Member Article

Collecting Customer Data in an Omni-channel World

It’s that time of year again. With high streets basking in the last throes of the summer sun, retailers are beginning to deck the halls with boughs of holly as they prepare for Christmas 2015, with Selfridge’s in London already launching its Christmas shop. As retailers gear up, and plan their strategies for the holiday season, the main topic for discussion will be who will get it right (John Lewis and Next scored high marks for their click and collect services last Christmas) and who will fall at the first hurdle? The stakes are high as results last year showed that retailers that mapped their omni-channel ambitions to the shopping preferences of the modern consumer were rewarded with ever higher sales and even more loyal customers.

The concept of omni-channel shopping has been gaining traction in the industry for some time, and here at The Logic Group, we feel that 2015 is proving an important milestone for this strategy. We’ve seen it move from an interesting new development that could potentially increase the convenience of shopping, to becoming a customer expectation and demand. Last year, in our annual survey of consumer behaviour, we asked shoppers which channels they were using to buy their Christmas presents and from the results we could estimate that almost 43 million Britons were using a combination of in-store, online and ‘Click-and-Collect’ to purchase products. This figure can only grow this year, as retailers strive to create the best possible customer experience that meets consumers’ demand for quick, simple and convenient fulfilment of their shopping desires.

Despite its popularity, however, some retailers are struggling with the challenges of an omni-channel world, especially when it comes to creating a consistent and seamless customer payment experience across offline and online channels. The need to ensure consumer data and payment infrastructure is kept secure as new innovation is introduced and being able to monitor an increasing number of the customer interaction points has increased in complexity. Complying with Payment Card Industry (PCI) rules around customer payment data can make it very difficult for brands to get a full and multi—channel view of customer spending.

One new technology, tokenisation, is helping to overcome some of these obstacles, by encrypting consumer data at the point of sale while still enabling merchants to track customer payments To mitigate risk, an alphanumeric code, or ‘token’, is substituted in the place of payment data when a transaction is being processed. Information about a consumer’s card and personal details is reduced to a string of numbers and letters, indecipherable to any fraudsters who have gained the data via a data breach. While retailers cannot identify an individual token, if the token is the same whichever payment channel it is used in, then they can at least see consumer behaviour and spending patterns attached to it, gaining a view of how a customer is using each different channel for shopping, while keeping transactions safe.

As the concept of omni-channel prospers and becomes a norm, the next differentiator for retailers may prove to be the insight they can gain from their customer payment experience. As expectations grow on the consumer’s side for speedier deliveries, smarter location-based offers, and even anticipation of desires, retailers need to find ways of tracking these new omni-channel customer journeys, which will help them to and understand their customers better and be among the seasonal winners. Technologies such as tokenisation offer a unique opportunity to both safeguard customer data while providing a snapshot of behaviour, will providing the insight necessary to enable brands to engage proactively and efficiently with their customers.

This was posted in Bdaily's Members' News section by Marc Pettican .