L.E.K. Consulting, the Boston-based global management consulting firm focusing on digital strategy for industries such as retail and consumer goods, released its report depicting retailers’ use of data to address customer needs.
“The problem isn’t too much information — it’s not being focused about how to use it,” said Chris Randall, managing director at L.E.K. and coauthor of the report. Randall believes addressing customers’ needs and purchase paths will “drive better engagement and conversion,” exploring the e-commerce environments and digital strategies of brands such as Warby Parker, Amazon and others.
The report noted a four-dimensional framework of consumer needs. By increasing transparency, educating consumers, curating the experience and easing conversion, retailers can better understand consumer needs and tailor the right data, according to the report.
Increasing transparency can take the shape of price and promotion consistency across channels, as is true with Casper, the direct-to-consumer mattress in-a-box brand targeting Millennials with spare graphics and catchy tag lines. With Casper, mattresses warrant a true price of its products, along with a 100-day money-back guarantee. The focus is transparency, or else the customer goes ghost in the checkout.
Educating consumers can mean “curated experiences” which add value for the consumer, such as Netflix’s profile-based recommendations or Airbnb’s suggestions based off a user “quiz” define retail opportunities. For retailers, this translates to “delivering a repeat offer to customers when they’re most likely to act on it.” The reverse is true, retailers must withhold an offer if a customer is going to purchases a product regardless in order to reduce unnecessary subsidiaries.
At the last stretch of the purchase journey is customer conversion. With the addition of alternative payment methods, flexible payments (installment plans) and shipping options such as store pickup, home delivery or locker delivery, retailers are readying for increased success. In the case of Shopify, the Canada-based e-commerce platform, now specializing in unified commerce, eased conversion in the stores utilizing its proprietary Shopify Pay program. Shopify merchants who used the program saw an 18 percent increase in conversion for returning customers, rendering more sales. Another example of customer conversion? Amazon, with its same-day delivery, fast and free returns, and more.
When retailers understand the customer clearly, they can explore the appropriate data and “act on what they know,” and addressing customer needs often means looking at one’s competitors.