Previously, it was the shopkeepers who wielded power in the retail trade. They selected the products to be included in the assortment, which were then offered for sale at selected outlets at times convenient for the shopkeeper. Consumers had to satisfy their needs from what was available. Now in the Internet age, the world is open: products and services are available practically without limit around the clock and customers have access to stores irrespective of their location. The power has been usurped by consumers. A great change is taking place where the biggest challenge facing retailers is how to adapt and find ways of standing out from the crowd.

Customers are no longer driven primarily by needs. With today’s extensive freedom of choice, the customer experience created in the course of the transaction is often the factor that determines where consumers want to buy products and services more than the price. Customers are always left with some of sort of experience from every encounter: good, neutral or bad. The greatest competitive advantage is enjoyed by those who are able to make these experiences unforgettable – to give the feeling that I am important to them as a customer. The experience-based approach has generated numerous new ideas in marketing. One of the most important insights is the perception of the consumer as a person, where the value received by him/her consists of the sum of all encounters with the company, product or brand across all channels.

Responding to customer requirements is quite a challenge to retailers. It calls for understanding who the customers actually are, what individual needs they have and what motivates them to use your products and services instead of somebody else’s. With hundreds of thousands of customers and numerous contacts points, providing an individual service sounds like a major challenge. With hundreds or even thousands of variables at play, conventional methods are no longer enough.

Understanding customers as an enabler of customer experiences

To be able to establish a personalised dialogue with a customer, offer relevant products and services to them and at the same time create encounters that touch a nerve, we need data. And not just about facts who the customer is and what he or she has bought earlier, but data shedding light on the customer’s behaviour, values and preferences.

Online stores possess huge amounts of such data. We are able to identify the customers, see where they accessed the online store from, what products they viewed, how much time they spent on the site, what they bought and at what point they left without buying anything. Online stores are able to harness these data by offering personalised purchasing experiences: to optimize each step of the customer path so that we can offer exactly the products they are interested in based on previous purchases and use various ways of motivating them to do business with us; to engender personalised experiences providing a basis for establishing long-term customer relationships; to give the impression that we know you personally.

For storefronts, this was a challenge for a long time since there were few tools available that allowed them to understand their customers. Shopkeepers may have known who the customers were and what they bought, what other products they were interested in, what they did not buy and, above all, why they frequented the store – or never came back as the case may be! However, modern technology now makes it possible for us to digitize the shop using various sensors and so analyze customer behaviour in physical locations almost as effectively as in online stores.

To digitize the shop, it is possible to use video, Wi-Fi or Beacon devices that collect information on customer behaviour inside the shop. They allow us to analyze individual purchasing paths, see what the products customers are interested in, what they buy and what they discarded, and even tell us what they think about the products and services. As the storefront is the key platform for providing unforgettable customer experiences, understanding customer behaviour inside the shop is of critical importance.

Aside from storefronts, other channels, such as online stores, mobile purchasing, the social media and various customer feedback channels, play an equally important role in creating a multi-channel customer experience. To make this possible, it is imperative that the data gathered from the various sources are stored in a single location providing a 360-degree picture of the customers. And it is not enough that the data are located in one place – the same customer understanding must be utilised across the entire organisation.

A truly customer-centred business model calls for a change of culture

Sadly enough, each organisation tends to have their own narrow view of the customers with the result that the customer experience may become highly fragmented. Recently, I talked to the marketing director of one of Sweden’s largest food chains. He said that their online store was unable to make any use of the company’s in-house loyal customer data because it operated as an independent business unit. This goes to illustrate that often the challenge does not lie in the system itself, but in the change of culture that any company with an ambition to become genuinely customer-centred is compelled to deal with. Change calls for the literal demolition of in-house silos and walls between departments and units to make it possible to build a customer-centred business model based on customer understanding and a shared mission to provide unforgettable experiences across all channels.

This is the only way of allowing the customer to interact in the preferred channel using the preferred device at the preferred time, and at the same time have the feeling that he or she is known and greeted as a person. It is the only way of understanding how to provide a unique service and tackle the issue of how to stand out from the crowd in a business environment where the competition is just one click away.