RSR Research: Introducing 'The Engaged, Customer-centric Retailer'
Through a special arrangement, presented here for discussion is a summary of a current article from Retail Paradox, Retail Systems Research's weekly analysis on emerging issues facing retailers.
We'd like to present a new model for successful retailing - one that RSR calls The Engaged, Customer-centric Retailer. This model is the logical follow-on to what we called TECC, or Technology-enabled Customer Centricity.
We coined the term TECC in early 2007. While the words don't flow easily off the tongue, the concept helped us explain how retail winners were starting to solve the paradox of improving customer service while holding the line on payroll costs. They were adding technology to support customer-centric initiatives and improve store execution in general. We called that TECC in the store.
On the merchandising front, adding the customer dimension of data to merchandising applications covering planning, allocation, replenishment, pricing and promotions is the key that unlocks the door to localization of those functions. Behind the scenes, we called that TECC Merchandising.
And of course, adding the customer dimension to data warehouses can help measure and quantify organizational success. Yes, we can call that TECC Business Intelligence.
The only fly in the ointment of TECC is it doesn't provide a feedback loop between retailers and their customers. We might know what customers buy, but we don't necessarily know how they "feel." And how they feel is directly correlated to their loyalty.
Over the past three years we have witnessed the explosive growth of social networks like Facebook, Twitter and MySpace, along with other Web 2.0 interactive sites. We've struggled to understand the value for retailers. Even now, as retailers continue their land grab of Facebook pages and Twitter IDs, the value often remains unclear. Dell has created exclusive promotions for their Twitter "fans," but no one can really quantify whether these were incremental sales or just margin giveaways.
As part of a client project, the light finally went on in our heads: the aggregation of the data obtained from social networks, customer service emails and other unstructured consumer remarks give retailers an almost instantaneous vision into their customers' sentiment, and allows them to engage with those people. We can find out how they feel. For better or worse (because they really might NOT like what we're doing), we can move beyond the noise associated with the squeaky wheels of individual customer dissatisfaction to an overarching sense of what customers like about our products, our service, and our employees. In other words, retailers can use technology to engage with their customers.
We present, for your review, our model of The Engaged Customer-centric Retailer (TECCR):
Once the model is rock solid and thoroughly understood, we'll create some tools to help retailers see where they fall in the continuum. Some retailers may be heavy to the left, others may find their strong suits on the bottom, but the best will find themselves squarely in the center.
Discussion Questions: In which quadrants in the TECCR model do you think most retailers are most engaged? Where do they need the most work in order to reach the middle for optimal customer engagement?