Definition and emergence of Digital Technology
“Digital technology are electronic tools, systems, devices and resources that generate, store and process data. These include social media, online games and applications, multimedia, productivity applications, cloud computing, interoperable systems and mobile devices.” (wenso.co.uk)
The development and advancement of digital technology begun with the Internet. The revolution of digital technology begun in 1947-1979. In the 1980s, computers became more familiar. The first cell phone was also introduced in this decade. In 2000s, digital technology had begun to spread all over the world and continued to advance. (techopedia.com)
Before the introduction of digital technology, customers were required to walk in stores to make their purchase. Imagine if a customer has never visited that store before, he/she might get frustrated if they cannot find the items they are looking for in the aisles or they have to wait in very long lines to cash and might even leave the store without purchasing anything.
Implications and challenges for the marketing department of Massy Stores Guyana Inc. in increasing digital customer purchase behaviour
Digital technology in retail is all around us today and should be embraced by any retailer who is serious about meeting the expectations of today’s digitally-aware customers. The rapid rise has greatly influenced the way consumers buy resulting in businesses being forced to maximize customers’ experience utilizing digital technology. As such, this report will focus on the implications and challenges for the marketing department of Massy Stores Guyana Inc. in increasing digital customer purchase behaviour.
The digital Point of Sale (POS)/ Self-Checkout, a transaction system, has experienced great increase in popularity over the past few years. It is very time efficient and exactly what shoppers nowadays look for. Service is expected to be immediate and customers are even willing to leave back their selected items if the process takes too long. Many supermarkets such as Wal-Mart and Tesco are now seeing the value of allowing customers to take care of their own checkout process and are choosing to use this system. This would be a great implementation for the marketing department of Massy Stores Guyana Inc. Customers being able to check out when they’re ready would offer more convenience to their shopping experience. The opportunities for using digital point of Sale (POS) to enhance customer relationship are endless.
Customers can checkout and pay for their groceries faster rather than dealing with long lines at the cash register that get backed up. This system is really helpful during peak sales time when the supermarket experiences a large influx of customers. This can reduce the length of time and checkout lines which should keep their customers happy. Customer transactions can be taken care of with minimal space. In some cases, up to six (6) kiosks can take up the amount of space as a single traditional checkout area with a cashier. (business.org)
While people who are familiar with technology can navigate their way through self-checkout systems with ease, it can be difficult for others. This would require a staff to be knowledgeable or trained to assist these customers. Employees are unable to monitor customer transactions closely at self-checkouts so theft becomes easy. Some customers enjoy face to face interaction with cashiers and this system takes that away even though it is very efficient.
“Online shopping is the activity or action of buying products or services over the Internet. It means going online, landing on a seller’s website, selecting something, and arranging for its delivery. The buyer either pays for the good or service online with a credit or debit card or upon delivery.” (marketbusinessuse.com) The marketing department can have a website that enables customers to do online shopping. Customers can shop online using different devices such as computers, tablets and smart phones. The online shopping website should allow customers to browse the company’s wide range of products and services. Images of the products along with products information, prices and availability should be included. The website should also feature promotions and special savings.
Online shopping has grown rapidly over the past years. It is easy and can be done anytime from the comfort of home. It saves the trip to go to and from the supermarket and customers would not have to wait in lines to pay. It is ideal for people who are very busy. This would be a great investment by the marketing department as it can widen the customer base resulting in more transactions which will increase sales.
While providing online shopping facility to the customers, cost will be incur cost to have the website professionally designed and developed. Staff with expertise will be required to manage and maintain the website. Online fraud is also a risk.
Last but not least, Browse and Order Hubs can be established. These touch screen devices allow customers to browse the catalogue or scan barcodes on items and explore detailed product information, compare prices and check availability. These devices look like large IPhones and comes with a card payment machine. Customers can choose to order their groceries on the device and collect it at a later date or have it delivered. (econsultancy.com)
In order to have these hubs, expenses will be incurred to buy and install them. Like the self-checkouts, staff would be required to have knowledge on how to use the devices so that they can render assistance to customers who have difficulties in using same.
Definition and characteristics of a Product
“A product is anything that can be offered to a market for attention, acquisition, use or consumption. It includes physical objects, services, personalities, place, organizations and ideas” (Philip Kotler, 1988).
Product is the most important element of the marketing mix. The product marketing mix consists of four (4) Ps, i.e. product, place, price and promotion and decisions on the other elements are dependent on product. The total product includes brand, package and label (kullabs.com) and can be characterized by size, shape, quality, weight and colour.
Definition and characteristics of a Service
“A service is an act of performance that one party can offer to another that is essentially intangible and doesn’t result in the ownership of anything. Its production may or may not be tied to a physical product” (Philip Kotler, 2009)
Service marketing mix, also known as the extended marketing mix and is different from product marketing mix. It consists of seven (7) Ps. The additional three (3) being people to perform the tasks, physical evidence and the process of the service. Intangibility, inseparability, variability and perishability are the main characteristics of a service. (Philip Kotler, 2009)
Differences between a Product and a Service
People often confuse the terms product and service and use them interchangeably but they are significantly different. (differencebetween.net) The major difference between the two is that a product is tangible which means that it is physical in nature so it can be seen and touched and a service is intangible so it can only be felt and not seen. (differencebetween.net) A product is designed to satisfy the wants and needs of customers and can be taken away. With a service, satisfaction is obtained but nothing is taken away. Services cannot be inventoried and stored for later use or sale since they can only be used at the time they are being offered. On the other hand, products are perishable and can be stored for later use or sale. Products can be quantified and they come in different sizes, shapes and forms. However, services cannot be quantified. Whilst customers may choose different service provider, the concept remains the same. Services cannot be separated from the provider since they are consumed at the same time they are being offered but products can be separated from the owner once the purchase has been made. (differencebetween.net) It is easy to return a product to the seller for replacement or refund if it is wrong or damaged. A service cannot be returned to the provider since it is intangible. The value of a service is offered by the provider while the value of a product is derived from customer consumption. (differencebetween.net)
Marketing an intangible service
“Intangible services are becoming more prevalent as the business world evolves.” (business.com) People require different services to satisfy various needs and wants. Marketing a service to various customers is very challenging than marketing a product because of its intangibility. There are no physical features for customers to see and touch so the sale is dependable on experiential evidence. Some examples of intangible services are travel service, freight forwarding, insurance, repairing, consulting, education and health care to name a few. Customers buy these services based on how it makes them feel.
There are presently no intangible services offered by Massy Stores Guyana Inc. However, ways in which an intangible service can be marketed is recommended should the company decide to venture into offering some form of intangible service in the near or distant future.
When marketing an intangible service, it is important humanize the benefits of the service being offered and make it personal by making an emotional connection through demonstrating how the service you are selling benefit customers whether it’s physically, psychologically and financially. (Forbes.com)
It is important to also build trust because the prospective customers cannot try on or test the service, they are only able to experience it after it is offered. Telling stories of how your service helped other customers, getting customers to do testimonies and customers themselves to spread the word makes selling more real are all great ways to get customers to choose your services. (Forbes.com)
Many times businesses sell services and one of the greatest challenge is making an intangible service a tangible one. Pictures are worth a thousand words. Using pictures and metaphors will give customers something that they can visually identify with. (Forbes.com)
“Instead of having customers pick and choose services, combine them into packages that cater to individual needs and budgets.” (Forbes.com) Incentives such as promotions, discounts etc. can be added to the packages.
Giving samples and extending preview sessions of your service will develop rapport with targeted customers. By doing this, customers will be able to experience what they can accomplish by choosing the service.
Definition and emergence of Big Data
“Big Data is a general term used to describe the voluminous amount of unstructured and semi-structured data a company creates – data that would take too much time and cost too much money to load into a relational database for analysis. Although Big Data doesn’t refer to any specific quantity, the term is often used when speaking about petabytes and Exabyte of data.” (techtarget.com) Big data is characterized by the extreme volume of data, the wide variety of data types and the velocity at which the data must be processed and veracity or the accuracy of the data. (techtarget.com)
Twenty (20) years ago businesses collected data through point of sale transactions, responses to direct mail campaigns, coupon redemptions etc. Today, data is being collected through online purchases, click-through rates, browsing behaviour, social media interactions, mobile device usage among many others.
As a marketer, it is recommended that Massy Stores Guyana Inc. use Big Data based on the following:
How data is collected
Qualitative and quantitative are the two (2) known methods of data collection. Qualitative research is based on opinions, attitudes and intentions. It aims to understand why customers behave in a certain way or how they may respond to new products. Techniques of gathering this type of data are focus groups, interviews, and observations. Quantitative research based on large samples and is more statistically valid. Results that are easy to compare, summarize and generalize and is in numerical form is produced. Some techniques of gathering this type of data are surveys, questionnaires and digital analytics.
“Big Data comes from web, sensors, transactional application, devices, log files, social media etc. and much of it is generated in real time and in very large amount.” (IBM.com) At Massy Stores Guyana Inc., customer data is collected through the Customer Loyalty Program. (Questionnaire, 2018) Information such as name, address, telephone number, email address, date of birth, identification number, wedding anniversary etc. is collected during the registration process and stored in the database.
Use of Big Data
Big data is the raw material that marketers use as the building blocks of consumer/buyer insights.” Analysing Big Data allow marketers to make better and faster decisions using data that was previously inaccessible or unusable.” (IBM.com)
Big data is important to marketing organizations because they can make significant impact on key areas such as customer engagement where insights are delivered into not just who the customers are but where they are, what they want, how and when they want to be contacted; customer retention and loyalty where you can discover what influences customer loyalty and what keeps them coming back and marketing optimization/performance where businesses can determine the optimal marketing spend across multiple channels, as well as continuously optimize marketing programs through testing, measurement and analysis. (sas.com)
The information that is collected is used for various reasons such analysing customer trends or buying behaviour (Questionnaire, 2018). Massy Stores Guyana Inc. is able to know how customers buy and what they buy and is better able to understand and meet the demands of their customers. It is also used promotional purposes (Questionnaire, 2018) such as selecting top shoppers to be rewarded and even offering special discounts on customers’ birthday and anniversary.
Organisations keep sensitive personal information about their customers. It is vital to have a sound security plan in place to keep customer data safe and meet the legal obligations to protect that sensitive data. The Data Protection Act (DPA) is a United Kingdom (UK) Act of Parliament that was passed in 1988. This act is important because it provides rules and guidance for organizations to follow on how to use customer data. The rules are very thorough and cover rules around data sharing and data security. The law provides stronger protection for more sensitive information such as ethnicity, religion, political opinion, sexual life etc. Standards of the DPA can be met by ensuring the right technology, processes and people are in place to handle the quality of data held. Failure to comply with the rules set out by the DPA risk prosecution by the Information Commissioner’s Office (ICO) which is the body responsible for enforcing the act. Organisations can be fined and even imprisoned. (edq.com) However, in the United States of America (USA), there is no comprehensive law regulating the collection or use of customer data. Data protection is regulated through a number of specific federal and state laws. These laws are based on Fair Information Practice that was developed in the 1970s by the Department for Health, Education and Welfare (HEW). (thomsonreuters.com) Although there is no data protection law in Guyana, ( iNEWS Guyana, 2015) there are still measures in place to protect customer data at Massy Stores Guyana Inc. Their secured database require special logins and access level for information to be viewed. There is also a confidentiality policy which reinforces protection of customer data. (Questionnaire, 2018)
Big Data and the Consumer Decision Making Process
Big Data has the potential to enhance understanding of each stage of the consumer decision making process. In the first stage of the decision making process known as the problem recognition, the customer sees a gap between what he/she has and what he/she wants. Companies can sense this moment from a variety of sources such as social media, search queries, addressable advertising (Blattberg and Deighton, 1991) and direct marketing response. Qualitative research methods such as interviews and focus groups can be used to recognise problems and improved by Big Data.
Information search throws off digital data at every turn. Retailers can record all search activities on its website and shopping app such as logs recording all activities on the site, including which items have been searched, clicked on, added to a shopping cart or wish list, abandoned, purchased, etc. It also knows which search terms attracted prospective customers from search engines, and whether it was a paid search term or an organic one.
E-tailers will have data on alternative evaluations including consideration and inferred choices. Big Data can be utilised as input, including the choices of other shoppers (Ansari et al., 2000). This technique is collaborative filtering. Shopping cart abandonment (Kukar-Kinney and Close, 2010) can signal that customers are comparing prices on other sites. Search behaviour in general can provide additional hints on the way the consumer is planning to evaluate the alternatives.
The customer may form an intention to buy the most preferred product after evaluating the alternatives. This stage is called the purchase decision and is where the purchase actually takes place. This information can be retrieved from. Information on what is purchased can be recorded on the retailer’s website and shopping app
The customer assess whether he/she is satisfied or dissatisfied with the purchase. This step known as post purchase behaviour. And does not create Big Data by itself. Positive or negative reviews may be posted online.
Definition of Brand Loyalty
“Brand loyalty can be defined as the extent of consumer faithfulness towards a specific brand and this faithfulness is expressed through repeat purchases and other positive behaviours such as word of mouth advocacy, irrespective of the marketing pressures generated by the other competing brands.” (Kotler ; Keller, 2006) Brand loyalty exist when customers are unwilling to switch from brands that he/she is familiar with.
After a purchase a customer might experience dissonance that stems from noticing certain disquieting features or hearing favourable things about other brands and will be alert to information that supports his/her decision. Marketing communication should supply beliefs and evaluations that reinforce the customer’s choice and help him feel good about the brand. Marketers must therefore monitor post purchase satisfaction, post purchase actions, and post purchase product use. Satisfaction is a function of the closeness between expectations and the product’s perceived performance. If performance falls short of expectations, the customer is dissatisfied; if it meets expectations, the customer is satisfied; if it exceeds expectations, the consumer is delighted. These feelings make a difference in whether the customer buys the again. If the customer is satisfied, he is more likely to purchase the product again and say good things about the brand to others on the other hand, disappointed consumers may abandon or return the product, decide to stop buying the product and even warn their friends.
Building Brand Loyalty
It is important for companies to create a strong, tight connection to customers to maintain loyalty.” Interacting with customers or listening to customers is crucial to customer relationship management.” (Kotler and Keller, 2009)
Developing loyalty programs is another way of building loyalty. These programs are designed to provide rewards to customers who buy frequently and in substantial amount. They can go to build long term loyalty with customers. This program was originally pioneered by hotels, airlines and credit card companies but now exist in many other types of businesses. (Kotler and Keller, 2009) Massy Stores Guyana Inc. has an established customer loyalty program managed by the customer service department. Customers are given a loyalty card where they build points when shopping and are able to redeem after accumulating a substantial amount of points.
Delivering excellent customer service matters when it comes to ensuring customers make repeat purchases. Very often customers do not return because of failure to deliver on customer service. It is the company’s responsibility to ensure there is an easy, clear and accessible way for customer’s to communicate with you whether it’s in live chat, by phone or in person and that someone is specifically assigned to customer service. Massy Stores Guyana Inc. is big on delivering excellent customer service hence, there is a customer service department to focus on customer-based concerns. There is also continuous customer service training to ensure that all employees are equipped to delight every customer, every day, every time.
Issues and challenges in maintaining Brand Loyalty after a customer’s purchase
Businesses cannot succeed without keeping customers loyal to their brands. Customers are the greatest asset to a business. Even though there are established systems in place to build and maintain brand loyalty there are still issues and challenges that Massy stores Guyana Inc. might face in order maintain loyalty after a customer would have made a purchase.
Poor after sale services is a major challenge. After sale services are the processes which ensure customers are satisfied with a product or service after they would have made a purchase. It plays an important role in customer satisfaction and retention. Staying in touch with customers, following up after they would have made a purchase, being receptive to their feedback and complaints, and even showing appreciation are all part of providing after sale services. Poor after sale services will result in not be able to build proper long-term relationships with customers. Customers may not believe in their brand and may not return neither refer their business to anyone.
The key to repeat purchase is availability. Consistency begins by pinpointing the products or services your customer wants to buy and the reason why they buy them. Inconsistency in product availability can leave customers with no other option but to choose a substitute products or even take their business elsewhere which can be problematic for Massy Stores Guyana Inc.
Customer service is the interaction between employees and customers and is an integral part in customer experience. Customers might not reach out the company when they receive a poor customer service experience. Instead, they will reach out to their friends and families. If the customers are not treated right and the company becomes known for bad customer service its reputation will suffer, customers will not return, and the company can go out of business.
Failure to offer exchange or refund to a customer for a product that is faulty or incorrect can result in the erosion of brand loyalty.