Personalized, seamless shopping experiences are imperative for retail success today. Fortunately, AI and automation powered by robust customer data platforms are making this achievable across channels.
This article will analyze key innovations transforming retail CRM capabilities. You‘ll discover real-world examples of these technologies in action and best practices for adoption.
We’ll examine five major trends:
- Predictive analytics with machine learning
- Omnichannel integration
- AI chatbots and virtual assistants
- In-store tech integration
- Mobile optimization
We’ll also explore considerations for evaluating retail CRM solutions to meet your business needs.
Let’s dive in to understand how next-gen customer experience management can future-proof your retail operation.
Why Retail CRM Matters More Than Ever
Today’s consumers have higher expectations than ever. 73% report ramping up their standards compared to just a year ago.
At the same time, data volumes are exploding thanks to rising digital engagement. U.S. retail ecommerce sales alone are predicted to grow from $869 billion in 2021 to $1.2 trillion by 2024.
However, a Salesforce survey found 63% of retailers struggle to connect data across channels to enable seamless customer experiences. Legacy CRM systems often can’t provide the analytical capabilities needed today.
That‘s why 30% of retailers are accelerating technology investments—with CRM a top priority. Next-gen platforms integrating AI and machine learning will separate the winners from the rest.
Surging Market Growth
Worldwide retail CRM software spend reached $8.3 billion in 2021. Driven by demand for customer-centric solutions, it‘s projected to surge 90% to $15.6 billion by 2026.
SaaS offerings are fueling rapid expansion. Their flexibility and scalability suit the needs of most retailers better than on-premise deployments.
North America leads retail CRM adoption today, representing 40% market share. However, Asia Pacific is forecast for fastest growth at 107% CAGR through 2028.
Consumer markets like India are leapfrogging traditional retail with mobile-first strategies. They’re early adopters of innovative platforms to manage new retail models.
The ROI of Customer Experience
Investing in next-generation retail CRM makes solid fiscal sense beyond supporting sales goals.
Research shows loyal customers generate 5x higher lifetime value compared to new shoppers. They also spend 67% more per purchase.
Top brands leverage CRM-driven personalization and loyalty initiatives to increase repeat purchase rates. Data shows consistent results:
- Starbucks mobile app personalization delivered 16% higher transaction frequency from members.
- Nike’s unified customer profiles inform personalized rewards fueling 30% member repeat rate and higher AOVs.
- Omnichannel jewelry brand AUrate increased order frequency by 150% with tailored customer communication powered by retail CRM.
The examples go on and on. When implemented strategically, retail CRM proves its worth via hard KPIs—not just better experiences.
5 Groundbreaking Innovations Reshaping Retail CRM
Let’s examine five trends at the bleeding edge of customer experience management today.
1. Predictive Analytics with AI and Machine Learning
Legacy reporting solutions simply presented historical performance data. Modern AI-enabled platforms unlock accurate forecasts to radically improve decision making.
Sophisticated machine learning algorithms rapidly analyze millions of customer attributes and interactions. You gain instant visibility into predicted behaviors and emerging trends on user-friendly dashboards.
This predictive intelligence helps retailers hyper-personalize engagement across channels in contextually relevant moments. You can also optimize operations by foreseeing inventory needs, staff requirements, and other resourcing.
Common use cases include:
Personalized Product Recommendations
Examine purchase history, browsing behavior, wish lists and more to serve up tailored suggestions everywhere—emails, social ads, onsite search, and beyond.
Rue La La increased email revenue 11% with predictive programmatic product recommendations.
Customer Churn Reduction
Identify customers likely to decrease spend or stop buying altogether based on predictive scoring models. Retain them proactively with incentives and special offers before it‘s too late.
Predictive churn alerts have saved Stitch Fix millions in revenue from at-risk members.
Cross-Sell and Upsell Optimization
Determine next-best offers for each customer based on purchase predictors. Serve these seamlessly post-purchase or when onsite to increase order values.
A leading furniture retailer analyzed predictive insights to tailor added offerings during checkout. They lifted profit-per-order by 25%.
Inventory and Supply Chain Forecasting
AI-enabled demand sensing comb through historically correlated supply and sales data to project future inventory needs. This allows smart just-in-time replenishment to avoid stockouts.
2. Omnichannel Data Consolidation
Historically retailers managed data from brick-and-mortar stores, ecommerce, mobile apps, call centers, and so on across fragmented systems. This prevented a complete view of customers and their omnichannel footprint.
Next generation retail CRM consolidates all these inputs into unified profiles. Staff gain access to online/offline purchase history, browsing behavior, communication records and more regardless of channel.
Armed with holistic data, retailers can deliver consistent hyper personalized messaging and product recommendations across touchpoints. This is what 79% of today‘s consumers expect for a seamless experience.
For example, athletic brand On Running has full visibility into how individual customers engage across its own retail stores, website, mobile app, and third-party outlets. Their CRM strategy is focused on crafting consistent experiences across environments by unifying data and processes between them.
Localization and Microsegments
Omnichannel data also enables executing hyper-targeted campaigns adapting to local customer preferences for retailers with multiple locations. You can adjust recommendations and offers city by city or store by store rather than taking a one-size-fits-all approach.
Uniqlo analyzes omnichannel data capturing regional variation in best-selling items and categories. This fuels accurate automated replenishment by location to align supply and demand.
You can further microsegment audiences into more specific clusters based on attributes and behaviors using interaction data across channels. Campaign performance improves dramatically when tailored to “segments of one.”
3. AI Chatbots and Virtual Assistants
Intelligent chatbots are taking over basic retail customer service queries thanks to natural language processing (NLP) capabilities. Unlike rigid menu-based bots of the past, AI models handle nuanced conversations and questions to resolve most common issues instantly 24/7.
They also enhance experiences by making relevant product suggestions based on purchase history and website behavior data. Chatbots route truly complex issues to human agents efficiently.
Key advantages compared to traditional self-service FAQ resources include:
24/7 availability – No hold times and always-on assistance. 60% of shoppers prefer chatbots over humans for quick inquiries.
Instant resolution – Chatbots resolve ~80% of routine questions within conversation using contextually relevant data. This reduces call volumes so support staff focus on high-level service.
Personalized recommendations – Leverage each user‘s traits and past interactions to recommend products. The 1-800-Flowers birthday chatbot drove 15% higher conversions this way.
Intelligent Virtual Assistants
IVAs take capabilities up a notch using speech recognition and synthesis for conversational interactions. Retailers are exploring incarnations like virtual stylists and in-store assistants running on smart displays.
For example, Diligent Robotics created a retail robot named Mia who answers shopper questions, makes product recommendations, guides them to items, and even makes small talk to elevate the experience.
4. Integration of In-Store Technology
Innovation in brick-and-mortar retail leverages smart mobile devices and sensors across the physical premises to blend digital convenience with tactile shopping appeal.
CRM plays a central role – unifying data across channels to equip staff with holistic customer intelligence anywhere onsite. This empowers associates to provide bespoke assistance and inspiration at the point of experience.
Examples include:
Mobile POS – Associates roam untethered armed with clienteling apps on phones/tablets syncing centralized records – from lifetime value to purchase history and product preferences. Staff assistance stays personalized, anticipating needs.
Clienteling apps – Store personnel access tablet-based CRM guides on VIPs with details like preferred brands, wishlist items, and past purchases as well as real-time visibility into inventory across the network. This context positions them to provide white-glove advisory.
Smart dressing rooms – RFID sensors enable mapping items brought in to try on automatically to shopper profiles within the retail CRM system. Staff get updates to make recommendations proactively and close more sales.
Ralph Lauren is currently piloting an AI-powered voice-activated mirror called the Virtual Stylist. It offers clothing recommendations based on items brought into dressing rooms, previous purchases, and stated style preferences.
Early testing increased keep rate for items suggested by the smart mirror. This seamless fusion of CRM data and emerging tech showcases innovation potential to enrich tactile retail journeys.
5. Optimized Mobile Experiences
Mobile optimized retail CRM strategies are mandatory, with smartphones driving 73% of shopping traffic today. Plus an estimated 50% of in-store shoppers are using internet-connected phones to assist buying.
However, just 30% of retailers have deployed fully responsive mobile sites and apps leveraging device capabilities. This represents a huge missed opportunity.
Next generation platforms enable powerful mobile apps synchronizing real-time data feeds for both customers and store associates.
Customer apps drive engagement by allowing shoppers access accounts, personalized promotions, digital maps, self-checkout and more.
Furnishing retailer Living Spaces attributes their 29% sales lift in part to equipping all floor staff with customer-facing mobile CRM apps. Associates access purchase history, inventory and promotions to answer questions, upsell proactively and complete transactions from anywhere without ever leaving shoppers.
Essential Capabilities to Evaluate
With so many features and options, selecting a future-proof retail CRM platform can feel daunting. Keep these essential capabilities top of mind while assessing solutions:
Unified Profiles – Consolidate data across sales channels, web, mobile, stores, service records and more for complete customer views that enable consistent experiences anywhere.
AI and Machine Learning – Seek retail CRM solutions leveraging predictive analytics, personalized recommendations and automation driven by built-in smarts. Prioritize platforms where data science is simplified for business users.
Omnichannel Orchestration – Ensure your solution won‘t just track but also help orchestrate seamless experiences across channels through workflow automation and intelligent journey mapping.
Flexible Deployment – Solutions accommodating hybrid models blending on-premise and cloud elements provide the control and customization benefits of the former with the flexibility and cost structure of the latter.
Agile Delivery – Continuous release cycles essential for retail allow regular enhancement. Ensure your vendor keeps pace with provisioning new features and innovation in step with market demands.
Open Integrations – The best platforms provide APIs and connectors so that essential retail operations systems like POS, inventory and supply chain feed data insights back into your CRM to further enrich holistic profiles.
Security – With escalating cyber threats and shifting data regulations, ensure rigorous enterprise-grade security protocols shielding customer information. Prioritize encrypted data both at rest and in transit.
By focusing on the capabilities delivering maximum value for your customers, channels and operational maturity, retailers of all sizes can find solutions fitting their reality now and as needs evolve.
The Future of Retail CRM Has Arrived
Groundbreaking capabilities powered by artificial intelligence and robust data platforms are no longer nice-to-haves, but competitive necessities across retail verticals.
Predictive analytics and automation allow hyper-targeting customers with relevant offers while location-based tools help staff provide bespoke assistance.
Progressive retailers blending physical appeal with digital convenience will pull away from the pack. Customers flock to frictionless phygital experiences feeling personalized, magical and delightfully unexpected.
For forward-thinking brands, next-generation customer relationship management paves the path to unprecedented sales growth through orchestrated customer journeys – online and off. Buckle up for the ride.
