How Retail CMOs Can Use Data to Improve Shopper Experiences
For chief marketing officers (CMOs), data surrounding in-store shopper behaviors might seem to have only limited value. After all, CMOs are strategic and customer-centric , focused on budgets, company and brand perception, ROI on major campaigns and other high-level responsibilities. In other words, not the sort of concerns and responsibilities that can be informed or even influenced by daily store traffic or where shoppers actually go once in the store — right?
Not so fast.
In fact, in-store behavior can shed meaningful light on each of those big-picture items, and a whole lot more. From measuring the success of promotional campaigns to understanding who your shoppers really are, let's explore why behavior data can have a seismic impact on the CMO's purview and how it can improve both brand perception and the overall shopper experience.
Real-world data with real-world ROI
If you look at C-suite role responsibilities in major U.S. retailers, a pattern emerges: The role of the retail CMO has expanded to be centered around the customer experience. So, how are they working to advance the customer experience? Following the money can provide some insight. According to a 2022 survey by global research firm Gartner, CMOs' top three areas of investment today are:
- Campaign creation and management (10.1%)
- Brand strategy (9.7%)
- Marketing operations (9.6%)
And considering that same report noted that the average total marketing budget is around 10% of an organization's total revenue, these areas represent serious financial investment. But how are they evaluating the success or failure of these investments?
Sure, they can know if revenue is up or down, how a given product performed, and how their digital metrics tracked versus benchmarks. But can they know if their campaigns and promotions captured shoppers' attention — and share of wallet — at the merchandise display level? Can they truly evaluate if their brand strategy is engaging their target shopper? Or if their merchandising and brand experience is on point? And, most importantly, can they actually know whether their strategic areas of investment are positively impacting their top priority, namely, the customer experience?
They can — if they leverage the right data. Here's how.
Build better personas
Let's say you spent months building shopper personas using personal information provided by shoppers when they enrolled in your loyalty program. Perhaps you've even enlisted the help of a pricey consulting firm or agency. The personas they can deliver — likely based on information from focus groups, surveys, or both — are thorough and precise.
All in all, it's a fine start, but it's only a start.
To truly understand their shoppers, retailers may want to consider incorporating in-store and beyond-the-store data that can be captured by Traffic Counting solutions, as well as solutions powered by Computer Vision. By evaluating the demographics of your shoppers, how frequently each segment visits, how long each segment shops, and the paths they take through the store, you can get a much more concrete idea of who your shoppers truly are and what they actually want.
But don't stop there: Consider gaining valuable insights through store guest behavior analytics. Leading in-store multi-sensor data solutions can capture shoppers' engagement along their path to purchase. This data can reveal how your shoppers perceive your brand and view visits to your stores — are they visiting strictly to pick up routine essentials or are they stopping to browse promotional items and displays, or both, or some other pattern? As you can see, this data provides key information for successful big-picture marketing.
Merchandise and map more effectively
Merchandising is a blend of art and science. Until recently, marketers and merchandisers could only gauge its effectiveness through their sales conversion rate. That could tell them something about their merchandising effectiveness — but there is so much more they wanted to know. It couldn't tell them, for example, if or how a particular display or store layout worked, rather only that they'd done something right if conversion went up. Consider that the dark ages of merchandising.
Today, with a combination of Traffic Counting and Computer Vision solutions, merchandisers and marketers can see how long shoppers lingered by a single display (also known as "dwell time"), how often they abandoned a merchandising area or display, the paths they took from one part of the store to the next, and more. Virtually every key customer behavior that happens inside a store can be mapped and measured — giving CMOs and those who report to them a staggering range of ways to measure the effectiveness of their merchandising. Better still, it can help them optimize their store layouts to make the shopper experience even more seamless and more likely to drive shoppers to make purchases.
The relevant data for the right use case
In-store data can provide a glut of riches in terms of customer insights — but it can also lead to over-analysis and lack of clarity on which actions to take. After all, with so many activities to measure, how do you know you're analyzing the right metrics? And what are retailers supposed to benchmark these metrics against? Simply put, what's important, what's merely a nice-to-have data point, what's relevant, and what's noise?
There's no single answer that applies to every single retail sector and use case — and that's actually a good thing.
Consider two very different retailers whose customers have very different needs and priorities. Retailer A operates big-box technology stores that sell a variety of gadgets, ranging from inexpensive devices to computers and hardware costing in the thousands. Their customers often need knowledgeable guidance from well-informed associates before making a large purchase.
Retailer A will want to measure customer engagement — how many customers spent time talking with associates and how many of those customers then made a purchase — along with their shopper-to-associate ratio (STAR) to ensure they can deliver exceptional customer service.
Retailer B, on the other hand, is a food and beverage outlet that specializes in convenience and low-cost items. Their customers want to find what they're looking for quickly, check out seamlessly, and get on with their days.
This retailer will want to focus on metrics around speed and convenience. How long do customers take to locate the items that they're looking for? How long do they wait in line at checkout? How often do they abandon areas or displays they initially showed interest in? How frequently do shoppers return — a good proxy metric for determining customer satisfaction with your product mix and the convenience of your layout?
While these retailers may have largely different priorities, they'll both likely want to capture demography to see who they're reaching and if they're truly their target shoppers. They'll also want to examine path analytics to optimize store layouts, along with dwell times in front of displays and promotions. They'll probably also discover target persona insights with on-shelf visibility powered by Computer Vision to see who engages with which products.
In short, what matters is that retailers focus on the metrics that matter to them, rather than trying to measure every single shopper activity available. That's the difference between gaining game-changing shopper insights and experiencing paralysis by analysis.
There's never been a better time to be a retailer. There are more ways to reach and engage customers than ever, and there have never been more opportunities to capture the kind of customer insights that can empower retailers to make data-driven decisions that deliver better shopper experiences and improve profitability.
The key is to focus on the metrics that align with your stores' mission and your shoppers' needs and using those insights to develop better personas, more effective merchandising and layouts, and gain a better understanding of your brand's perception. That's something retail marketing leaders have dreamed about — and something savvy CMOs can realize today.
To learn more about the metrics you should focus on in stores and beyond, download our white paper, Creating Experiential Retail Along the Shopper Journey. Or, if you're ready to talk, reach out today.