UNIFYING THE CUSTOMER EXPERIENCE WITH DATA-DRIVEN...

PROPRIETARY AND CONFIDENTIAL

U N I F Y I N G T H E

C U S T O M E R E X P E R I E N C E W I T H

D A T A - D R I V E N P E R S O N A L I Z A T I O N

T U E S D A Y , N O V E M B E R 1 5 , 2 0 1 6

Brendan WitcherPrincipal Analyst

Kurt HeinemannCMO

W E B I N A R

Empowered customers have given rise to the age of the customer

Age of manufacturing

Mass manufacturing

makes industrial

powerhouses

successful

• Ford

• Boeing

• GE

• RCA

Age of distribution

Global connections

and transportation

systems make

distribution key

• Wal-Mart

• Toyota

• P&G

• UPS

Age of information

Connected PCs and

supply chains mean

those that control

information flow

dominate

• Amazon

• Google

• Comcast

• Capital One

Age of the customer

Empowered buyers

demand a new level of

customer obsession

• Macy’s

• Salesforce.com

• USAA

• Amazon

Delivering On All Five Market Imperatives Is The Key To Success In The Age Of The Customer

Drive business

growth with privacy

Turn big data into business insights

Embrace the

mobile mind shift

Accelerate your

digital business

Transform the

customer experience

Age of the customer

US retail sales

($ billions)

$376 $415 $452 $488 $523

$1,290$1,366

$1,445$1,530

$1,618

$1,706$1,710

$1,715$1,721

$1,728

2016 2017 2018 2019 2020

Online sales

Web-influenced

offline sales

Offline sales

Source: Forrester Research Web-Influenced Retail Sales Forecast, 2015 To 2020 (US)

In 2016, 49% of all US retail sales will either be influenced by or occur online

Web-impacted sales CAGR 2015-2020:

Each time a customer is exposed to an improved shopping experience, their

shopping expectations are reset to a new higher level.

Base: 4,485 US online adults (ages 18 and older); Source: Forrester’s North American Consumer Technographics® Customer Life Cycle Survey 2, 2015

Experience Is A Significant Factor In Every Shopper’s Journey

68%“I am unlikely to return to a

website that does not

provide a satisfactory

customer experience.”

Source: Forrester’s North American Consumer Technographics

Brand Compass Survey, Q3 ‘15

Source: Forrester's Q2 ‘16 Global eBusiness And Channel

Strategy Professional Online Survey

77%of consumers have chosen, recommended, or

paid more for a brand that provides a

personalized service or experience.

89%of eBusiness and channel strategy professionals

plan to invest in personalizing the customer

experience in 2016/2017.

Personalization is being prioritized due to its impact on customer experience

of consumers prefer to do business with brands that use

their information to make experiences more efficient.

Personalization is a Top eBusiness priority

Base 196 eBusiness And Channel Strategy Professionals

Source: Forrester’s Q3 2015 Global eBusiness And Channel Strategy Professional Online Survey

“Of the tech you will be investing in during 2016, please identify your top priorities?”

1. Responsive Web Design

2. Personalization Technology

3. Customer Relationship Management Tools

4. Mobile App and Engagement Platform

5. Product Recommendations

6. eCommerce Platform

7. Site, Payment, System Security Compliance/Protection

8. Big Data

9. Site Search

10. Customer Insights and Analytics Tools

55%49%

32%28%

Content on the

website

Promotions/product

offers

Product

recommendations

Reminders and

alerts

Content on the

mobile app

experience

Screen layout

What parts of the experience are you personalizing? (click all that apply)

Online personalization is often focused on specific site modules

0% 20% 40% 60% 80%

Making the store easy to browse for customers

Ensuring that we always have competitive prices

Providing self service technologies for shoppers

Improving the knowledge of associates

Making it convenient to purchase (short checkout lines, …

Ensuring that we always have the products customers want

Making it easy for customers to find the products they are …

Making the store more engaging

Personalizing the customer experience

For your organization / company, what are the main opportunities for improving the customer experience at your company's stores? (Please choose your top 5 only.)

Source: Base: 61 eBusiness and Channel Strategy professionals Source: Forrester's Q2 2016 Global eBusiness And Channel Strategy Professional Online Survey

In an omnichannel world, in-store personalization also ranks top of the list

Leading retailers are recognizing the gap that basic segmentation creates for

personalizing customer experiences

Other Products

Product

Product Segmentation

Personalization has historically been driven by segmentation

Other Products

Personalization has historically been driven by segmentation

Product

Product Segmentation

Personalization based on segmentation

provides the “wrong” experience for most of

your customers.

Not a revolution…but rather an evolution

Intent

Outcomes

Unit of analysis

Area of focus

What is affected

The definition of personalization is evolving

Customization Personalization Individualization

Tailor products to use

Improved productivity,

improved usability

None (everyone)

Application interface

Functionality

Drive desirable actions

and behaviors

Higher response /

conversion rates,

increased sales, increased retention

Segments or cohorts

Customer life cycle

Offers, recommendations,

marketing messages

Improve customer

experience

Higher customer

satisfaction, increased

relevance, reduced customer effort

Individuals

Customer experience

Functionality, core

content, user interaction

› See the Forrester report “Personalization And The Rise Of Individualized Experiences”

eBusiness leaders must

help organizations prepare

for the next evolution of

personalization,which will rely more on

data-driven individualization

rather than models of

segmentation.

it is a business strategy that drives tactics and impacts every part of an organization

Individualization is not a tactic…

Security & Risk

Enterprise Architecture

eCommerce

Application Design Merchandise Planning

Marketing

Customer Insights

Customer Experience

Individualization:Engaging customers as

a segment of one in real time by listening,

capturing, measuring,

assessing, and

addressing intent across

every enterprise touchpoint.

Rule: You can only truly personalize experiences for consumers you recognize

Increased digitization of experiences gives eBusiness Professionals access to an abundance of customer data

Profile Sentiment

Affinity Behaviors

Attitudes Content

Context

IdentityAccounts/IDs

Tech ownership/use

DemographicsPreferencesDisposition

Memberships/networksAffiliations

FeedbackRatings/opinions

InteractionsTransactions

Marketing responses

Testing responses

Time/locationEnvironment

Situation

Journey/activity

Social mediaApplications

Public records

Predictive analytics power determines success for creating relevant customer experiences

Old New

Today’s omnichannel consumers expectbrands to understand them…

Be careful to understand and respect personal boundaries

Proceed with caution: be overt about collecting data, but covert about

communicating what you know about the customer.

Email is a simple way to consistently identify customers…

…But Customers Must Receive Value In Exchange For Their Personal Information

Customer

Shopping

The North Face learns the “why” of customers shopping instead of the “what”

Online…

Acustom Apparel focuses on personalized design for each customer

In-store…

Neiman Marcus utilizes app engagement to personalize customer experiences

And even on apps.

Oakley: Missing opportunity

Sephora prioritizes understanding customers through digital engagement…

…encourages self-identification by providing personal experiences offline…

…and online, allowing them to better understand customers across all channels.

Systems of engagement are the tip of the spear…

Systems ofengagement

touch people

Systems

of automation

and IoT connect

the physical world

Systems ofrecord host

processes

Systems of insight power

digital business

But systems of insights power better engagement

Systems ofengagement

touch people

Systems

of automation

and IoT connect

the physical world

Systems ofrecord host

processes

Systems of insight power

digital business

Systems of insights often require the connection of a number of solutions

• Customer profiles & segmentation

• Customer preference management

• Cross-channel identity resolution

• Behavioralanalytics

• Customer journey mapping

• Web analytics and tag management

• Predictive analytics

• Self-learning algorithms

• Recommenda-tion engines

• Business rules management

• Mobile and location analytics

• Real-time content assembly

• Personalized, individualized delivery

• Online testing

• Reports and dashboards

• Offer and strategy optimization

• Attribution

Recognition

Context

Orchestration

Optimization

All possible data All possible actions

Most firms don’t consistently turn data into action

Source: Forrester Business Technographics®, Data & Analytics Survey, 2015

73% 29%of firms

aspire to be

data-driven

of firms are good

at turning data

into action

Organizations today must have robust tools on both sides of a customer experience strategy

Ways for organizations to use systems of engagement to drive individualization

Reprioritized interactions

proactively reshaping experience functionality

to better fit customer behaviors and needs

Systematized guidance

combining customer data with expert systems and other data to provide intelligent services

Curated content

eliminating or prioritizing core content to improve discovery and relevance

Tailored suggestions

targeting marketing recommendations, offers and messages to increase engagement and conversion

Lowe’s displays product availability and functions based on a customer’s store

Ways for organizations to systems of engagement to drive individualization

Curated content

JetBlue reprioritizes app functionality to show boarding passes close to a flight time

Curated content

True & Co learns from every returned item to fine tune each customer’s individual store

Curated content

Nordstrom and Shoes of Prey help customers find the perfect product through interaction

Metrics, Metrics, Metrics: It is important to be able to measure success

Source: April 16, 2015, “Get Customer-Obsessed With Your Content Marketing Processes” Forrester report

forrester.com

Thank you

Brendan Witcher+1 617.613.6315bwitcher@forrester.com

@BrendanWitcher

Customers expect more from the brands they engage with than ever before. How do brands meet these expectations, what is in it for them and how do we get there?

W H A T A R E W E T A L K I N G A B O U T

ECOMMERCE BRICKAND MORTAR

SOCIAL CALLCENTER

MOBILE

HOW BRANDS SEE THEIR ENGAGEMENT POINTS

HOW CONSUMERS SEE YOUR ENGAGEMENT POINTS

YOUR BRAND

TODAY’S CONSUMER

DIGITALLYSAVVY

HAS ELEVATED EXPECTATIONS

OF BRANDS

CONSTANTLY CONNECTED /

INFORMATION AT THEIR FINGERTIPS

IMMEDIATE GRATIFICATION /

NO PATIENCE

ME, ME,ME

BRAND BARRIERS

Legacy systems

(ecommerce platform, ESP,

DSP,…)

Siloed business functions(Digital

Commerce, Stores,

Marketing)

Disparate point solution

implementations

Limited and fragmented

understanding of customer

journey

1 2 3 4

• Unifying data at a segment or averaged level is of no use

• Need to understand each individual customer

• An averaged customer journey is no one’s journey

AVERAGED VS INDIVIDUAL

Let’s step back and look at our assets to address today’s consumer.

THE DATA LANDSCAPE

BRICK AND MORTAR

WEB / APP

• Referring URL

• Time of day visited

• Device/OS

• Location when visiting

• Time on site

• Items viewed/clicked on

• Items searched for

• Attributes of all items viewed

• Items added to cart

• Items purchased> Location

> Time of Day

• Where they last visited prior

• Time of day visited

• Device/OS

• Location when visiting

• Time in store

• Items viewed/tried on

• Items searched for

• Attributes of all items viewed

• Items added to cart

• Items purchased> Location

> Time of Day

BRICK AND MORTAR

WEB / APP

DATA POINT CONT RAST

ARE YOU MAXIMIZ ING ECOMMERCE DATA?

Are you capturing

robust 1st party data

and associating it with

an individual record?

• Visit history

• Products viewed

• Products purchased

Does your website

respond to this

data and customer

intelligence?

• Preferences

• Intent

Can you leverage

more than just

in the moment

but also a historical

perspective?

LOYALTY / MEMBERSHIP

CARDSAPPS

INDIVIDUAL COUPONING

W HAT ARE YOUR BRICK AND MORTAR DATA CAPT URE OPT IONS?

BRICK AND MORTAR DATA RICH

FASTCASUALDINING

GROCERY STORES

WAREHOUSECLUBS

WEB DATA RICH

APPAREL ELECTRONICS

AMAZON

TALE OF TW O CIT IES

W HAT CAN W E L EARN F ROMBRICK AND MORTAR SUCCESSES?

Need a distinct consumer benefit

• Discount price

• Free with x purchases

• Points program

Frequency helps

• Why do I carry this card around?

• Do I ever use this app?

UNIF YING CUST OMER ENGAGEMENT

Need a centralized database

Data needs to be in real

time responsive and available

Need a smart combination of predictive analytics and

strategic controls

UNDERSTAND YOUR GAPS AND ADDRESS

Is your online experience

individualized?

Do you retain historical

individual experience?

Do you have a brick and mortar

connection?

KNOW YOUROBJECTIVE(S)

• Map the customer journey

• Increased revenue through incremental purchases

• Decreased customer churn

• More efficient supply chain

• What are your KPIs?

• Is there a success threshold?

• Is there a fail threshold?

• Controlled rollout and timing?

MEASURINGSUCCESS

W HAT ABOUT T HE CUST OMER?

Is there a customer

benefit?

Is there a viral or

social element?

Will the customer perform in

the way you project?

Each brand and vertical has a unique solution and there is no one size fits all recipe. The best solution is to start sooner, learn more and stay ahead of your competition.

Find a vendor that can orchestrate/implement

• Too expensive to execute internally

• Not your brand’s core expertise (machine learning, Hadoop infrastructure, etc.)

• Many brands much larger than you have failed

RECOMMENDAT IONS FROM THE TRENCHES

The question isn’t when is your space going to have a great unified customer experience, it is who is going to execute it first.

QUESTIONSreflektion.com

Kurt HeinemannCMO, Reflektion

kurt.heinemann@reflektion.com

reflektion.com

Brendan WitcherPrincipal Analyst, Forrester Research

bwitcher@forrester.com

forrester.com

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