At Custora’s CARMA (Customer Analytics for Retail Marketers) conference last year, I shared my thoughts on the so-called retail apocalypse by comparing it to HBO’s Game of Thrones—not only because I like Game of Thrones, but also because it’s apt.
In the fictional world of Game of Thrones, rival factions from across the land vye for the Iron Throne—to become King or Queen and rule all of Westeros. However, as they lie, cheat, and fight each other to win the throne, a bigger threat to existence is looming. The Night King and his Army of the Dead (for those who don’t watch the show, imagine a bunch of zombies who hail from a region like Antarctica) are growing and preparing to wipe out all of mankind.
I see parallels in this fictitious world and the current state of retail. In the world of retail, the short-sighted fight for the Throne is the everyday battle for the incremental conversion. Over the past 10 years, there’s been an explosion of new marketing technology, and customers are buying and interacting with brands in ways they never have before. As marketers, we’ve been doing everything we can to capture incremental conversions using an array of valuable tools — technology that helps optimize landing pages, technology that helps you find items you’re interested in buying, subject line optimization tools, product recommendation engines, browse and abandon cart technology, display retargeting tools…the list goes on. Much like winning the Throne offers its prizes and fame and fortune, driving these incremental purchases helps a retailer grow market share.
However, lost behind the scenes in the battle for last-click ROAS, a bigger threat to the very existence of many retailers is looming. The Night King, in the context of retail, goes by different names—Amazon, Zara, JC Penney, Warby Parker. Lightning-fast product cycles. Flawless supply chain management. Premium brand equity erosion. Radical price transparency.
Unfortunately, optimizing subject lines and shoving display ads and discounts in front of every customer can only drive so many incremental purchases. Retailers need something more powerful to survive. In Game of Thrones, the heroes discover there is only way way to fight the Night King—dragon glass. In the fantasy world, dragon glass is a rare raw material with the ability to kill even the undead zombie warriors.
In retail, the “dragon glass” that offers a way to fight off the Night King is simple to think about, but hard to materialize—customer loyalty. At the end of the day, brands need to build relationships with customers. They need customers to become repeat buyers. They need a systematic approach to deepening brand engagement and growing lifetime value.
Returning to the basics of customer economics sounds simple…but it’s not. Slick abandoned cart emails or savvy retargeting display ad campaigns can run on auto-pilot in the background. In contrast, a strategy that’s designed to systematically grow and nurture customers requires detailed knowledge of the customer journey and powerful insights on how and when to communicate with customers.
This is challenging for many reasons. For one, the data that’s needed to surface insights about customer behavior is often scattered across different silos. (Your abandoned cart tool doesn’t need perfect knowledge of each customer to deliver an email, but your direct mail-based ‘one time buyer’ program sure as heck does.) Second, it can be difficult to know what questions to ask of the data—what insights to extract. What key segments should a brand organize itself around? What are the experiences that unlock greater customer loyalty?
Third, and perhaps most daunting, the organization needs to be able to leverage customer insights at scale. Every decision—from product planning to designing campaign briefs—should be informed by a deep understanding of customer interests. Every campaign should be measured not only via last click, channel revenue, but also based on the incremental impact it has on customer lifetime value. Every touchpoint, from daily emails to the on-site experience to targeted direct mailer campaigns, should be tailored based on a holistic understanding of cross-channel customer behavior.
Few, if any retailers, have found a way to make the above a reality at scale. And that’s what our software platform is all about. We think of it as the new era in CRM, and it’s all about helping you leverage customer data to drive long-term, sustainable growth.