Authored by David Morton, Sales & Solutions Director at Arvato CRM Solutions
Failing to deliver more sustainable operations won’t just have consequences for the planet, it will also negatively affect retailers’ bottom line. Research by travel aggregator, Hotwire found that nearly half (47%) of internet users would change to another product or service if it violated their personal values, with environmental protection topping the list.
While it might not be the first thing that springs to mind when thinking about sustainability strategies, customer experience – supported by the right technology – has an important part to play in helping brands reduce their environmental footprint.
Bridging the digital divide
The nature of online shopping can lead to environmentally intensive purchasing behaviour.
Consumers often can’t ‘experience’ products in the same way they would in-store, so will try to find ways to reduce the chance that they receive something that isn’t right for them. For example, ordering the same piece of clothing in different sizes, keeping one, and returning the rest.
This is time-consuming for all involved, and potentially costly for customers where there are delivery and return fees. But it also significantly increases carbon emissions throughout the supply chain.
Using technology to help improve how brands market their products to consumers, and how customers understand the products they are buying, is one way brands can tackle this challenge.
Embedding tools like augmented reality (AR) or virtual reality (VR) into websites can help customers make better decisions about whether a product suits their taste or style before an order is even placed, in turn helping to cut down on returns.
But retailers can also realise significant environmental benefits by capturing data on how customers interact with their brand and ‘hyper-personalising’ their customer journey – meeting an individual’s specific needs across every channel, and adapting to changes from moment to moment.
Done well, this can help brands tailor their product offering and make recommendations that reflect customers’ preferences. This can further reduce the chance of returns while also boosting revenue, supporting loyalty and cutting customer effort.
Any process of hyper-personalisation is underpinned by a detailed understanding of an individual and how they interact with a brand’s products and services – a 360 degree-view of the customer.
Building this profile by gathering data from customer touchpoints – from physical point of sale (POS) systems, to a brand’s website and social media channels – is the first key step.
Doing this manually can be time-consuming and costly. Instead, retailers can use intelligent automation to automatically compile information from every possible customer touchpoint and feed it into one central customer relationship management (CRM) system.
Insight into action
Once the data has been gathered, businesses can then apply more advanced solutions such as Artificial Intelligence (AI) and predictive behavioural omni-channel routing to generate actionable insights that are tailored to a specific customer, all in real-time.
In practice, this could involve recommending product pairings, for everything from clothing to furniture, based on purchases the data shows a customer has enjoyed in the past. Or, it could be used to proactively suggest a particular size or style of clothing based on information on purchase behaviour, or direct customer feedback on previous buys.
Subscription and the circular economy
Having the systems and processes in place to deliver hyper-personalisation will also be critical to brands successfully launching and maintaining new propositions designed for a lower-carbon future.
An area that’s gathering particular interest is in subscription-type models that support the circular economy.
Swiss running brand, On, has recently started a service that sees customers subscribe to receive recycled sportswear that they can then return in exchange for a new version. Once used items are returned to the business, they are fully recycled.
Being able to personalise subscriptions like these to accommodate customers’ preferences for factors such as the frequency of delivery and the basic type of product will be essential to their long-term success.
But models like these don’t just benefit from personalisation from the outset. Once they’re up and running, they also give brands a chance to further develop valuable insight on their customers.
Current subscription models are typically set up online and can encourage more details to be shared than would typically be required in any normal transaction. Significantly, this can include a range of personal details, such as hobbies and interests, as well as more usual product preferences.
The information is often used to tailor the subscription itself but is also a unique opportunity to build a more detailed profile of each customer that can inform and tailor how a brand serves its customers in the future.
Brands that have the systems in place to capture this information and process it can in turn generate exclusive deals or offer access to invitation-only shopping experiences, creating new opportunities for sales.
But beyond this, it can also help retailers understand where customer demand could lie for them to expand the sustainable products and services they provide – increasing the benefits for both their own business, and the planet.
Investing in personalisation capabilities will pay dividends for brands’ environmental strategies, as well as for their customer satisfaction, retention and revenue.
Understanding how to implement personalisation can, however, be a challenge.
To tackle this, we’ve developed a new guide to help retailers step-by-step through the process. To find more about how we work with our clients to help them deliver more value for their customers, contact CRMSE@arvato.co.uk.