Recently, I’ve been working with a leading retail company in Thailand. What I’ve discovered were 3 things.
Customer segmentation – even with numerous data including social data, transaction data and customer loyalty data, the CRM team still can’t clearly identify which segmentation this customer is. In practice, they have a big group (segment) of customer which customer can fall into one or more segmentation. This will likely affect how retails view their customer-shop profile. I’ve seen an example of segmentation in Telecom industry and they have 500+ micro-segmentation for their customers. Not to mention the dynamics of monthly updates which customer could change segments depending on their interaction with the customer.
Campaigns and promotion – as CRM can’t clearly identify which segment each customer belongs to, thus the campaigns and promotion are therefore driven by the suppliers and not that needs and demands of customers. In practice, we see mass campaigns such as month end promotion, weekend promotion instead of segmentation promotion. Also, in reality, managing campaigns and promotion is a mess as they were created without proper campaign management, hence, created by suppliers. Customers could experience 4-5 promotions in one shopping bill, if all campaigns apply, however, if not, customer experience could be easily ruined. I’ve seen several incidents when this happened.
For this retail, sales are led by promotion, hence no promotion, no sales.
Customer preference and personalization – this is likely never going to happen in retail, why? Because retailers don’t even have customer intimacy. This is because they rely their analysis on purchasing behavior, which is what customer do, but not what customer are. You have to interact and understand why customer behave – that’s what customer intimacy is. For instance, several customers tend to purchase snack and sodas during Thursday or Friday because they plan to hold a part during weekend, but store ends up have sales promotion during weekends. Social media and influencers also play an important role in persuading customers to buy certain items, by the time retails notice that trends, it already fades out or other retailers already picked it up and sold their items already. Not to mentioned, preferences and personalization has to be done in almost real time due to the dynamics of customer needs. Hence, an end-to-end process of customer profiling, campaign and promotions and reach out has to be integrated seamlessly.
Kitipan Blog 