As digital technology becomes increasingly diffused into the operations of some of the world's most powerful brands, opportunities abound for consumers and businesses alike. From re-configured digital touch-points offering seamless and personalized customer experiences, to new revenue generating and cost-saving opportunities on this business side, brands are becoming increasingly sold on the idea of radically overhauling their marketing strategies in favor of more impactful omni-channel configurations, overlaid with tailored content and personalized offers.
I recently took a deep dive (alongside two of my esteemed colleagues at New York University) into the digital marketing strategy of major US retailer, Macy’s, in an effort to better understand how this five (5) billion dollar retail giant – with such a rich legacy – has been positioning itself for success amidst growing demands for seamless and personalized end-to-end shopping experiences. As one would expect, Macy’s has without question seized the moment.
In its quest to revive down-trending customers, better engage its loyalty program (Star Rewards) membership, and improve the overall customer journey (across both digital and physical touch-points), the company has embarked on an ambitious digital transformation unlike anything we have seen within the legacy retail space.
Enhancing Customer Experience through Digital Transformation
According to a recent Deloitte article highlighting Macy’s revamped customer journey, customer satisfaction is the company’s principal consideration when designing its shopping experiences.
With 78% of consumers citing their preference for personalized shopping experiences (based largely on past purchasing behavior), the company shifted its focus to creating more tailored content, complemented by a revamped omni-channel marketing strategy intended to deliver a seamless and comprehensive brand experience.
It was further revealed that brands that excel at personalization are 48% more likely to have exceeded revenue goals, and 71% more likely to report improved customer loyalty.
Understanding the customer’s impulses, triggers, needs and desires are essential to personalizing recommendations, content, and special offers. In this regard, Macy’s will be constrained to determine how best to engage new technology – such as neuromarketing tools – for better customer insights, enhanced product marketing, and ultimately greater conversion and retention.
Having invested in a robust solutions stack that has to date proven effective in personalizing the customer journey, Macy's may find it difficult to resist the allure of new solutions that could potentially provide even deeper insights into customer and consumer responses to marketing stimuli. In view of this, there is a strong utilitarian case for the integration of neuromarketing solutions into the company's marketing technology stack.
Prioritizing Responsible Data Management
Very few functions within large corporations demand greater care, scrutiny and safeguards, than data management. This increases exponentially when personal data is involved. Case in point, Macy’s customers, whose personal data profiles exist within a multi-layered virtual ecosystem – albeit, as safely as one would imagine.
However, should Macy's decide to integrate neuromarketing technology into their existing solutions stack, the company will likely implement measures to ensure that they remain above board on procedures for informed consent and data privacy.
The company will also need to maintain its usual due diligence on data management for sustained indemnity and to avoid negative publicity and/or irreparable reputational damage – which could potentially arise in the unlikely event of lapses on the supplier side, particularly in relation to unsubstantiated product claims and non-disclosures.
Going forward, the company’s legal team will also be constrained to closely monitor the evolution of State-level laws, particularly in relation to data privacy, informed consent, subliminal advertising, transparency, and disclosure.
Optimzing Customer Lifetime Value
Reconciling the cost of Macy's digital transformation with envisioned margins will require fresh insights into customer lifetime value (CLV). With this in mind, Macy's stands to benefit from any solution that accurately pin-points the best individual prospects for conversion – including their locations, both spatially and within the marketing ecosystem.
While the latter has been addressed largely through its enhanced solutions stack, the company should ideally consider the integration of dedicated spatial analysis tools for better visualizing how CLV varies across stores and other geographical locations – which can be achieved using geocoded data provided by loyalty cardholders and other consenting customers.
With this capability, Macy’s will be able to track changes/ trends in the spatial distribution of customers by CLV, preferred shopping modality (online versus in-store), and to aggregate geocoded customer and wider consumer data (in-keeping with relevant data privacy laws) for improved insights. These insights will help to further enhance and personalize Macy’s in-store and online shopping experiences.
As Macy's marches on into a new digital age, benefits abound for customers and business alike. From re-engineered touch-points and channels delivering a tailored and frictionless customer experience, to new revenue generating and cost-saving opportunities (due largely to improved conversion rates), history will no doubt tell the story of how this retail giant reimagined its customer journey and spared no expense to bring it to life.
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