Algorithms have become instrumental in retailers’ strategies to increase loyalty among customers. We don’t know of any major retailer not having a Big Data team working on a.o. predicting churn, couponning, increasing loyalty, new segmentation, …
Yet, what we also notice is that all retailers more or less all use the same tools, the same techniques for the same goals. It’s all about Spark, Hadoop, real-time processing and it’s true that technological progresses will certainly represent a step forward in terms of customer experience. Imagine that a personalized list of coupons is given when you enter the store. That’s currently what all retailers wants to do. Such advances require more processing power which Cloud-based offers like AWS, Bluemix and Azure are now making real.
Yet, the goals, tools and techniques being the same, there will eventually be no real differentiation among retailers. Where will this differentiation come from ? In our opinion the Human factor and the quality of service is the next problem to be tackled.
Personalization has been tackled by retailers from the operational side until know but the Human-powered personalization has remained out of scope. Yet, studies show that retailers with a strong emphasis on service quality don’t need to force their customers’ loyalty through discount. A good example of this is Spanish retailer Mercadona which doesn’t need coupons to increase the loyalty of its customers. Instead Mercadona is betting everything on service quality to increase customer satisfaction and loyalty.
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Tags: data mining, retail, service quality