Have you ever logged into your email account, personal social media page, or checked your mail to find a myriad of advertisements that seem especially custom-made for you? It is no accident that an avid sports enthusiast may check his or her mail to receive a plethora of advertisements for discounted sports jerseys and other gear or conversely a makeup enthusiast who is immersed in the latest fashions to receive commercials for the latest makeup promotions and discounts from the same store. Yet, how does a company know exactly whom to target and with what to target him or her to get the most profit? The retail industry is one that is completely focused on the customer; the customer is always right and it is the retailer’s job to ensure that he or she (the consumer) is happy and taken care of. Nevertheless, it seems completely unfathomable that large corporations would have the time and energy to pay attention to minute details so scrupulously; how can they (the large corporations such as Macy’s JC Penny, Target, and Kohls-to name a few) keep track of each customer’s specific needs and cater to his or her buying tastes.
Technology plays an immense role in customer profiling; technology allows the retailer to keep track of which items the consumer purchased, the date of purchase, and the quantity purchased of said item and once he or she has signed up for an email newsletter or a membership a customer profile has been created and the consumer has been stored into that particular store’s database. For instance, a retail employee may encourage you to sign up for the email newsletter or a membership after he or she has scanned your items under the pretenses of saving you money but in reality to bait you into visiting the store again with tailored coupons and sales promotions. A profile is mainly generated in retail from spending, material, and demographic preference statistics and is especially useful in the retail industry because it gives the company inside information on each customer’s personal inclinations and allows the retailer to market thusly. Allowing the computer database to keep track of each consumer’s buying preferences through online memberships, rewards clubs, etc. allows the company to create a superficial bond with the customer and establishes a strong sense of unity and loyalty between the consumer and the retailer.
Along with added profits, customer profiling also allows the retailer and its employees to save valuable resources such as time and energy which can be devoted to accomplishing other tasks. A perfect example of this would be if two customers were querying about the same item; which customer should the retailer be allocating his or her time for? Although, in an ideal retail situation the retailer/employee would dedicate equal amounts of time to give both consumers the proper customer service; reality dictates that time is money and with every second wasted there is another dollar in profits which is lost. Therefore, it is imperative that the retail employee make the best of the situation and know exactly which customer to dedicate his or her time to to get the most profit. This is where technology partnered with customer profiling plays an essential role; seeing both consumers the retail employee can quickly go into his or her database and see which customer has created a profile with the store (thus creating that bond of unity and loyalty) and if both have that profile which one of the two has the most purchases and frequencies to that particular store. Having quickly seen that the retail employee knows which consumer is most serious about the purchase and is also the most dedicated to the store. Personally, I have had similar experiences at many retail stores in which I have been asked to join that store’s particular email listserv or membership club in order to receive the latest style tips, store promos, and gift coupons. Having joined these clubs not only do I receive the coupons catered to my own styles and preferences but I also receive the fastest and quickest service after they have seen that I am a frequent and loyal customer.
Overall, profiling creates not only a bond with the customer but it really taps into the hidden parts of the consumers psyche that the consumer may not know he or she themselves had; now this is an effective tool for marketing for not only gaining profits but a faithful and dependable foundation.
By: Anuja Gaikwad Team Groupsoft US