By: Joe Brookes, Which-50
Thoryn Stephens has a blunt message for retail organisations regarding their future. The former Chief Digital Officer of American Apparel told Which-50, “Retail operations that do not embrace digital transformation, customer-centricity, and rapid experimentation will wither and die, and rightfully so”.
The survivors in a customer-centric world will be brands that adopt agile, data-driven personalisation strategies, he said.
"Customer-centricity should be the foundation of every data-driven business — retail, digital or other."
Stephens, who led American Apparel’s digital efforts from February 2015 to October 2016, discussed the value of personalisation and customer-centric approaches to acquisition and retention at ADMA Global Forum 2017.
“The businesses that can meet changing consumer demands through rockstar omnichannel consumer experience will ultimately prevail,” he said.
A key part of this strategy is personalisation. Indeed, Stephens describes real-time one-to-one personalisation as “the holy grail”. It’s something that is missing from a lot of customer interactions and, while digital is key to achieving it, Stephens thinks that many retail organisations are lagging.
“A hundred years ago, when you went to your local corner store to buy groceries, the shopkeeper would identify you by name. Knowing you personally, and what you might typically purchase, the shopkeeper might make recommendations on new products that just arrived, or see if you’d like your usual order.
“This personalisation of service has been lost in the retail experience. Ironically, even within digital ecosystems, it has not improved nearly enough.”
Real-time one-to-one personalisation has been “evangelised” by major marketing clouds like IBM and Adobe, but has been “generally unattainable,” Stephens said.
Historically, the biggest challenges have been “data availability, system interoperability and IT challenges,” according to Stephens. Digital is reducing these barriers and providing data, but organisations must ensure they are utilising the right data, Stephens said.
“Businesses are often inundated with the metrics du jour — Facebook or Instagram followers or likes, or Twitter followers,” he said. “While these metrics can indicate consumer engagement, they rarely reveal business health or profitability — and they can lead the business astray.”
Instead, organisations may find more useful insights in customer-centric metrics like customer lifetime value (CLV) and current customer value (CCV), Stephens said. “[They] are major drivers and indicator metrics for customer retention, churn, revenue and profitability, and are being built into business financial statements such as P&Ls.”
Stephens’s expertise is in the retail sector, but he said the personalised customer-centric approach should be applied to all data-driven organisations. “In its simplest form, it’s focusing the business on identifying the highest-value customers, how to retain them and how to find more of them,” he said.
“Customer-centricity should be the foundation of every data-driven business — retail, digital or other.”