What exactly is Customer Centric Commerce?

Over the past several months I have had many conversations about customer centricity and there appears to be a lot of confusion about exactly what we mean by “customer centric commerce” and why it’s important. So this month, I wanted to clarify my position. Customer centricity is about placing the customer and their needs at the center of the experience. In retailing and commerce terms, this means architecting the entire experience from the customer’s perspective in, and being able to adapt each interaction to the specific shopping occasion.

Customer Centric Commerce translates into different strategies and capabilities depending on the retail segment. At Staples, customer centricity is about being easy to do business with, while at Bass Pro Shops it's about becoming a rich destination featuring an active community.

Creating a customer centric experience begins by understanding and capturing the customers’ needs and preferences. To make this actionable, many retailers translate these needs into personas. This is often more effective than simple segmentation since it enables retailers to tailor the experience to the specific shopping occasion. For example, when buying a printer, the consumer might fit into the “Randy Researcher” persona where the primary need is access to comprehensive product information and high value solutions. But when he returns to buy ink he falls into the “Bill the bargain-hunter” persona who’s priority is to find the best deal quickly.

Customer centric commerce strategies provide powerful foundations for cross-channel retailing. Simple integration is no longer adequate. As customers seamlessly traverse channels, the experience must be optimized for the specific touchpoint and where they are on their path to purchase. As the customer progresses through the interaction, retailers are able to use cross-channel marketing techniques to “listen and respond” to the customer’s needs at each touchpoint and progressive phase of the interaction. Marketing flows and processes must be orchestrated across channels taking customer preferences into account. For example, if a customer has chosen to buy online pick up in store, it is important to pick cross-sells that are personalized for that specific shopper and buying occasion.

Studies have shown that Customer Centric Commerce strategies create advocates. Advocates spend 30% more annually (average basket size) and spend 25% more with their preferred retailer. (Source: IBV Study) Another important benefit is that by understanding the full context of the interaction, retailers are able to deliver a complete solution frequently selling additional high margin offerings such as services or warrantees. Customer centric strategies must be embraced and understood at all levels of the enterprise; they impact organizational structure, solution strategies, and all levels of execution. Over the next few weeks we’ll take a much closer look at how leading retailers are deploying customer centric strategies and what you can do to become more customer centric.