"You should never collect data you would need to keep secret from the customer"

The increasing digitalization in retail helps retailers get to know their customers better. After all, the modern shopper leaves his/her data at every touchpoint – whether that’s in the online store, during mobile shopping or directly at the store by using loyalty programs. Axel Jahn, Managing Director of Netpioneer, develops custom eCommerce solutions for his customers. In this interview, he explains how retailers can use this data to their advantage.

Mr. Jahn, how does integration of a retailer’s important data work if this type of project is a brand-new set-up?

At first, it is vitally important to make retailers understand that all services and functions are completely available in real-time at all touchpoints, so that customer data can also be utilized and updated there.

What particular challenges arise from the expansion of existing systems?

Particularly retailers with a big and often international branch network have different data pools that need to be merged into one single system for this type of project. Typical challenges are for the existing customer data systems to actually be able to collect and process the amount of data and virtually do so in real-time without notable delays.

What’s more, the system needs to be designed for online use, which results in additional requirements for security and availability reasons. Whenever it is technically feasible, we generally prefer to continue using the existing system. However, oftentimes a new development is unavoidable or at least more economical.

Generally speaking, what type of customer information are we talking about here? What is being collected and how does this data benefit the retailer?

Primarily data that offers the customer the biggest benefit is being collected. We therefore collect data on shopping habits, main interests, preferred channels etc. Generally, however, we only collect data whose benefit the customer is able to understand. You should never collect data you would need to keep secret from the customer. The advantage here is the increased benefit for the customer. Custom sales and quick service processes increase customer loyalty and lower the risk of customers switching retailers.

Keyword “big data“: how can a retailer ensure that all customer data collected at the different touchpoints is being merged and ready to be analyzed and utilized at any time?

The primary foundation is a modern customer data solution, which originates in enhancing the existing system or often through a new development. The retailer needs to consistently consider the related processes from the end user’s point of view and strive for an integrated service experience. To do this, retailers also need to challenge existing processes and change them if necessary.

There is generally no standard practice for this. Yet it is important to keep consolidating experiences in both brick-and-mortar and online retailing. If needed, the retailer should also seek the advice from an expert eCommerce service provider to design and implement custom processes.

Netpioneer recently developed a central customer data management system for a well-known retailer with a large network of branch offices. What were the specific challenges with this project?

The biggest challenge with this project was the seamless integration of the new solution into the existing, well functioning IT systems as well as process coverage in both brick-and-mortar and online retail.

Fast response times, around-the-clock availability, data safety requirements for online use and high robustness in a big data environment to handle large amounts of data, are core characteristics of the new customer data management system. However, the journey is by no means over yet; there are always new use cases that are successively implemented.

How important is access to comprehensive customer data for retailers today?

You cannot stress the importance of this enough. Customer perception is generally changing: the customer no longer differentiates between brick-and-mortar stores and online services for the sake of the channel, but decides based on the situation where he/she wants to shop. This means for retail to offer its customers a seamless switch between channels and actually support it. To do this, retailers need integrated customer data management across all channels. This pertains to different data types: ranging from customer identification via preferences and order history, supplementary products, replacement parts and consumption type items all the way to rewards and sales campaigns.

Today’s customer is educated and knows that every company collects data. In return, he or she expects custom services and processes based on his/her interests. Aside from meeting increasing customer expectations however, this also offers retailers the chance to increase sales with their loyal regulars through proactive sales offers, while utilizing continuous data collection as customer feedback to consistently improve range of services and pricing.