Mike McGee considers how tailored content and personalised data will drive customer loyalty
How it started: the account number
A fundamental of grocery wholesale is that it is trade-only – in principle, at least. Part of being trade-only means that traders must sign up and they are then given account numbers that stay with them for as long as they shop at that outlet.
In cash & carry, the customer gives this number at reception, at the checkout and at the payment desk. Historically, that was the extent and depth of the relationship, unless the trader was a ‘bit of a character’ or a very significant purchaser.
I distinctly remember, many years ago, discussing customers with a depot manager. He could reel off his five highest-spending customers and their main product purchases in great detail.
I casually asked who his most profitable customer was. Once we got past the shock of why anybody would want to know that, I managed to persuade him to look at a report. As far as I could see (from over his shoulder), it had previously been run three years before.
Rather predictably, he did not know the most profitable customer personally but sort of thought that he recognised the number. We then had the comic situation of the manager going round the depot asking if anyone knew ‘Mr A’. We had descriptions ranging from “The short chap with the funny hat” through to “The bloke with earrings who used to be a steelworker”. None of them was right.
And this is how things were for quite a long time, particularly when times were good, checkout queues long and independent retail was enjoying its time in the sun.
How it progressed: the sales development person
As times got harder and it was no longer a question of buying an old engineering works, racking it and watching the customers flood in, we saw the introduction of the sales development role. This was actually pretty transformational once the depot manager stopped relying on the section of the job description called ‘any other duties as required’ that meant that as soon as the checkout supervisor or anyone else phoned in sick, the sales development person provided cover.
What is undoubtedly true is that there were – and still are – comparatively few big customers to spread around the wholesale market and the large volume urban depots in particular are usually chasing the same customers.
By talking to the bigger customers more and getting beyond just the price of goods (where possible), it was realised that a more all-encompassing package was needed to at least try and get a bigger part of their spend or even loyalty – although, in wholesale, the phrase ‘if you want loyalty, buy a dog’ is pretty apposite).
So, at this point in the evolutionary process, we had more contact with customers and a much wider support offering that included fascias, core ranges, and retail clubs to try to meet customer needs and stabilise or increase the depot’s business.
By its very nature, contact with customers is sporadic and if it is agenda-led, it is normally to the customer’s agenda. This is not to decry what has happened to date; it is just that the tools are now becoming available to move onto the next transformational stage.
How it will change: completely tailored interactions
Forming a true, in-depth relationship with a customer is all about understanding their business/purchases and what these could or should be as opposed to what they are. To do this, you have to be able to manipulate a lot of transactional data quickly and then output it in a way that is useful. This latter element is of course the trick.
Many will say that e-commerce allows you to get closest to customers, as it is available to them all the time – day or night. I am not so sure at the moment. It is true that a couple of wholesalers have built substantial online businesses, which is impressive, but enabling customers to place orders is very different from providing a range of enhanced online services such as advice, feedback, suggestions and totally appropriate promotions.
Whatever our views of Tesco and Amazon and the email bombardment we get from them, you can see where e‑commerce is heading and that is to a very interesting place: totally personalised content and offers that are relevant to me as an individual is what they are striving to achieve, meaning that we, in a way, determine our own site from these vendors.
Wholesale is nowhere near this at present and would find it difficult to achieve. Wholesale has a trade base that is working long hours, has a 101 things to do in the evening and sometimes is not the most IT‑savvy.
But there are other ways to make this happen, by intelligent use of data alongside a variety of communication methods. Personalisation is the next frontier in customer relationships – it might not be possible to do this for every single customer at this stage but it is certainly feasible to do it for those over a certain threshold.
Everybody, without exception, responds better to a person or organisation that demonstrates understanding of him or her as an individual and then follows through by putting it into action. The tools are now there to achieve it and wholesaler first-adopters could be in for significant wins.