Marks & Spencer CEO Steve Rowe recently explained in Marketing Week that the British multinational retailer is looking to use data to "make M&S great again." In other words, he believes data will help M&S return to its former glory of one of the world's leading retailers.
He's got the approach exactly right.
From Brand-Focused to Customer-Focused
Traditionally, retailers have been focused on opening as many stores as possible and stuffing them full of as many racks and shelves and products as possible—then hoping that customers want to come buy something that they have for sale. But many brands are coming to understand that throwing choices at customers while offering a mediocre-at-best experience will not enable them to succeed in the age of Amazon and other ecommerce offerings.
Instead, retail brands (all brands, in fact!) need to start with the customer. They need to understand the customer—deeply—and use this understanding to architect the entire buyer's journey in a way that helps customers to achieve their goals or complete their jobs. Brick and mortar stores still have an important role to play in this journey, but not as they have traditionally functioned.
Personalization—Beyond a Name in an Email
M&S is using their data to rethink everything about their retail experience, from store locations to which products are on the shelves to pricing and promotion strategy. They're taking the approach of first understanding the customer, then matching everything else to the customer's needs.
For example, customer data said that M&S stores were lacking in inspiration and there was too much space. So the retailer is stepping up its closure program, shutting more than 100 existing locations for clothing and homeware—around 30% of its store estate. Some will be relocated to more desirable locations, and the remaining stores are being redesigned.
This data-driven approach to brick and mortar locations is working: "In the first half, M&S closed six stores and relocated two of them—with sales retention 'substantially higher' than it expected."
The retailer is also using data to tailor what is available in each store location. Some shuttered stores will be replaced with a standalone food offering, and others are focusing on growth areas like kids, home and footwear. For locations that offer clothing, M&S has reduced its range, focusing on cut, quality and improving pricing instead of volume of choices.
Finally, M&S is looking to bring more digital innovations in-store, such as fitting room technology and "scan, pay and go" (True Religion provides a great example of a store incorporating digital technology into its brick and mortar presence).
What this all comes down to is using data to tailor the brand's offering to meet the customer's needs. This is personalization at its best. The brand is going far beyond "Dear Karen..." in their promotional emails. They are actually personalizing locations, offerings, pricing and technology to meet specific customer demands.
Experience is Critical for Retention, Growth
This optimized experience with the brand is important. Juxtapose this with some of the big-name, big-box stores that have been closing stores in the past couple of years. They function more as physical warehouses that force customers to search for products instead of creating a useful experience that helps them along in their buyer's journey. Marks & Spencer could easily have found themselves in this position, but they're turning things around with a customer-first approach.
An engaging, personalized experience differentiates the brand, draws customers in, helps to smooth the path to purchase, and aids the brand in developing lasting relationships with its customers. Consider the Apple store, which is designed to help customers experience Apple products with knowledgeable product experts on hand to guide purchase decisions and fix problems. BMW is beginning to take a similar approach, where the dealership is meant to be an experience center in which customers can feel what it's like to be an owner of a BMW and part of the BMW family. Samsung has created the ultimate experience center, designed for customers to experience the best of the brand—without buying anything at all.
Gabriel Mas, Director and Head of Marketing for Services & New Businesses at Samsung Electronics America, explains the Samsung Experience Center:
M&S is headed in this direction.
How to Decode Your Customer's Needs
To orient your own brand around your customers and their needs, you must first understand what they are by gathering the right data. We recommend starting with the Outcome Driven Innovation (ODI) and Jobs-to-be-Done methodologies. People buy products and services to get a “job” done, and customers use numerous metrics to evaluate success when getting a job done ("desired outcomes"). By knowing how customers measure value when getting a job done, companies are able to align the actions of marketing, sales, planning development, and R&D with these metrics and systematically create customer value.
Evaluating your own customer experience and buyer's journey through the lens of ODI and jobs to be done, you'll have all the data you need to identify what needs to change in your retail strategy—just like Marks & Spencer has. We've published a step-by-step process guide here: Decoding Customer Needs with the Buyer's Journey Framework.
As Rowe explains, “When we get things right for customers we are unbeatable. However, the world around us is changing, and we need to move faster to keep up."
This applies to all retail brands: it's time to move fast to meet the needs of your customers.
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