The DATA merchants

Retailing is all about making an emotional connection with customers, according to Angus Burrell and Andrew Howell of global payments solutions specialist Valitor. And, in an omnichannel world, you need data to feel the love

With Brexit uncertainty paired with a December election, the UK high street was bracing itself for a gloomy festive season in 2019. Visa’s Christmas marketing campaign even tried to drum up retailer footfall with a #whereyoushopmatters message following sluggish November sales figures.

As consumers expect to be able to shop quicker and often cheaper than ever before, where do the traditional bricks and mortar stores fit into this new retail landscape? Well, according to Angus Burrell and Andrew Howell – respectively general manager for the UK and head of marketing in the omnichannel solutions division of global payments business Valitor – they won’t unless they embrace the shopper ‘experience’.

“I think one of the biggest changes we’ve seen in the last two or three years is the emergence of the consumer who’s going shopping for an experience, not necessarily to buy something,” Burrell says. “People are buying into a lifestyle much more, they don’t want to be filling their lives with things.”

He has an uncompromising message: “The high street as we have known it is probably a drawing to a close.”

In other words, if bricks and mortar retailers in the UK  ignore advice to maximise the customer experience, they could join the 9,300 stores that closed their doors in 2019.

But the good news is that there are plenty of examples of native online businesses that have made the move into the high street – brands such as Missguided and Joe Browns – signalling that digital and physical have a complementary role, as long as you understand how the channels work together and master them correctly. This isn’t a multichannel strategy – discrete sales channels responsible for their own customers and marketing – but rather an omnichannel approach, whereby data is shared across an organisation to build up at 360-degree view of an individual consumer. It’s about intelligently using data, from website, social media and store, to translate information into revenue.

“Consumers really identify with brands and they’re able to do that due to social media, the sharing of everything on Instagram, Facebook, etc,” says Howell. “The question is, how do you translate your luxury, in-store shopping experience onto a social media feed? How do you map that romantic view of what it is to be part of a brand, to online, as part of your app, your content, your email marketing, push notifications, or whatever?”

“I think that retailers can cross the divide between high street and digital by various means,” answers Burrell. “Maybe I give you an offer when you buy something in store to get a percentage off for buying online.  That might entice you to go online and buy something else. Maybe that works the other way round, too. Maybe retailers enable me when I buy something online to return it in store or if I buy in store, to return it online.”

The reason retailers often fall short in this area is because there’s a data chasm. A shopper might receive great personal customer experience in store but then ‘there’s just this big cliff you drop off where you might get hammered by emails, or not receive any communication at all from the retailer, which is crazy’, says Howell. Since online retailer marketing is becoming more and more personalised, consumers are quick to be put off by blanket messaging or, indeed, a rude silence following the initial excitement of a purchase.

Valitor calls this the after payment emotional experience (or APEX) and it sees it as being crucial to building the customer relationship. It’s the idea at the centre of Valitor’s omnichannel mission ‘because it’s a reality that 80 per cent of your revenue is going to come from 20 per cent of your customers. So, you need to keep those top customers really happy’, says Howell.

Payments hold the key

Valitor believes that the only way a retailer can ensure it provides a seamless, hyper-personalised experience throughout the consumer journey, is by understanding customer behaviour through payments. Payments data is so much more than tracking expenditure; it gives a clue to the psyche of the shopper and, as such, Howell argues, the insights it provides should be available across an organisation to inform the ongoing relationship with that customer. So much so, in fact, that he believes successful retailers these days should aspire to being a personal concierge, curating the shopping experience over the customer’s mobile phone.

Despite payments information having been available to retailers for a number of years, most have been poor at organising it and not good at explaining to the consumer why it’s to their benefit that they give it up.

“I think retailers could really benefit from having a more purposeful education programme that says ‘this is how we’re going to use your data. This is how we’re going to keep it private. This is how we’re going to improve your experience. This is how it’s going to benefit you – we can improve our service because we understand you better as our valued customer’,” says Howell. “If people understand that, by giving you their data, they’ll receive more in return, they’ll be much more likely to exchange their information.”

The advent of open banking, which is having an enormous impact on data availability and analytics, makes it easier, in theory, to maximise intelligence about a consumer and to personalise the offer – which could, ultimately, extend to in-the-moment financial services, such as credit at point of purchase or product insurance.

While there are notable examples of large brands with multiple channels, numerous outlets and high footfall that excel at creating sticky customers so loyal they’re superglued, Valitor believes payments data also offers smaller independent retailers – the ones fighting for survival on the high street – a radical way to boost customer engagement and drive more of them into town. By pooling their data, independent merchants in the same locality could also understand consumer behaviour better, allowing them to compete more effectively against the retail giants.

Ultimately, says Howell, there’s going to be a singularity for retail, where ‘the dinosaurs all die, and from it will evolve a more intelligent, smarter species of retailer’.

This article was published in The Fintech Finance Magazine: Issue #15, Page 72 & 73.

Author: Yash Hirani

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