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The data bonanza: the future of retail is customised

26/06/2014 | Matthew Robins

High street data

A few weeks ago, a good friend of mine complained to me about an experience she'd had whilst shopping in Next.

"It's no wonder retailers in St Helier are struggling," she told me.

"I was looking at a dress and a lady with a clip board approached me and told me it would suit me. Then she asked if I had considered it in different colours. She went on to explain that if I liked the dress I might do well to go on the website and order direct from there," she continued.

"What's the point of that? That saleswoman lost her commission!"

On the face of it, my friend's indignation makes sense. Why would a sales person in a shop want to steer a customer away from her own till to make a purchase online at the same retailer's website?

The answer is data.

If you or I go into Next on our local high street and buy an item at the till, whether by cash or card, they learn nothing about us, our preferences, age, size or purchase patterns.

If we buy the same item on their website, we start a data-based relationship with them that opens the door to potentially unlimited opportunities for them to grow their future revenues from us as an individual consumer.

In this context, it makes total sense for a high street brand to use its bricks and mortar outlets to drive more traffic to its website.

We've been commenting for some time here that "multi-channel retail" is the future for most who currently operate only from physical premises. Thriving businesses in Jersey like www.mypad.je, www.thelovingchaircompany.com and www.dunells.com have already shown the way in this regard.  

Geoff's blog post about local search marketing from Tuesday this week gives some astonishing statistics from Google research that shows how powerful the intersection of online mobile search and local physical retail can be.  

My friend's experience at Next indicates that multi-channel is a very meaningful reality in the present for the big budget players. 

In an article for Property Week published last month, Graham Ruddick, retail correspondent at the Daily Telegraph, commented on the £4bn merger of Dixons and Carphone Warehouse. The combined new retail giant occupies over 1,200 shops across the UK. On the face of it, such a network of physical stores might appear a liability in a commercial property market where excess retail capacity is an issue and online purchasing behaviour is perceived as the biggest threat to the high street.

In fact, Carphone Dixons plc is reinventing itself to focus precisely on consumers who will act at the intersection of online and offline, foreseeing a future where the borders between the two become increasingly blurred.

In Ruddick's words, "Retailers will be blessed with reams of data about how customers behave, allowing businesses to target specific shoppers at the key moment." Whether that be when they're at home or walking past a Dixons store.

He quotes Carphone Dixons' CEO Sebastian James: "Customers continue to want contact and advice and demonstration, but the dividing line between online and offline will become ever more fluid. [ ] Because of this, new niche ways to anticipate, excite and entice customers will evolve, breathing new life into our high street."

If James is right - and we wouldn't bet against him - it makes total sense for retailers to be trying to push new customers through their online channels.

Don't be surprised if you find yourself being encouraged by a big retail brand to make an online purchase. Doesn't mean they don't want you in their store... just that they want to know more about you first!