While global marketers responding to a recent survey attested to focusing more on customer acquisition than retention, senior US retail executives surveyed by KPMG for a new report [pdf] believe that customer retention will be the most significant driver of their company’s revenue growth over the next 1-3 years. That reflects waning customer loyalty in the retail sector, and is likely a driver of retailers’ increased customer-centric focus.
Indeed, some 41% of respondents plan to increase their investments over the next year in technology that directly enables them to better engage and serve customers, including one-quarter who will be upping their spending for such technologies by more than 10%.
In terms of the channels that will be supported by technology investments in the coming year, the company web site (67%) is the most common, followed by physical stores (47%), social media (46%) and mobile (40%). Those investment priorities come as retailers identify social media as the technology-related trend having the biggest impact on their organization – with other key trends including multi-channel consumer engagement/commerce, the use of in-store mobile technology by store associates, and waning store/brand loyalty as consumers become more empowered.
In order to better respond to more empowered consumers, retailers are using data and analytics to help support strategic decision-making in a variety of areas. Not surprisingly, customer insight (63%) is the area in which most retailers are using analytics, even if they still struggle to obtain a single view of the customer across channels. Beyond customer insights, retailers are also using analytics to bolster brand and product management (53%), pricing decisions (50%) and market expansion (49%).
Interestingly, unlike other studies demonstrating marketers’ problems using data, retailers responding to the KPMG survey appear relatively confident in their analytics sophistication. Presented with 4 statements and asked which best describes their organization, almost 6 in 10 indicated that they have access to data, have the resources to analyze it, and use it to make strategic and operating decisions. By contrast, only about 1 in 8 said they have access to data but aren’t using it as effectively as they could for decision-making.
About the Data: KPMG’s 2014 Retail Industry Outlook reflects the viewpoint of 100 senior US retail executives. The web survey was conducted during the spring of 2014. Half of the respondents come from companies with at least $1 billion in revenues.