Capturing the right data to fuel retail success

Whether you are a retail Volkswagen or a retail Ferrari, powering unique and meaningful customer experiences requires the right data to fuel the engine.

“A lot of time, I talk about the idea that creating better, personalized experiences … that’s really just the engine,” said Brendan Witcher, principal analyst at Forrester Research, at NRF 2024: Retail’s Big Show. “What goes into that engine? Fuel, right? And the quality of that fuel is going to determine how that engine runs.”

The best quality of fuel is data captured through apps and loyalty programs and across multiple channels, including mobile, social, in-store and on the web.

“I don’t care if it’s a Volkswagen (nothing against Volkswagens) or Ferrari,” Witcher said during the conversation with retail leaders from Abercrombie & Fitch, Sephora and The Vitamin Shoppe. “The gas that goes into it is the data you put into it, and if you put low quality data into in there, like age, gender and zip code, and call it a day … you’re going to get pretty mediocre results.”

Loyalty programs as data collection points

Data and technology are helping retailers connect and communicate with customers and employees, from back-end operational tasks to consumer-facing personalization. Sephora’s Beauty Insider loyalty program helps it capture data in a way that isn’t intrusive to the customer experience.

“We look at the opportunity to collect the data at every experience we unlock and tell the story of what we should do next,” said Sneha Narahalli, head of product and UX at Sephora. That includes the retailer’s 36 million-strong Beauty Insider program, but also customer reviews and other user-generated content.

The company gave loyalty program members the chance to earn more points through gamified experiences called Beauty Insider Challenges. Each of the four tasks, including signing up for text alerts and trying Sephora’s Color IQ complexion matching tool, is another opportunity for data collection without explicitly asking for more data.

Embedding data collection into the customer experience and employing a data strategy that is proactive instead of reactive gives Sephora the ability to personalize for the customer, no matter their buying intent.

“I don’t think the personalization journey is ever done,” Narahalli said. “It’s an ongoing thing that you’ve got to invest in.”

Similarly, The Vitamin Shoppe’s Healthy Awards program captures data with a focus of making it easier for customers to interact with the company and earn points. Chief Information Officer Scott Devlin called it creating a “data foundation” that allows for more precision marketing and personalization at scale.

For example, loyalty members and customers who use the retailer’s mobile app can input goals. That lets The Vitamin Shoppe capture important customer data that allows the brand to put the right offerings in front of the customer to help them reach their goals while gaining points and sharing their successes.

Resist ‘shiny, new’ technology’

Abercrombie & Fitch’s Samir Desai cautioned that a retailer’s existing technology stack has to already be robust before integrating “shiny, new” technologies like generative AI.

“At A&F, like many of you, we’ve been focused on modernizing our core platforms, moving to the cloud, unifying our data, moving away from project- to product-based operating models,” said Desai, A&F’s chief digital and technology officer. “All that digital transformation is still very relevant and, frankly, I’d say a prerequisite to unlock the value that generative AI allows us.”

Investing in those data systems and platforms, as well as looking at the tech stack through the customer journey and focusing on pain or friction points, has allowed Desai to leverage investments the company has made over the past two years as well as parlay some new technology.

“With gen AI, to me it feels like we’ve now got more tools in our toolbox through which we can solve those problems,” he said. But “don’t invent new problems just because the technology is there.”

A&F has been using gen AI to write product descriptions and power Ask A&F, which allows associates to easily access basic HR and benefit information. Last year, the brand launched an AI Stylist tool that lets customers navigate the product catalog differently and search for clothing by occasion.

But Abercrombie & Fitch is also investing in technology that allows the brand to tap into customer information gathered by store associates through customer research campaigns.

“The associates in our stores have all this information and intelligence that goes untapped,” Desai said. “Every interaction, every touchpoint, is another data point.”