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Insights / Blog / Business

After-sales & customer loyalty: This is how retailers can profit from evaluating customer data

February 23, 2023
Steven BaileySteven BaileyChief Strategy Officer

Channels and customer behavior are changing – for retailers, this results in a loss in many areas of their role as intermediary between manufacturers and end customers. Increasingly, brands are now establishing direct customer relationships themselves. At first glance, this situation may seem to pose a threat to retail, but examined more closely, it offers enormous potential for addressing customers in the future with appropriate services and products via after-sales. However, retailers should take action now and lay the foundation required for this.

The development – an overview

Let’s take a look at the big picture using the example of a household appliance retailer: Once upon a time, the roles were clear. The retailer functioned as the touchpoint to the end customers; it was the point of contact and advisor, source of information, and intermediary – and of course the seller of household appliances from various manufacturers. The focus here was on service, in the brick-and-mortar store, and later also online. The retailer knew customers’ needs and desires and found appropriate solutions for their problems.

Meanwhile, and this is a development that was amplified with the acceleration of digitalization during the COVID19 pandemic, it is important to many customers to be able to solve their problems themselves, and make purchases directly and quickly online. Brands and manufacturers reacted to this and adapted: They expanded their business from B2B to B2C, they are no longer just in contact with retailers, but also directly with consumers, and they address consumers themselves with specific offers.

IoT (the Internet of Things) and the change to the smart home have also contributed to this. For various household appliances and product groups, end customers already use apps or brand systems via which they can order appropriate additional products or spare parts and make repair and maintenance appointments; for example, the Miele app, My AEG Care app, Bosch Smart Home, or Liebherr’s SmartDevice.

Stay on the ball as a retailer: Data as the key to after-sales

Retailers’ significance may change, but that doesn’t mean that they have to surrender completely. Critical now is to create a new USP as quickly as possible. The basis for this: Data. For there is a lot of potential in existing databases and the ones created – provided that these are evaluated and used right.

But what does data evaluation actually mean for after-sales – and what does a customer-centered approach to this look like?

Such a customer account that includes not just basic data such as name, address, and bank details, but also offers access to all necessary features, enables retailers to evaluate a wide variety of data and gain better insight into customer segments (for example, by region, product, behavior, query via time axis).

Our household appliance retailer, for example, may no longer automatically be the point of contact for spare parts or accessories after the purchase of a washing machine, because customers take care of such matters directly with the manufacturer via an app. However, if the retailer incorporates its services into the platform system to which the app is connected from the very start, it can get back into the game.

Data evaluation can provide retailers with information for after-sales campaigns, from which individual up- and cross-selling offers for individual products or entirely new ideas for products and services can be generated. Critical here is to think from the customer’s point of view, to predict customer problems, and have appropriate solutions on tap. The right analysis tools and methods help here.

Possible fields of application:

  • Offering appropriate accessories or expansions for products purchased
  • Timely, coordinated reminders about maintenance appointments or for the exchange of consumables and wearing parts such as filters, cartridges, seals, etc., including appropriate offerings
  • Provision of subscriptions for consumables/wearing parts
  • Analysis of most-purchased brands, appliances, or groups of appliances in order to derive conclusions for product range decisions

Of course such scenarios are already in use for the widest variety of conceivable areas and in different forms, for example in the form of supermarket apps for REWE and LIDL, drug store apps, or the Amazon Dash Button, which meanwhile is only available as a virtual button.

Think about the future: Create the technological bases now

Now development in all industries is not as advanced as in these examples, and the potential is not always the same. Nevertheless, it is worthwhile for retailers in all areas to examine the market precisely now and position themselves for possible innovations in order to be able to take quick advantage of opportunities.

The pandemic and energy crisis have precisely shown in recent years how important it is to be able to react quickly to changed market requirements. Of course retailers do not have a crystal ball in the closet; however, the structured evaluation of customer data allows them to derive foreseeable trends and gain information – and to generate services and offerings from this that provide true added value to customers.

What is essential for this is the right technological basis: A comprehensive platform solution with appropriate interfaces that integrates all relevant data sources, for example, CRM, ERP, WMS, and shop and product data, with a good cybersecurity and data protection concept – and of course an openness to new business models and cooperations.

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Original article (in German)