Marketing 360: Personalizing the path to purchase

Marketing 360:
Personalizing the
path to purchase
Results from survey of marketing
executives at leading U.S. retailers
www.symphonyretailai.com
Survey independently conducted by:

1. Introduction
A plethora of online and offline media is giving the modern shopping
journey many moving parts. But maximizing the customer’s experience-
and a retailer’s ROI- requires that messages and marketing vehicles be
seamlessly integrated, consistent and personalized.
The challenge is to determine which message and medium- and
combinations thereof work best. Through embracing the right 21st century
technologies, successful retailers are achieving this goal.
A Deloitte Digital survey1
of 3,000 U.S. consumers, found that 39% spend
more when receiving a personalized coupon, promotion or recommendation.
Almost one in three indicated that spending increases when digital is part of
the shopping process. According to the CMO Council2
, 94% of retailers said
Omni-channel marketing is “important or critical” to their goals.
With poorly executed initiatives, retailers risk bombarding, alienating,
confusing customers or losing their interest. To be successful, personalized
promotions must be supported by a robust customer data model to track
sales behavior, a Customer Relationship Management (CRM) platform to
gather customer profiles and machine learning. The latter analyzes large
amounts of data from multiple sources using rule-based algorithms that
identify patterns and trends for developing personalized marketing initiatives.
The survey focuses on the challenges faced by retailers in planning
and acting upon customer intelligence, omni-channel marketing, and
personalization programs in the U.S. This report summarizes the
findings from a 50-retailer survey of leading grocery, do-it yourself and
consumer electronics retail chains.
1
“Navigating the New Digital Divide”, Deloitte Digital Survey 2015
2
Omnichannel’s Missing Link”, CMO Council November 2016
1
“Navigating the New Digital Divide”, Deloitte Digital Survey 2015
2
Omnichannel’s Missing Link”, CMO Council November 2016
www.symphonyretailai.com 2
SECTION 1
Introduction
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Personalized Marketing
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Customer Profiles
SECTION 4
Customer 360
SECTION 5
Recommendations

Today, many retailers employ data-gathering and customer
communications tools like email, social media, apps and POS.
But when it comes to melding the internal data they gather and then
layering on outside data across online, in-store and other channels to
pinpoint customers with specific offers, they frequently come up short.
Many still rely on spread sheets and other manual tools. But the rise
of mega chains, international power houses like Walmart and digital
channels (e.g. Amazon), along with diversifying demographics, has
fostered a need for more sophisticated execution.
2. Enhancing the Customer
Journey Through

Retail marketers, suppliers and their agency partners’ measure
social and digital marketing program effectiveness as such customer
behavior data is easier to collect, update and analyze. On the other
hand, however, in-store and mass marketing ROI measurement by
store, time of day or by demographic group is still a laggard process
for a majority of retailers due to lack of focus or technical expertise for
detailed transaction log data, wallet share and other types customer
segment or market share analysis that can be used to improve
customer offers and marketing precision.
Retailers spend their marketing dollars on brand awareness, mass
marketing, in-store marketing, direct mail marketing, email marketing,
social and other tactical digital promotions. For the most part, retailers
carry out ROI measurement in a piece-meal manner as data models
for accurate measurement are either not yet implemented or currently
such processes are non-empirical.
The main hurdles in creating holistic customer intelligence and
personalization include but are not limited to the fact that retailers
are encountering siloed marketing operations, lack of clean data,
legacy solutions and inadequate resources. The other top business
challenges faced by a third of retailers are the inability to measure
marketing ROI and lack of data science applied towards marketing
programs.
Retail Marketing Challenges
42% cite a lack of data integration
across multiple marketing channels.
34% are unable to measure ROI
of marketing activities and lack data
based marketing campaigns.
Despite advancements made by retailers in gathering and using shopper insights for precision
marketing, according to this survey, 4 in 10 retailers are still unable to integrate Omni-channel
customer data effectively to create a single version of truth.
18% Lack tools/software.
16% Lack high end technology.
Other reasons for inefficiencies include:
SECTION 1
Introduction
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Customer Profiles
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Customer 360
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Recommendations

5
Both large and mid sized retailers cite inadequate data backed insights for marketing campaigns
as their third major challenge. Others have gathered hordes of data but do not possess the
technology- or technological expertise- to process it and put it to work.
Retailers with revenue $1 billion: Retailers with revenue =$1 billion:
47% point to an absence of data
integration across multiple marketing
channels.
35% cite an inability to measure/prove
ROI of marketing activities.
33% say they are unable to measure/
prove ROI of marketing activities.
35% indicate an absence of data
integration across multiple marketing
channels.
SECTION 1
Introduction
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Customer Profiles
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Customer 360
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Recommendations

New Data Sources
Five years ago, most data came from POS systems, loyalty cards and outside data companies.
These sources are still invaluable. But now, in addition to structured data sources such as POS
systems, valuable consumer insights can also be collected through unstructured data sources
such as beacons, Wi-Fi and store video intelligence.
8 in 10 retailers capture data internally
that pertains to shopping history.
7 in 10 retailers buy demographic and
financial information about customers to
help personalize campaigns.
When it comes to internal systems data, 80% garner data related
to purchase/shopping transaction history, 66% collect demographic
information, 62% gather financial information and 46% accrue location
information.
Financial services companies that issue credit and debit cards have
also improved data insights related to retail purchase behavior to a
fair extent. This has lowered entry barriers, letting retailers of all sizes
orchestrate better marketing and promotional decisions by combining
all resources.
Top 3 areas of customer provided data:
Top 3 categories of purchased data:
74%
Contact channel
preference
70%
Hobbies
68%
Lifestyle
56%
Loyalty
program
66%
Financial
information
70%
Demographic
information
SECTION 1
Introduction
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Customer Profiles
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Customer 360
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Recommendations

Internal systems data helps drive long-term customer loyalty and lifetime value down to the
customer-level based on loyalty, basket and trip frequency insights. Customer provided and
purchased data is assisting retailers in creating more personalized and precision marketing
campaigns to help support bounce back and new customer acquisition strategies.
Various sources of collecting personal data
Internal systems data Customer provided data Purchased data
Frequency of communication from you 62% 30% 52%
Demographic information 66% 44% 72%
Loyalty program earn/redeem data 38% 58% 56%
Purchase/Shopping transaction history 80% 28% 54%
Interests 26% 64% 44%
Financial information 62% 26% 66%
Social media activity 30% 66% 28%
Contact channel preference 16% 74% 36%
Hobbies 18% 70% 38%
Location information 46% 50% 38%
Lifestyle 12% 68% 40%
Source: EIQ Customer-Centric Campaign Marketing Management Survey, 2017
SECTION 1
Introduction
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Customer Profiles
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Customer 360
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Recommendations

In order to achieve profitability per customer purchase or order, among
other operational techniques, retailers need to apply a bigger focus
on achieving precision sales, marketing and customer personalization
within and outside the store.
While all these objectives can drive profitability and customer focus,
effective price promotions and loyalty offers are one of the oldest and
most popular strategies for driving basket size, customer retention
and customer traffic. To be effective in today’s highly competitive,
technologically charged landscape, retailers must use them creatively
to drive sales without seriously eroding profits and margins. A fifth of
retailers said they want to increase effectiveness of pricing and
price promotions.
Pinpointed price promotions can also increase customer loyalty.
Offering cat litter at a reduced price in a general sale, for example,
may draw customers and create some add-on sales of other pet and
non-pet items. Micromarketing to repeat shoppers who own three
or more pets, though, will generate more add-on sales and repeat
traffic among a group who is serious about pets and always seeking
a deal. But retailers need tools and data to learn who these multi-pet
consumers are to target them.
This will help them keep on track as far as both top-line and
bottom-line target or budget attainment. And a similar number of
retailers would like to achieve customer nirvana through customer
satisfaction surveys and net promoter scores.
Effective Margin and Optimal Price Promotions
8
According to the survey, key business objectives for retailers to be met in 2018 includes increase
profitability and customer retention, enhance customer acquisition and build focus on customer
satisfaction/net promoter scores (NPS).
80% of retailers consider increasing
profitability as the top most business
objective to be achieved in 2018.
One third of retailers consider
customer retention as a key business
objective to be achieved in 2018.One third of retailers are also hoping
to attain offline and online customer
recency, frequency and monetary
objectives in 2018.
SECTION 1
Introduction
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Customer Profiles
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Customer 360
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Recommendations

Both physical and online retailers are challenged by an
increasingly fragmented media market. Historically, retailers relied
on local radio, network TV and major print publications.
Today, there are myriad media formats, with shopper adoption
driven by demographics, category and other factors. Choosing
promotional vehicles and combinations can be challenging.
3. Building customer
profiles: A deep dive

10
Over the next 12 to 24 months, many retailers plan to increase use of personalized marketing tools. Top initiatives include:
74% target customers based on
engagement in loyalty initiatives.
88% of retailers target customers across
different communication channels.
56% target customers according to
their precise location.
60% market to customers based on
items browsed online.
With numerous ways emerging to reach customers, marketing methods targeting customers
across different communication channels is being currently used by 9 out of 10 retailers.
Targeting customers based on their preferred shopping channels and in real-time are upcoming
methods to be used.
Personalized Marketing Strategies
48%Target customers
based on their
preferred shopping
channels
48%Target customers
in real-time
42%Target customers
based on “Remind
me” option
40%Targets
customers based
on demographics
SECTION 1
Introduction
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Customer Profiles
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Customer 360
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Recommendations

Types of Omni-channel Marketing
11
Digital advertising is the most popular omni-channel medium among retailers, followed by
corporate web sites, mobile and social media. But two decades ago, digital advertising was just a
bunch of (often annoying) banners placed prominently on web sites. Today, there are myriad forms
of digital advertising, based on target audience, web content and call to action.
“We have shifted more and more outside of TV, where digital makes up over 50% of our media buy.
If a product is targeted at Millennials, we know they are less tuned in to traditional TV and are on their
phone, tablets and streaming services. We make sure we have the right location as well as the amount
of breadth and are speaking to them consecutively.”
- Senior Manager, Brands, major confectionery company
Assessing the customer reach capabilities (High)Priority spend channels for reaching customers (High)
Social media 86%
Offline advertising (TV,
billboards, flyers, etc.) 56%
Web search platforms 50%
Display (banner ads, rich
media, etc)
48%
Direct Mail Marketing 44%
74%
Ability to carry out personalized
digital marketing
60%
Ability to do personalized
offline marketing
50%
Ability to personalize web content
based on purchase history
46%
Ability to carry out personalized
content in direct mail
18%
Ability to personalize
content in email
Source: EIQ Customer-Centric Campaign Marketing Management Survey, 2017
SECTION 1
Introduction
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Customer Profiles
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Customer 360
SECTION 5
Recommendations

1. Social Media
Fueled by smart phone and wireless Internet technology growth, social
media has become an essential customer service and sales channel
over the past six years. Facebook has around two billion monthly
users, with five new profiles created every second. Photo uploads
total 300 million daily. And one in five page views in the U.S. occurs on
Facebook3
.
86% of retailers invest heavily in social media marketing. Since users
join using their name and other personal information and choose to
“follow” certain companies, social media can reach specific individuals
and track their activities.
2. Better Email Campaigns
Companies often send emails that are too general and frequent,
making customers ignore them. According to the survey, email has
emerged as a low-priority spend by 40% retailers. However if used
properly email can be effective.
The Direct Marketing Association’s (DMA) Demand Metric’s “2016
Response Rate Report” found that well timed and targeted email
had a median ROI of 122%- more than four times higher than other
marketing formats, including social media (28%), direct mail (27%)
and paid search (25%).
3
Facebook
4
Closing the Loop, the Last 1,000 Feet of the Shopping Experience, Forbes, March 2016)
3. Pinpointed Mobile Messaging
In-store mobile messaging has probably received more press than
action. But as more retailers employ beacons (introduced about two
years ago) use and effectiveness could improve. According to the
survey, one-third of the retailers feel that mobile messaging has a low
level of effectiveness.
A shopper entering a store must opt-in, allowing the retailer to interact
via this location-based smart phone technology. Beacons can tell
customers which products to find in specific areas. Or, for shoppers
entering the cat food section, the technology can spit out a coupon or
offer for a specific brand.
According to a Forbes study4
, only 13% of retailers use the
technology. But many have not ventured beyond the pilot phase,
having installed beacons in just a handful of stores.
Machine learning can be used to schedule emails based on behavioral
triggers and audience segmentation. for e.g., “We saw you tried to
order that item last week in the store and it was out of stock. But we
have it online and will give you 10% off for the inconvenience.”
SECTION 1
Introduction
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Customer Profiles
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Customer 360
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Recommendations

4. Direct Mail
“Offline is quickly becoming online; just give it another
three years. Even with networks you will be able to change
messaging based on area. If you want to use the traditional
definitions, T.V. vs. digital budget would be in the usual 65-
35%.”
- VP of Brand Marketing, leading beverage company
Direct mail is used frequently despite its high cost and low ROI. Many
shoppers still engage in DM with their favorite retailers, staying up to
date with what’s happening locally. According to the DMA’s web site, the
typical response rate from a mailing campaign is around 4.4%, compared
to 0.12% for email campaigns. This could be the reason why 44% of the
surveyed retailers consider direct mail marketing to be a high priority
spend channel.
Narrowing down the group by household makeup, lifestyle or ethnicity
can make it very targeted and precise. This is particularly true in grocery
where different people have particular food interests. And personalization
often means targeting people in a radius that may only be a few miles.
46% of retailers have the ability to create personalized content for direct
mail.
5. Recommendation Engines
Amazon is a pioneer when it comes to recommendation engines.
Products displayed after a user logs onto the site are based on his/her
unique purchasing and browsing history. Twenty-five percent of Amazon’s
sales are estimated to come through recommendations. Today, Amazon
is marketing its easy-to-use, highly scalable search and other machine
learning technologies to outside companies. Among other retailers, 50%
can personalize content based on web history.
5
Market Track Shopper Insight Survey, January 2017
Popular vehicles embraced by grocery shoppers5
32%
Use digital coupons to
find deals
26%Use emails from retailers
23%
Use the digital version of a
print circular
15%
use retailer smart phone
apps
SECTION 1
Introduction
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Customer Profiles
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Customer 360
SECTION 5
Recommendations

Targeted Personalization Programs
14
To maximize ROI, most retailers must personalize marketing for large numbers of customers. To
do this, 60% prioritize use of marketing automation, while 52% are enhancing customer loyalty
programs. These are among the top capabilities among retailers surveyed.
2. Building customer profiles: A deep dive
Other high priority personalized marketing capabilities
include:
1. CRM and Machine Learning/AI
CRM systems collect data across contact points, including online, via
telephone, live chat, direct mail, in stores or via social media. AI and
machine learning gives machines access to data and lets them “learn”
for themselves. This involves rule-based algorithms and computers
that identify patterns and trends by automatically analyzing large data
quantities.
By combining CRM data with machine learning, 360°profiles can be
created involving preferences, past purchases, weather, return history,
complaints and other factors. By breaking down contact point “silos,”
retailers learn which domains or events to prioritize and how they can
link back to positive or negative outcomes.
Using different platforms, retailers can also curate social media
content that targets particular consumers. They can even decipher
consumer comments beyond just picking up key words, allowing them
to gain valuable feedback. In addition, algorithms can be trained to
recognize language patterns. For example, a post regarding Tide
detergent (e.g., “Tide cleaned my clothes”) would not be categorized
with one discussing beach resorts (“high tide at noon”). Conversations
can be further dissected to identify happy and unhappy Tide
customers. In addition, algorithms can be trained to exclude spam, like
posts about winning free Tide.
This type of data-activated marketing can boost total sales 15% to
20% and improve ROI on marketing spent across channels, said
McKinsey Co. Among retailers with revenue $1 billion, 40% want
to improve enterprise CRM systems.
34% Improving enterprise CRM systems.
34% Revising customer strategy, segmentation contact planning.
28% Optimizing CPC/supplier funding of offers.
18% Optimizing SEM/SEO practices.
SECTION 1
Introduction
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Customer Profiles
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Customer 360
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Recommendations

2. Next Generation Loyalty Programs
Loyalty programs have been around for some time. But many are
in jeopardy because they are too cumbersome. They require active
reminders, engagement and physical cards. To work, today’s loyalty
programs must connect all touch points and channels and be
activated via mobile phone at checkout.
According to EKN Research (a divison of EIQ Research
Solutions) (“Digital Transformation- The Power of
Physical to Digital Loyalty,” January 19, 2017) Omni-
channel approach yields 13.4% higher basket sizes and
11.2% more profitability than single channel initiatives.
Top 3 personalized marketing priorities
Increasing use of
marketing automation
63%
Enhancing customer
loyalty programs 40%
Improving enterprise
CRM systems
40%
Retailers with revenue $1 billion
Enhancing customer
loyalty programs
70%
Increasing use of
marketing automation
55%
Revising customer strategy,
segmentation contact planning
30%
Retailers with revenue = $1 Bn
SECTION 1
Introduction
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Customer Profiles
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Customer 360
SECTION 5
Recommendations

4. Customer 360
Obtaining a 360-degree understanding of what customers need
has long been regarded as the Holy Grail among retailers in that
it results in better tailored offerings that address specific shopper
requirements.

Net Promoter Score (NPS) is a metric for assessing shopper
loyalty for a brand, product or service. Many companies use
NPS as part of their CRM strategy because the metric is easy
to calculate.
CSAT (Customer Satisfaction) measures short-term
happiness, or how a customer feels regarding a service or
product. Unlike NPS, it does not address how a customer
feels about a company overall.
To create comprehensive customer views, more than half
of retailers gather inputs related to customer satisfaction/
NPS and data from every channel to generate customer
profiles based on a single identifier.
Comprehensive shopper view
Close to one fifth of retailers either
have none or inadequate information to
generate customer profile based on a
single identifier.
30%Attributes include
customer
satisfaction, NPS
28%Attribute data from
every channel to
customer profiles
based on a single
identifier
26%Real-time
customer behavior
tracking
14%Attribute data from
one or two channels
to customer profiles
based on a single
identifier
2%Do not have
a single
customer
view
SECTION 1
Introduction
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Customer Profiles
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Customer 360
SECTION 5
Recommendations

Campaign Success KPIs
18
This is followed by customers satisfaction/net promoter score (32%),
loyalty membership (24%) and attachment rate (22%).
Evaluation methods can be based on types of campaigns used as
well as what the campaign’s purpose is. If the goal is brand building,
for example, the first indicator would be brand awareness rather
than sales/revenue growth. Retailers may also look at a particular
indicator to determine the effectiveness of a certain initiative (e.g., an
email campaign).
The importance of different measuring tools can vary by a retailer’s
size. Companies with revenues $1 billion, along with those with
revenues /= $1 billion, list company sales/revenue growth as their
primary indicator. For 33% of larger entities, this is followed by
customer satisfaction score/NPS and attachment rate (23%). Smaller
retailers put equal emphasis on these latter two metrics.
Retailers use a number of metrics/key performance indicators to determine the
success of their marketing efforts. The overwhelming majority, 60%, rely on
company sales/revenue growth, which is the most obvious indicator sought by
stockholders.
60%
Company
sales/revenue
growth
32%
Customer
satisfaction/
net promoter
score
24%
Loyalty
membership
22%
Attachment
rate
20%
Customer
bounce
rate
SECTION 1
Introduction
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Customer Profiles
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Customer 360
SECTION 5
Recommendations

5. Recommendations

Recommendations
Define the evolution of your customer
segmentation and customer focus in line with
corporate objectives of this year.
Eliminate loyalty initiatives that need active
reminders, engagement and that only use
physical cards.
Determine whether the message should be
simple or have many moving parts involving
multiple delivery vehicles.
1.
Employ AI and machine learning to
analyze large amounts of data from myriad
sources using rule-based algorithms that
identify patterns and trends for creating
personalized marketing campaigns.
10.
6.
Establish a clear purpose for all marketing
initiatives- are they intended to drive brand
awareness, appeal to a new customer group or
introduce a new product or line?
4.
Compile inputs related to customer satisfaction/
NPS and data from multiple channels to create
shopper profiles based on a single identifier.
8.
Explore use of beacons for targeting in-
store customers via their mobile phones with
announcements and offers.
3.
2.
In addition to bricks/clicks tie-ins, explore
cross promotions across multiple banners
and businesses when applicable (e.g., grocery,
fuel, pharmacy and discount formats).
9.
Utilize POS to track sales behavior and a CRM
platform to gather customer profiles.7.
Avoid email initiatives that are too general and
frequent. Use machine learning to schedule
emails based on behavioral triggers and
audience segmentation. Create loyalty programs
that connect all touch points and channels and
can be activated via mobile phone at checkout.
5.
SECTION 1
Introduction
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Customer Profiles
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Customer 360
SECTION 5
Recommendations

Symphony RetailAI is the leading global provider of Artificial Intelligence-enabled
decision platforms, solutions and customer-centric insights that drive validated growth
for retailers and CPG manufacturers, from customer intelligence to personalized
marketing, and merchandising and category management, to supply chain and retail
operations. We are trusted by over 1,200 organizations including 15 of the world’s 25
largest grocery retailers, thousands of retail brands, and hundreds of national and
regional chains worldwide to help solve their toughest business problems, through Ai-
powered customer intelligence and retail solutions.
Intelligence, analytics, and a personal touch for today’s smart marketers
Symphony RetailAI’s Marketing Manager ’s Suite is helping FMCG retailers globally
to consistently personalize offers to deliver one-to-one relationships. We do this by
applying a 360° view of the customer so you actually can better understand them. Our
analytics and intelligence make is easy for you to increase trips and basket size for your
best customers through targeted marketing programs that have the personal touch that
helps you stand out in today’s market place.
https://www.symphonyretailai.com/marketing-manager-retail/
With thanks to our research partner:
About Symphony RetailAI

Marketing 360: Personalizing the path to purchase

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