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A FASHION BRAND’S GUIDE TOBUILDING CONSUMER INTIMACYIN THE DIGITAL AGE

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Introduction

Given !e context of today’s retail industry, it is clear !at a customer-obsessed business model has become !e new frontier.

But achieving !is objective is not so simple. Why? Because consumer intimacy is not merely a one-dimensional approach of monitoring !e customer across channels, or about communicating !rough new platforms. It is about managing !e entire customer relationship across all channels in real-time to achieve a true connection - one !at fosters loyalty, advocacy and continuous engagement.

This guide shows fashion businesses how to meet !ese objectives by leveraging complete visibility of customer interactions across all touchpoints to get closer to !e consumer and achieve a competitive edge in today’s ever-complex omni-channel landscape.

You have to be totally connected wi! everyone !at touches your brand. If you don’t do !at, I don’t know what your business model is in five years.” - Angela Ahrendts, Former CEO of Burberry & Current SVP, Retail and Online Stores at Apple

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The New Retail Battle!round

Unfortunately, most retail organizations lack !e holistic view of !eir customers to fully understand and react to customers’ needs - resulting in missed opportunities to forge better relationships wi! !em.

Decision-makers are impeded by barriers such as customer data silos, poor data quality and misaligned business strategies -preventing !em from developing a comprehensive view of each customer. This !warts any e"ort to deliver !e right experience to !e right person at !e right time. The outcome – a disjointed customer experience.

Executives seeking to build highly unified and unique customer experiences are le# immobilized as a result, requiring a fast and

innovative platform !at can engineer exceptional consumer intimacy moments in real time - not only on !e pa! to purchase but also !roughout !e longer arc of a customer/brand relationship. When carefully coordinated and synchronized, !ese moments help drive brand preference and cultivate brand advocates in a time of o!erwise diminishing customer loyalty.

To better meet !e demands of increasingly discriminating consumers and develop more e"ective strategies, we’ve outlined 5 factors !at fashion retailers should consider when evaluating !eir consumer intimacy strategy in !e digital era.

• Understand !eir preferences• Provide mobile deals• Give !em a reason to shop in-store• Let !em shop !e way !ey want• Make a personal connection

Today’s consumer wants brands to:

Today’s hyper-connected, empowered consumer continues to take !e lead in defining !e retail experience. Wi! rapid access to pricing and product information, !ey switch between retailers at will – rewarding only !ose who are able to deliver personalized, immersive shopping experiences.

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What !e C-Suite Should Expect

ConsumerIntimacy

BuildsLoyalty

Improves CustomerRetention

DrivesAdvocacy

Chief Executive O!cerEnhances better decision-making by leveraging accurate data to analyse business performance and help set an e!ective business agenda

Chief Product DesignerEmpowers ability to predict demand and new trends when designing and pricing new product o!erings

Chief Marketing O!cerHeightens ability to predict "e right o!er for "e right customer at "e right time, while simultaneously preventing churn

Chief Information O!cerBoosts capabilities in providing a better customer experience by leveraging actionable intelligence to shape business strategies, improve product planning and optimize customer-facing processes

Chief Supply Chain O!cerImproves alignment of resources and global supply chain partners by predicting and dynamically responding to changes in consumer demand and significantly reducing out-of-stocks and markdowns.

Consumer Intimacy Improves Strategic Planning Across "e C-Suite

“A customer who is fully engaged represents an average 23% premium in terms of share of wallet, profitability, revenue, and relationship grow!

compared wi! !e average customer.”- Gallup Research

Consumer Intimacy Improves Strategic Planning Across !e C-Suite

Chief Executive O!cerEnhances better decision-making by leveraging accurate data to analyze business performance and help set an e"ective business agenda

Chief Product DesignerEmpowers ability to predict demand and new trends when designing and pricing new product o"erings

Chief Marketing O!cerHeightens ability to predict !e right o"er for !e right customer at !e right time, while simultaneously preventing churn

Chief Information O!cerBoosts capabilities in providing a better customer experience by leveraging actionable intelligence to shape business strategies, improve product planning and optimize customer-facing processes

Chief Supply Chain O!cerImproves alignment of resources and global supply chain partners by predicting and dynamically responding to changes in consumer demand and significantly reducing out-of-stocks and markdowns.

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Five Essential Steps for a Successful Consumer Intimacy Strate!y

In an increasingly competitive market, retailers need to di"erentiate #emselves #rough #e quality of #e customer experience #ey deliver. However, #is means knowing #eir customers better and having #e right information at #eir fingertips.

1. A Single view of !e Customer

A single view of !e customer represents an evolution in !e way businesses approach customer engagement. In today’s competitive retail environment, !is consolidation of critical data about customers becomes a competitive di"erentiator as incomplete and inaccurate customer information costs retailers in lost opportunities.

Most large organizations spend significant time building CRM systems, but only a few achieve !e elusive “single customer view”. Attaining it, however, helps retailers analyze and monitor individual customers at a granular level, ra!er !an in discrete channel views. When !is information is held in a cross-channel CRM or data hub, !is singleview can be utilized to develop powerful

one-to-one programs and highly personalized one-to-one interactions !at provides individual value to your customers. This results in increased customer lifecycle value, satisfaction and loyalty.

In our work wi! fashion brands, we’ve identified !at aggregating customer data into a single repository helps brands understand !e entire customer story; since data captured in silos paints an incomplete picture and becomes potentially misleading. Insights derived from such a repository greatly enhances a retailer’s ability to make better decisions across di"erent areas of !ebusiness including marketing, merchandising, store operations and customer service.

Rachel

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The new consumer expects interactions to be real-time, highly personalized, and tailored to buying preferences, transaction history, and user behaviors. Given #e current state of retail, data-driven insights must be operationalized and embedded in applications for an enterprise to achieve a winning strategy.

2. Personalization

Through !e consolidation of customer interactions across a brand’s multiple channels, fashion companies have a tremendous opportunity to convert data into valuable insights - and ultimately drive exceptional personalization strategies. For all !e challenges it presents in execution, deciphering !is information holds great impact to a retailer’s bottom line – arming executives wi! insights crucial to making better decisions regarding how best to position or market !eir products to meet individual customer needs.

Personalized Interactions =Engaged, Active and Loyal Customers

Consumers are by nature curious, fickle and transient in !eir interests and motivations, which makes it di$cult to create a one-size-fits-all strategy. Personalization helpsretailers avoid !e perils of broad assumptions

to tailor shopping experiences to individual likes and current interests - allowing consumers to shop more e$ciently and even learn about o"ers !ey might o!erwise miss. This helps retailers optimize and build a more informative and productive shopping experience in a way !at attracts more tra$c to stores and websites.

Recentering !e organization to create consistently engaging experiences !at go well beyond a single campaign, channel or experience snowballs into a positive customer experience, which ultimately creates an engaged consumer.

Over time, as consumers accumulate more and more positive experiences wi! bo! !e product and !e brand, !e relationship deepens – resulting in loyal customers and advocates of !e brand.

The higher #e quality of a company’s customer experience, #e more

customers who purchase again, don’t switch to competitors,

and recommend #e company.- Forrester Research

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Activating !e Consumer’s Journey to Steer Grow!

Rachel’s Story28, Lives in California, Single, High Income, Fashion Focused, Tech Savvy, Heavy Online Shopper

Rachel’s Social Media Profile

Frequency of in-store visits in the past month

Wish List Past PurchaseHistory

Identified as an ‘Elite Member’

Email sent out:Free shipping on all online-purchases

Personalized offer based on information from customer intelligence engine

40% discount on all items on wishlist within the next month

Rachel is happy, and becomes a repeat customer!

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Most customers today deviate from a linear buying pa#, starting #eir shopping experience in one channel (e.g., social or ecommerce site), researching products using mobile devices, #en visiting a store. But ra#er #an a seamless experience #at reflects #e shopper’s history wi# #e retailer, customers o$en encounter an irritating loss of context and friction as #ey move from one channel to ano#er.

3. Real-time Contextual Insights

Personalization — recognition of !e customer individually, making suggestions about what he or she might like — is a big factor in deepening engagements.

However, it is !e context and relevance !at creates !e distinction in memorable customer experiences. A real-time personalized message, for example, might address a shopper by name or suggest some new assortments related to !e user’s buying patterns. Yet none of !at is relevant if !e shopper is actively looking for summer clo!ing at !e time.

Context - !e cumulative story !at is derived from data observations about customers – gives meaning to data. There is a dramatic and corresponding change in !e use of

context as deep situational understanding can help drive well-informed decisions.

Organizations can derive trends, patterns, and relationships from unstructured and related structured data to discover new opportunities.

Taking such an approach will allow retailers to focus !eir resources on data collection and analysis and concentrate e"orts on engaging consumers wi! !e right messages at !e right times.

In today’s retail environment, such situational awareness is essential in creating a better customer experience as retailers are able to increase !e value to !e consumer !roughout !e shopping journey.

• Real-time listening across multichannel touch points

• Flexible data collection !at accommodates new information gleaned from constantly changing customer behavior

• Intuitive, visual representation of data for easy analysis

• Dynamic modification to campaigns based on !e flow of consumer activity !roughout customers’ unique buying journeys

Contextual engagement requires:

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Contextual Engagement in Action

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A customer browses a retailer’s site and adds items to her wishlist.

COUPONNew Arrival

Two days later, she walks into the retailer’s store.

The associate identifies the customer and pulls up her profile on a clienteling app.

The associate sees that the customer recently added a pair of shoes to her wishlist. The same pair of shoes is currently in stock and is available in her size.

A personalized offer is generated - offering 25% off on the pair of shoes.

Wish List

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Today’s tech-savvy customers are actively comparing prices in-store, online and on #e go. Armed wi# multiple devices and constantly on #e lookout for #e best deal, #ey are increasingly price aware, price sensitive and even price influencers. To compete, retailers must o"er #e right price at #e right time - which requires unlocking customer data o$en trapped in siloed enterprise systems.

4. Customer-centric Pricing

A personalized pricing strategy uses automation to help retailers increase !eir price responsiveness to react more swi#ly to supply and demand, consumer behaviors and o!er market shi#s in near real time.

This approach can take into account complex variables such time of day, demand, price elasticity, competitor prices and more. Coupling all !is information wi! !e data trails generated by online consumers helps retailers ‘size up’ each customer to set di"erent prices for di"erent customers. Based on such data, it’s possible for retailers to predict what products a consumer is interested in buying, when !ey are likely to buy !em and, critically, !e price !ey would be willing to pay.

Take Rachel for example. She is a regular shopper - having made over 6 visits to !e

store over !e past 3 mon!s and purchased more !an15 items. By extracting data from purchases she’s made in-store and on-line, and identifying !e frequency of trips she’s made to !e store on a mon!ly basis, !e retailer categorizes her as an elite member. The next time she shops, !e retailer employs a pull based strategy to generate a personalized price. Since Rachel is identified as a loyal customer, !e probability of her receiving a better price in comparison to ano!er customer is higher.

But !at’s just a small sample of !e many variables retailers use to set prices. The words entered into a search engine in particular has a huge influence. For e.g., if a retailer knows a consumer searched for “size 6 women’s shoes,” !e retailer can target !at consumer wi! a $10 discount or go upto 20% if !e consumer registers as a member.

Using a behavioral-based platform !at takes into consideration !e Customer Journey, Social Data, Past Purchase History and Inventory Availability, fashion brands are able to adapt to market dynamics and develop more compelling o"ers and pricing to increase sales. This leads to an increase in customer lifetime value, boost in customer conversion & retention rates, which in turn increases revenue.

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As consumers continuously generate real-time data #rough social channels, #e instantaneous and public nature of social data gives businesses an opportunity to create equally fast-moving strategies to exceed customer expectations.

5. Sentiment Analysis

The digital universe will grow, as will !e ability to interpret what is today seemingly uninterpretable. In doing so, Social Analytics - monitoring and interpreting customer sentiment and activity - has become a powerful tool; not just for building stronger relationships wi! customers, but also as a compelling way of deciphering data to predict future trends. As consumers increasingly rely on social media, data collected will feed into powerful algori!mic tools !at, over time, will monitor and learn consumers’ response to defined situations and o"ers.

These insights enable retailers to develop a more comprehensive view of a customer and meet perpetually shi#ing consumerdemands more e"ectively. Preferencesaround a particular product can be easily matched to social data to answer questionslike “What do females in !e 20-30 age

group !ink of product x?” and “How did !e response change a#er !e launch of our new video campaign?”

Given !at !is data is public, fashion retailers are now in a better position to segment consumer types, which in turn can be leveraged to customize store layouts and assortments for specific regions. Similarly, manufacturers can harness open data in !e form of social media chatter or “likes” to improve a#er-sale interactions wi! consumers and make informed product design and development decisions.

Value of Sentiment Analysis

Heightened knowledge: Fast and accurateinsight to optimize marketing campaigns, enhance customer relationships, build brand advocacy and amplify loyalty.

Anticipate and influence behavior: Pinpoint trends in !e collective behavior of consumers in a particular region

Predict business outcomes: Reduce !e guesswork and make informed decisions based on tangible data to evaluate !e best return across customer service, and sales and marketing.

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The Business Impact of Consumer Intimacy

1 Parature - INFORGRAPHIC: The Financial Impact of Customer Service2 Rosetta - Customer Engagement from !e Consumers Perspective3 Walker - Customers 2020: The Future of B2B Customer Experience4 McKinsey - The Moment of Tru! in Customer Service5 Forrester Research - Customer Experience Index

$83 estimated loss dueto poor customerservice in US1 Billion

Highly engaged consumers2:

buy 90% more frequentlyspend 60% more in each transaction5x more likely to choose brand for future purchase

improvement in a company's customer experience can translate into more !an $1 billion in increased revenue and o!er benefits.1

increase in total stock returns was enjoyed by Customer Experience Leaders over !e last 5 years vs. 34% loss for Customer Experience Laggards.5

of consumers are willing to spend an average of 13% more wi! companies !at provide excellent customer service.1

of U.S consumers would try a new brand for a better service experience.1

10%

43%

70%

59%

By 2020, customer experience will overtake price and product as the key brand di!erentiator3

of buying experiences are based on how !e customer feels !ey are being treated470%

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At attune, we work exclusively wi! Fashion & Lifestyle companies; helping brands deliver superior customer experiences in !e digital age.

Real-time Consumer and Retail AnalyticsUtilizing technologies such as SAP Customer Activity Repository (powered by SAP HANA®), we help fashion brands gain a 360O view of !eir customers and a real-time view of inventory across all channels. Consumer EngagementLeveraging predictive, contextual insights, we help fashion retail companies deliver a personalized shopping experience to its customers !rough a suite of clienteling solutions. Omni-channel FashionThrough a vertically integrated operational platform such as SAP Fashion Management, we help fashion companies deliver a superior, consistent customer experience across multiple channels.

How attune Can Help Fashion Brands Drive Consumer Intimacy

Schedule an Assessment

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Conclusion

The rise of omni-channel has permanently altered !e course of customer relationships and placed a renewed focus on !e customer experience. This emphasis has grown to !e point where it practically overshadows !e products !emselves.

Amidst !is painful reality of highly disruptive trends, competition from online pure plays, pressure from shrinking margins, and eroding customer loyalty severely underscores a retailer’s ability to compete - leaving traditional approaches obsolete.

Fortunately, today’s technologies, processes and customer engagement tools have all advanced, contributing to !e evolution of customer-intimate business strategies.

Brands !at set !emselves apart wi! !e aim of building real relationships by committing to customer-centric principles will

be better equipped to expand !eir market share and see !eir bottom line soar.

In our experience wi! global fashion brands, we believe retailers need to look at !e customer more holistically — across all interactions and across !e purchase cycle — to better shape !e customer journey and drive brand loyalty.

It all lies in retailers getting past !e idea of simply servicing customers and instead, start focussing !eir e"orts on getting closer to customers by creating !e experiences !at !ey want.

1. Drive improvements along !e entire value chain by acting on customer insight

2. Acquire and nurture new customers by uncovering customer attitudes and behaviors

3. Deepen customer relationships based on a better understanding of interests

4. Improve customer lifecycle wi! an accurate retention strategy

5. Improve decision making across merchandising and product placement, by delivering products customers want

Consumer Intimacy Helps:

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