Driving customer loyalty with analytics and AI
Winning and retaining customers has always been challenging for retailers. However, it has become increasingly difficult over the past few years with the explosion of online retail and multiple new brands entering the market, giving customers more choice than ever before.
According to multiple research studies and industry experts, the secret to success is for retailers to deliver fast, convenient and enjoyable experiences that will delight customers and drive loyalty. Microsoft’s 2020 Global State of Customer Service report, for example, found that 90 per cent of consumers consider customer service as a very important factor when choosing a brand, and more than 88 per cent view it as important when making purchasing decisions. And, with 55 per cent of consumers saying they have higher expectations for customer service than one year ago and nearly two-thirds admitting they would sever a relationship with a business following poor service, now is the time for retailers to invest in developing unique experiences that set them apart from the competition.
“Recently, retailers have been trying to create more engaging shopping experiences, but it’s become even more critical for them to do so in the wake of the Covid-19 pandemic as it has significantly changed the way people want to shop for products and interact with brands,” says Naveen Tadepalli, director of data and artificial intelligence (AI) strategy, retail and consumer goods at Microsoft. “All the Covid-related restrictions forced retailers to close their physical stores or at least limit their capacity, which meant they had to quickly develop e-commerce capabilities and introduce new services such as kerbside pick-up to continue serving customers.
“Meanwhile, retailers that previously had e-commerce platforms have seen demand surge and they’ve been experimenting with new techniques to improve the quality of their digital content and marketing collateral to differentiate it from the competition. For instance, some are trying live streams or using influencers to promote and endorse their products via social media.”
According to Tadepalli, the most effective way to attract and retain customers in the post-pandemic world will be to deliver personalised experiences that allow individuals to choose how, when and where they shop.
“Some people will only shop in physical stores, others prefer to purchase products online, and most like to switch between channels throughout the shopping journey depending on what is most convenient for them at the time,” he explains. “The speed, ease and convenience of online shopping has led to the significant growth of e-commerce over the past few years and its ever-increasing popularity during the pandemic has confirmed that it’s certainly here to stay, but physical stores still have an essential role in the shopping journey for many customers. Hence, retailers must offer both physical and virtual shopping experiences – and deliver a seamless and consistent experience across each channel – to ensure they can cater to the needs of all their customers.”
To develop the types of services and experiences that will delight consumers and foster loyalty, retailers must first gain a full overview of every individual customer. This can be achieved by implementing a customer data platform (CDP) with built-in analytics, AI and machine learning capabilities, such as Microsoft Dynamics 365 Customer Insights.
“Retailers already collect vast amounts of data across multiple customer touchpoints, but it is often trapped in siloed systems, so it’s largely underutilised,” explains Tadepalli. “Dynamics 365 Customer Insights enables them to aggregate data from both their internal systems and other external sources in one unified platform, then use AI and machine learning to derive actionable insights and build accurate 360-degree profiles for every customer.
