Being empathetic while keeping business as usual. What is the right customer experience during these times? How does personalization and data play into this?
Jan-Pieter (JP) Lips, Head of Unified Commerce Enablement at Adyen shares his perspective on what we can learn from digital-native brands and what brick-n-mortar retailers are doing to keep up with customer demands. Plus, how card-linked loyalty and payment options have allowed retailers to conveniently offer a customized experience.
Welcome to another discussion of Annex Cloud Market Movers. Today with me, I'm very, very excited to have JP Lips. JP is from Adyen. He's the head of unified commerce at Adyen. JP, welcome to the discussion.
Thanks, Al. It's good to be here.
Wonderful. JP, you and I, we've been talking a little bit about a few topics that I thought it'd be great to share some of this with our audience. I guess the first one, and we've been discussing a little bit close, you've got a little bit of a background in loyalty. It's all start there. Retention and loyalty. It becomes and comes to the forefront during recessionary times, usually. Though we're not officially in one this way, it's a challenging environment, nonetheless. And so I wanted to get your ideas around what you feel around the importance of loyalty in the next few years broadly, and maybe retention programs and the tactics that people can do over the next few years to implement as a whole.
The advice I would always give is to start with a good understanding of the customer. There are a lot of data sources you can use to understand customers, but the most important one is transactional data. What did they buy? A lot of companies have big gaps in their transactional data and many companies can't attribute their store transactions to customer profiles, for example, or only a minority of store transactions. Some companies have trouble attributing guest checkouts to the customer profile. But of course, as we add more channels and with apps and kiosks, this whole environment becomes more complex. So the first thing I would always say is to make sure you have a really good understanding of the customer and then follow the data.
The data will tell you that you have a small percentage of customers that represent a disproportionate percentage of your sales and your profits. Your data will tell you that your best customers often still have a lot of headroom and not many companies realize that. Your data will tell you that your existing customers are much more likely to buy from you than your prospects and all those pointers really point towards embracing loyalty strategies.
And that's interesting. So, focus on the data, follow the data, try to understand from the customers from that data. Once we start understanding the data, I think the more important question is how do we, and what's the right experience for this economy? Because one of the things that we talk a little bit about is for the short term in 2020, you have to be a little empathetic. You can't be overly salesy. You understand a little bit from the data, but the data may not always completely, potentially at least in the short term give you the perfect truth.
Because you might see a blip, and for example, if you're a grocery store, you're seeing an amazing uptake in the short term, if you are a movie theater, you are challenged at this point in time. So, the data might, for the short term, might give you a slight blip up or down, depending on what it is. And at the same time, you also want to be able to apply the right personalized experience, the empathy for the customer, but at the same time, you have a business to run. So it's a challenging triangle of data versus customer versus empathy and business overall. That becomes a very challenging decision-making process for anyone.
Yeah, for sure. But what's important is to put the customer at the heart of your strategy. And that may sound like a very obvious thing to say, but quite often in a retail environment, there's still a lot to improve on that. And particularly, if you look at many retailers being traditionally bricks and mortar companies, and then adding e-commerce and therefore becoming omnichannel companies, that was a great development because it enables customers to choose how they want to buy from retailers. But very often, those were set up in silos. So different systems, different teams, different data as well, different inventory. And in order to create a customer experience, it really is based around the customer. It's important to move from an only channel set up to what we call unified commerce, which really is a connected way of doing omnichannel with systems that are connected with one single source of truth around customer behavior and around inventory.
Perfect. And I think, just in our experience, it was an interesting time because I think a lot of companies, I would say the early 2000s when they were pure-play, just brick and mortar build an e-commerce presence. Then I would say probably in 2012 to 15, there's a lot of digitally, 10 to 15, a lot of digitally native companies came out very much e-commerce focused and became fairly big. From 2015 to 2020, a lot of those digitally native companies started opening stores. An example of that was, for example, Casper Mattress, right? They were digitally native and then they opened stores and started growing their business. And so whether you came from a brick and mortar brand and built commerce, whether you came from a digitally native brand and build those stores, you're all becoming omnichannel. Nonetheless, if you're still a brand, you're still selling direct to consumers, or you should sell directly to consumers, t gave what happened.
So unified data presence is extremely important. Yeah. That's something that people have to really keep in mind. But, the risks that are associated with not making a change, because I think what we've seen over the last few months is customers freeze a little bit. Freeze in the sense of the uncertainty that's out there makes you pause and say, "What decisions should we make and how can it be applicable?" From what I've seen, and this is a famous quote by Salesforce, is "They should have doubled down during 2001, 2008 economies because when they came out of it, they were further ahead of the competition in general." And so from your perspective, how do you see it when people are risk-aware and trying to hold off on decision making? What is the risk if they don't do anything in 2020 for making these changes that you're talking about?
Yeah, there's definitely some risk of that. And what I think companies should do is really learn from this experience and from this crisis. And if you think about it, I think two things have proven to be really important in this crisis. One is the ability to connect with consumers. So if you look around you with companies who had communication, direct communication with their customers, they were able to grow their e-commerce much faster than the others. They were able to spin up new distribution channels. They were able to inform their customers when their stores closed when their stores opened. So just imagine not having that and flying completely blind in a crisis like this. So I think that really points towards a need to invest in those areas.
And the other is to really invest in a good technology platform. That's great flexibility. And we have merchants that we’re able to start taking payments through their call center reps that were sitting at home, working from home in a day through payment links. We have companies, food, and beverage companies, for example, because they had invested in preorder and pay, they were able to stay open. So again, even investments where you're not 100% sure how your payback will come, they will create flexibility in the future to be able to withstand the next crisis or the next disruption.
Yeah, no, that's great. I'm thinking digital transformation as a whole became to the forefront. We've been talking about digital transformation for the last 20 years. So, it's been an important topic at the C level, but just in the last three months, the improvement or the leap in digital transformation has been phenomenal. We talked about loyalty as a part of that digital transformation. You were talking about payments, people taking payments while CSR sitting at home. That's a big forefront or jump in digital transformation that's happening and doing so securely doing so in the right way to stay compliant. That's no small feat. So a lot of technology advantages are available to customers to use. One of the other ones I wanted a little bit to talk about is the advent of social. Back when Facebook started, I would say 2010 timeframe, it was a big thing.
And so commerce on Facebook was the term back in the day. And then they started saying commerce on the side, but bring social to your site or bring social to your channels. And then it went somewhere in between the two and then other channels came out and Instagram became big and so on and so forth. With this crisis, another thing that's changed is our way of going back to social, whether it's B to C social channels, the newest one being Tik Tok that's taking off, or whether it's B to B social channels, where a lot more people are now significantly more active on LinkedIn, for example, as a B to B social network. Social has got a new awakening. What is your take on the importance of social channels as part of digital transformation?
Yeah, that's a really interesting question. And one of the things that we've seen is really now finally many companies are starting to do commerce through social channels. And you mentioned it a little bit in the past. It's long been a promise. It's really starting to happen now. We have merchants that our customers can connect or interact with store staff through Zoom or FaceTime, and basically have a virtual shopping experience, still get the kind of support from someone in staff. They pay through payment link, products are sent to their home, or picked up at curbside pickup. So we see social almost like bridging between the traditional e-commerce environment, which doesn't really have a lot of personal interaction without a need of going to a store.
That's awesome. One of the examples of what you're talking about, I just thought that comes to mind, as you were speaking about is upscale brands. I think it was Gucci. And they were doing this personalized shopping experience through a personal shopper in-store. So you're not going to the store, but this person is picking up bags, trying them on, and showing to you as a personalized experience. And so a true way of doing contactless personalization, while applied to social shopping in this case. So that's a great example. Great. So JP, at some point or not, whether it takes us another three months or another six months, we are going to start recovering. We are going to come out of these times and we're going to start thinking about what to do for the future. As people are building their plans for the future, in addition to looking at data and unifying that data, in addition to thinking about technology, in addition, to think about digital transformation and social, what are some other ideas that you might think of that people can start thinking about implementing in the near future?
Oh, the one thing I'm really excited about is this thing called card-linked loyalty. If you think about loyalty programs, we are asking our customers to jump through quite a few hoops. And whenever you go to a store that has a loyalty program, you're asked to either carry a loyalty card, spell your email address, pick out your app, show a QR code every time, even the store you come to very regularly. At the same time, you always pay. You always, if you pay with a card, show your card. So you're asked to identify yourselves twice really for a visit. Card-linked loyalty means that we start recognizing people based upon their payment cards. Really quick, really hassle-free and of course, you've can't forget it. You always pay, and therefore you get much more data. So that's one trend to really look out for.
Wonderful. JP, this was a pleasure speaking with you. Thank you again for your time. For everyone else, please go to annexcloud.com/marketmovers to hear amazing experts like JP. JP, thank you for joining us today.
You're welcome. Thanks for having me.
Bye for now.
Co-Founder, Annex Cloud
Head of Unified Commerce Enablement, Adyen
For more than 10 years, Annex Cloud has been the worldwide leader in technology and service solutions that transform customer loyalty experiences for organizations, extending valued customer engagements, ultimately making beloved brands. Powered by the modular, comprehensive and scalable Loyalty Experience Platform™ solution suite, Annex Cloud customers capture and use zero- and first-party data to seamlessly deliver value-based individualized experiences across the entire customer journey—from awareness to purchase to retention, loyalty, and advocacy. This one-to-one engagement helps enterprises accelerate growth by increasing average order value, repeat purchase frequency, and customer lifetime value. Annex Cloud is recognized by respected industry analysts and integrates with more than 100 market-leading technologies to seamlessly integrate loyalty across the tech stack.
Adyen is the payments platform of choice for many of the world’s leading companies, providing a modern end-to-end infrastructure connecting directly to Visa, Mastercard, and consumers' globally preferred payment methods. Adyen delivers frictionless payments across online, mobile, and in-store channels. With offices across the world, Adyen serves customers including Facebook, Uber, Spotify, Casper, Bonobos and L'Oreal.
To learn more about Adyen, visit adyen.com