So you know your customer, what’s next?

So you know your customer, what’s next?

First published in Campaign.

Gathering, understanding and using customer data is back on the priority list for brands. 

The launch of Boots Media Group unlocks the power of 10.2 million active members for its partners. Its success rests on the creation of experiences that genuinely add value for customers over more personalised digital landfill.

Days after going public three weeks ago, Cazoo announced the acquisition of Cazana, the automotive data insight firm, for £25m. It's another signal that in the battle for retail loyalty and growth, customer knowledge is power. As Boots Media Group springs to life, it would do well to learn from the principles that have driven Cazoo's growth.

The potential is huge. If Cazoo can build a business worth $7bn in just over two years by listening to customers, imagine what one of Britain's best loved brands could achieve.

While most retailers have the tools for omni-channel engagement, most don't use them, failing to create experiences that build genuine loyalty.

Retail today feels like the ultimate "boss battle" for attention and loyalty. An arms race triggered by the fact that during the pandemic 48% of consumers replaced products they typically purchased at physical stores with competitors' online alternatives. A quarter said that they switched brands more often today than ever before (Raydiant).

This behaviour of switching is endemic of purchase behaviour that Alistair Rennie and Jonny Protheroe of Google christen "The Messy Middle". Today's consumers adopt two mind states: exploration, an expansive activity; and evaluation, which is reductive. People move fluidly between these two, yet most branded loyalty schemes, such as Boots Advantage Card, are static in comparison.

To win, retailers must become master gamers. Turning their armoury into signature moves and a boss-beating, brand-defining experience, built unremittingly in service of the customer.

Unlocking special moves

With businesses brimming with customer data, the challenge is to weaponise it. To do this, the retailers we work with are deploying three signature moves:

Move 1: Feed freshness

Like anything, data has a shelf life. Designing experiences that create an honest value exchange for consumers and feed a fresh stream of actionable behavioural data is critical.

Nike Membership empowers athletes of whatever level to "Just do it", creating genuine value in exchange for data. Insights fuel the battle with new school athleisure brands like Lululemon, prompting the launch of a range of yoga-wear and a range of maternity running gear in 2020.

Move 2: Pursue prediction

Businesses must turn data into a crystal ball, deploying predictive analytics and AI to look forward, anticipating shopper needs. HBR recommends businesses of all sizes adopt AI and predictive analytics over coming years. By generating predictive customer scores based on journey events, the company can predict value outcomes such as revenue, satisfaction and cost-to-serve.

Move 3: Code the brand

Algorithms already sit at the heart of the customer experience. Forward-thinking retailers like Farfetch are staffing up with data analysts to build brand-defining algorithms. Turning personalisation into a weapon in the battle for loyalty.

Brand personality must be infused in the algorithm's behaviour, making the programmatic customer experience more than retargeting at scale.

Applied creatively, algorithms can be special moves in the customer experience. Sephora's Colour and Lip IQ, as well as Uniqlo's AI-powered UMood kiosks, showcase the capacity for the technology to define the experience and build the brand.

Winning the battle for genuine loyalty

The retailers that win will be those that make experiences that are more than the sum of their parts, seamlessly crossing the line between digital and physical worlds. A "Phygital" experience, that differentiates by demonstrating customer obsession.

Connecting the three signature moves in ways that constantly reflect customer needs is the ultimate power move.

From the word go, Alex Chesterman's goal at Cazoo was to be customer-obsessed. Today it is truly "Phygital". Its experience is relevant, responsive and reflects its love for their customers. Its success speaks for itself, the fastest (double) unicorn in history; its growth has sprung from the strength of its customer experience.

As Boots Media Group sets up shop, it would do well to remember that in the world of relevance, quality is as important as quantity.