Getting to the heart of the customer in a privacy-first world

A dra­mat­ic uptick in the use of dig­i­tal may have been a boon to brands seek­ing to under­stand more about their cus­tomers, but with that comes an increase in the hur­dles mar­keters need to over­come to gar­ner insights about their cus­tomers’ jour­neys. The impacts of GDPR – and the result­ing fines – are being felt across mar­ket­ing depart­ments, Apple’s iOS14 update allow­ing cus­tomers to remove track­ing and the immi­nent dep­re­ca­tion of cook­ies on Google’s Chrome are just three chal­lenges exec­u­tives face. 

It’s more imper­a­tive than ever to find cre­ative ways to engage, com­mu­ni­cate and nur­ture those cus­tomers. 

Dur­ing a live­ly round­table dis­cus­sion, senior mar­keters and busi­ness lead­ers came togeth­er to dis­cuss how the land­scape is chang­ing, their frus­tra­tions and insights into how best to get to the heart of the cus­tomer.

“We have real­ly strug­gled since iOS14,” admits Ast­ley Clarke’s CEO, Scott Thom­son. “The lack of vis­i­bil­i­ty and tar­get­ing has seen dig­i­tal ROAS [return on ad spend] reduced from fives, six­es and sev­ens to ones, twos and threes. It’s a real­ly impor­tant chan­nel for a dig­i­tal­ly native brand.”

Dig­i­tal data has become some­thing of a com­fort blan­ket for mar­keters. New restric­tions com­bined with a gen­er­al lack of trust in some plat­forms’ out­put is caus­ing mar­keters to look again at how they build and mea­sure their activ­i­ty. For­mer Birds Eye Igloo Ltd mar­keter and now CEO at Eve Sleep, Cheryl Calver­ley is ready to deliv­er the med­i­cine. 

“FMCG trains mar­keters to under­stand the effec­tive­ness of spend with­out being able to attribute it direct­ly on a one-to-one basis. Dig­i­tal brands are say­ing, now we have to under­stand how econo­met­rics work, how do I get to know my cus­tomer base through research and insight? It will allow brands to learn in a much more truth­ful way. But it’s real­ly hard work.”

Myles Eje­gi-Memeh, head of ecom­merce at bespoke tai­lor Richard James and Har­rys of Lon­don is blunt: “We still have a lot to learn in ecom­merce. We’ve learned how to use oth­er appli­ca­tions to work out how many touch­points the cus­tomer has to nav­i­gate through­out the pur­chase process and how much the sale has cost us with regards to mar­ket­ing and cus­tomer aqui­si­tion.” 

Cost is cer­tain­ly a focus­ing fac­tor. With so many now ques­tion­ing exact­ly what their ad dol­lars are get­ting them, ner­vous­ness is creep­ing in. “On the brink of a reces­sion a lot of brands, par­tic­u­lar­ly in ecom­merce have had enough of being held to ran­som and are fun­da­men­tal­ly look­ing at attri­bu­tion in a dif­fer­ent way. The cus­tomer is cost­ing way more than it did nine to 18 months ago, but few brands are doing much about it,” warns per­for­mance mar­ket­ing com­pa­ny Wunderkind’s region­al vice-pres­i­dent, Jon Hal­ley. 

It’s inter­est­ing to find that, despite their much-vaunt­ed abil­i­ty to reach con­sumers, exec­u­tives round the table are increas­ing­ly scep­ti­cal about social media’s pow­er. “The down­ward trend for us using Meta as a per­for­mance mar­ket­ing chan­nel start­ed in 2018. It was just dimin­ish­ing returns,” reveals San­drine Zhang Fer­ron, CEO of vin­tage fur­ni­ture mar­ket­place, Vin­te­ri­or. “Regard­ing Google Shop­ping, mov­ing every­thing to P‑Max (per­for­mance) is mak­ing this chan­nel become like a black box. Plus, they’re also bid­ding on your brand. I was begin­ning to won­der how much it’s actu­al­ly can­ni­bal­is­ing organ­ic demand.”

The cus­tomer is cost­ing way more than it did nine to 18 months ago, but few brands are doing much about it

Try­ing to nav­i­gate dig­i­tal plat­forms to find out where cus­tomers are is dif­fi­cult for com­pa­nies for whom it’s busi­ness as usu­al. For those who are in the mid­dle of rad­i­cal trans­for­ma­tion – and it might be argued that post-pan­dem­ic, many are – it’s a her­culean task to work out what’s going on. 

Bel­staff went through large scale trans­for­ma­tion in 2021, replat­form­ing its web­site, chang­ing ERP, evolv­ing its brand direc­tion, and “every­thing you could pos­si­bly do in one year,” reveals head of ecom­merce, Saman­tha Davis. Not only this but the com­pa­ny saw a shift in its demo­graph­ics, and so was forced to learn about and find new cus­tomer cohorts. For a younger age group “we’re look­ing at out of home and more inno­v­a­tive mar­ket­ing to acquire these new cus­tomers, while the core cus­tomer demo­graph­ic shift­ed from 45+ to 35 years old. We’re look­ing at how to engage those peo­ple who already know about the prod­uct.” 

Dig­i­tal is seen as a boon but there’s a sense around the table that the loss of phys­i­cal con­tact is a miss­ing link. Tim Coop­er, man­ag­ing direc­tor of Oliv­er Sweeney, revealed that all of the company’s out­lets closed as a result of the pan­dem­ic. Now ful­ly online, the lack of phys­i­cal con­tact can be a chal­lenge. He says: “One of the main ben­e­fits of a mix­ture of retail and online was meet­ing peo­ple and under­stand­ing from store staff who they were and what they want­ed.” 

Jere­my Kanzen, CEO at The Dia­mond Store agrees: “There are lots of won­der­ful things you can do to con­nect with your cus­tomer to bring them into the mag­ic of the moment. The answer is to use tech­nol­o­gy intel­li­gent­ly to com­mu­ni­cate with your cus­tomer to be more rel­e­vant.”

While the flight to dig­i­tal was a boon for busi­ness con­ti­nu­ity in lock­down, for Travis Perkins it had almost the oppo­site effect, with such an explo­sion in demand mean­ing the site effec­tive­ly shut down to give the com­pa­ny time to serve cus­tomers prop­er­ly. But it also gave the busi­ness breath­ing space to evolve its dig­i­tal offer­ing in a way that could tar­get its some 17 dif­fer­ent cus­tomer seg­ments more effec­tive­ly. 

One key dif­fer­ence is that the com­pa­ny had gar­nered insights about cus­tomers from the deeply per­son­al rela­tion­ships each branch man­ag­er has with their clients. This is now sig­nif­i­cant­ly digi­tised. Even with the restric­tions from iOS14, John God­win, Travis Perkins’ dig­i­tal and mar­ket­ing direc­tor sug­gests the rich data the com­pa­ny is get­ting from a new app that was launched post-pan­dem­ic is help­ing to inform how it responds to trends. He adds: “We’re try­ing to seg­ment our cus­tomers in a way that we’ve nev­er done before.”

Already, in the acqui­si­tion phase, exec­u­tives round the table dis­cussed the need to pro­vide an author­i­ta­tive voice to dif­fer­en­ti­ate the brand and attract the cus­tomer, but build­ing a joined-up, per­son­alised expe­ri­ence is where this comes into its own. 

No mat­ter that retail­ers may once have been store-based, with knowl­edge­able staff on the shop floor, or that they have always been ecom­merce pure-play. Being read­i­ly avail­able with the right infor­ma­tion at the right time con­tin­ues to be a core pil­lar of build­ing the cus­tomer rela­tion­ship. 

Richard James’ phys­i­cal pres­ence is in only a hand­ful of loca­tions. While the one-to-one tai­lor­ing expe­ri­ence deliv­ers great per­son­al­i­sa­tion, it has its lim­its. “We have to be par­tic­u­lar­ly care­ful about main­tain­ing our lev­el of ser­vice when scal­ing our oper­a­tion up. AI is a work in progress, but our busi­ness has been built on giv­ing a very per­son­al lev­el of ser­vice, and it is imper­a­tive that we always com­mu­ni­cate on a one-to-one lev­el, whether we’re deal­ing with a query about bespoke tai­lor­ing or ready-to-wear,” Eje­gi-Memeh com­ments.

Per­son­al­i­sa­tion at scale is clear­ly pos­si­ble but how com­pa­nies organ­ise around it is salu­tary. Far­fetch is just one exam­ple of a glob­al fash­ion retail­er with mul­ti­ple seg­ments and brands that still man­ages to deliv­er the per­son­al touch. But they have one crit­i­cal dif­fer­ence. As its CEO is fond of say­ing, it is a tech­nol­o­gy com­pa­ny that hap­pens to sell lux­u­ry fash­ion. It enjoys a unique posi­tion by hav­ing foun­da­tions built on best of breed tech­nol­o­gy in every area. 

“To get scale,” Wunderkind’s Hal­ley asks, “where’s the tech­nol­o­gy com­ing in?”

Much depends on what per­son­al­i­sa­tion actu­al­ly means to the cus­tomer. Calver­ley insists that “per­son­al­i­sa­tion is this incred­i­bly fat word,” explain­ing that, for some, it’s just about rapid deliv­ery and for oth­ers it’s high touch, deep under­stand­ing of the customer’s needs. ”You’ve got to decide if you’re a scale brand or not,” she says.

You’ve got to decide if you’re a scale brand or not

Those round the table gave vary­ing exam­ples of what per­son­al­i­sa­tion means to their cus­tomers. Belstaff’s Davis, for exam­ple, sug­gest­ed that con­sumers would flock to a multi­brand retail­er like Far­fetch, for exam­ple, because it took the stress out of prod­uct search. Cus­tomers of Bel­staff were more in the mood for an immer­sive sin­gle-brand expe­ri­ence. 

The online to offline ques­tion per­sists. For God­win, it’s about using data gar­nered to inform the next best actions that dri­ve cus­tomer behav­iour. He says: “How do I sup­port branch staff with bet­ter data and ana­lyt­ics to then go and make that phone call?”

For Kanzen, it’s about tak­ing that in-store, per­son­alised dia­mond-pur­chas­ing expe­ri­ence, with all its prod­uct exper­tise, and scal­ing it through con­tent. He adds: “When a per­son engages on a piece of con­tent, we can use track­ing links to feed back into the CRM, con­nect­ing the dots to build a help­ful pro­file and per­son­alise.”

Giv­en the chal­lenges in acquir­ing the right data and find­ing the right plat­forms to engage with cus­tomers at the start of the cus­tomer jour­ney, it would be easy to assume that main­tain­ing loy­al­ty and encour­ag­ing repeat pur­chase is the less­er chal­lenge by some sig­nif­i­cant mar­gin. How­ev­er, atten­dees not­ed that suc­cess here is often very far from a giv­en.

Not least, many sug­gest­ed, because of the lim­it­ed oppor­tu­ni­ty for repeat pur­chas­ing. “If you’re sell­ing some­thing where the repeat cycle is three and a half years, reten­tion becomes a very dif­fer­ent thing to when it’s three-and-a-half weeks. Our own repeat cycle is five months,” Coop­er says. 

From mat­tress­es (although these are bought more fre­quent­ly than one might imag­ine, says Calver­ley) to dia­monds, bespoke suits and wardrobes, how do com­pa­nies come out on top in the cost of loy­al­ty to rev­enue ratio? 

An added com­pli­ca­tion can be today’s sen­ti­ment towards sus­tain­abil­i­ty. Both indi­vid­u­als and the wider mar­ket­place are look­ing to brands for action on reduc­ing con­sump­tion. Sure­ly this is the ene­my of growth? Not nec­es­sar­i­ly, says Eje­gi-Memeh: “The bespoke side of our busi­ness is all about one-off gar­ments that are made by hand on the premis­es, so it has always been high­ly sus­tain­able. Bespoke is the oppo­site of fast fash­ion. All of our cus­tomers trea­sure their gar­ments and want to extend their life­time. So, far from being the ene­my of growth, sus­tain­abil­i­ty is a big plus for us.”

This is still a chal­lenge, how­ev­er, because it requires cus­tomers to buy into the brand dif­fer­ence. Thom­son says: “We use great mate­ri­als, gen­uine gem­stones, no brass, no glass, no glue. And we’re com­pet­ing with fash­ion acces­so­ry brands at a sim­i­lar price. It’s about edu­ca­tion.” 

Kanzen adds that once you become the customer’s trust­ed part­ner, it’s not just repur­chas­ing that is key, but advo­ca­cy that has the poten­tial to expand the cus­tomer base by mul­ti­ples.

“Loy­al­ty is a word our cus­tomers use a lot and 18% of the cus­tomers we gar­nered with­in our first 10 years are still cus­tomers today,” Coop­er says. It’s impor­tant because, atten­dees not­ed, paid social in par­tic­u­lar is pro­mot­ing a kind of impulse-buy promis­cu­ity. Cou­pled with the height­ened expec­ta­tions of the pan­dem­ic, where deliv­ery on time, any time is now a giv­en, there is ample oppor­tu­ni­ty for oth­er­wise loy­al cus­tomers to jump ship. Coop­er would sug­gest that his cus­tomers’ loy­al­ty buys him a cer­tain amount of for­give­ness in the case of stock out­ages and so on. Although, he admits, it’s not unlim­it­ed.

Ulti­mate­ly, the exec­u­tives round the table agreed that there are no easy solu­tions – and with change hap­pen­ing so rapid­ly in every­thing from data pri­va­cy to per­for­mance mar­ket­ing to plat­forms, shift­ing seg­ments and loy­al­ty, it can be hard to know which mast to pin your colours to. In all the noise, it’s dif­fi­cult to know which instinct to trust. Zhang Fer­ron sums it up neat­ly: “If you want to invest in your brand, no one real­ly knows how to mea­sure that with pre­ci­sion. You need to mix data-dri­ven deci­sions with more con­vic­tion-based ones, take a leap of faith.” An edu­cat­ed one, nat­u­ral­ly.

To learn more about how Wun­derkind helps retail­ers com­bat cook­ie dep­re­ca­tion and build their first-par­ty data, vis­it wunderkind.co/uk/solutions/multichannel-for-retailers/

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