bottom-line growth or cash flow can reveal customer loyalty.
But that may change, according to recent research by Gartner. The information technology consultant predicts 25 percent of all large global companies will have someone dedicated to the role of data oversight by next year. Here are five facts Gartner shares about these CDOs:
The role is growing to the power of 10: More than 100 chief data officers – that specific job title – work at large organizations today. That’s more than double the number Gartner counted in 2012.
Finance and government lead the way: The role of the chief data officer is most prevalent among banking, government and insurance entities, in that order. That said, Gartner is now seeing an uptick of CDOs in other industries.
Most are in the United States: While there are now chief data officers in more than a dozen countries, most of them – 65 percent – are in the United States. The United Kingdom accounts for 20 percent.
New York and the capital corner the U.S. market: More than a quarter of U.S. chief data officers work in New York or Washington, DC, not surprising since the government is a leading employer. Increased regulatory scrutiny is fueling the trend.
Women are major players: More than 25 percent of chief data officers are women. That compares with just 13 percent who are chief information officers. (I may have a talk with my daughter.)
These five facts converge to point out one truth: Data is among the most valuable of corporate assets today. It should be treated with the same care and scrutiny as product inventories and SG&A expenses.
By appointing a chief data officer, these organizations are shifting the corporate conversation from the analytics group to the boardroom, and eventually to the front lines where consumer is. When it comes to corporate assets, nothing beats that.
From one-to-one to peer-to-peer, the relationship between consumer and brand has been tipping over the past few years, and the consumer is the one gaining scale.
I first saw the makings of this transition two years ago, while writing my book “The Loyalty Leap”. In it I shared four forces that were converging to shape the destiny of marketing. They included the rise and fall of the CFO, an evolving scarcity of attention, the burgeoning power of the consumer, and our own abilities and challenges, as marketers, to deliver one-to-one experiences.For some time we marketers have been talking about the customer in ways that now sound almost quaint: put the customer at the center of your purpose; make all decisions from the customer’s point of view. But today, the customer has firmly placed herself at the center of our purpose, thank you very much, and she will gladly remove herself if we do not give her what she expects.
Today, my company LoyaltyOne has provided a timely update to these forces. Let’s see how much has changed in less than 50 months.
The world is at our fingertips: There are no local businesses anymore. Consumers can easily access companies from across the globe, to the point that even micro-businesses can compete with national brands. We coined a term for this in 2013, “Mompopolies.” But regardless of a company’s size, it can only compete if it meets rising expectations about choice, delivery and experience. Consumers today require emotional engagement, and analytics-based decision-making is one of the sharpest tools for putting this at their fingertips – and ours.
The Peer-to-Peer Economy: The rise of online marketplaces such as eBay and Craigslist have fostered a consumer mindset wherein alliances are formed to share and exchange assets such as cars, houses, parking spaces and even money. It isn’t a small movement – Forbes estimated the P2P economy rose 25 percent in 2013, to $3.5 billion. But beyond spending, people also are joining to share their ideas on other economic activities, from research and development to marketing.
Consumer data awareness: When it comes to data, size does not matter. More important than the amount of data collected is how it is collected, how it is used (including storage) and how it is shared. Most consumers –77 percent – do not feel they are receiving any benefit from sharing their personal information, according to a recent LoyaltyOne survey. Yet 63 percent of the same survey respondents said they would give more personal information if companies sent them relevant products and service offers in return. Consumers expect something of value in return for their information – using inaccurate data is worse than using no data at all.
Surprise and delight: Loyalty programs have become so commoditized that the traditional points benefits are seen as entitlements. Aggregators now allow members to openly exchange points between programs, while others let them pool and share – all of which increases redemption rates but also means members interact with the program less. Marketers can distinguish their programs and brands by using the data to create more personalized services and adding relevant benefits that are a surprise, and that are more attractive than what aggregators can offer.
These four trends are converging to create an “economy of one,” where markets will continue to fragment into micro-markets that will shift with needs and trends. These nimble markets will feed consumer expectations for highly personalized experiences, possibly to the point that they demand we pay for their information if we cannot deliver on relevance. The choice is ours to pay or play.
To read the full report, including tips on how to engage in the Economy of One, click here.
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THE LOYALTY LEAP
In his bestselling book, LoyaltyOne President Bryan Pearson draws on more than 20 years of first-hand experience. His expertise in building emotional loyalty in the information age is demonstrated through insightful stories from the trenches of the data-gathering and marketing communications fields.