"In the era of unlimited customer choice, every retailer's prime job is to understand when and why a customer will choose them instead of a rival. We're the first and so far only analytics platform that can tell them that."
Richard Hammond, Uncrowd CEO and Co-Founder
The retail industry is going through significant and unprecedented changes right now. Every week we hear about yet another well-established household name announcing store closures and redundancies. Whilst it is tempting to assume that this is all purely down to the recession, the reality is that a great number of retailers are actually performing exceptionally well in the current climate and have record high share prices. So, what is the core difference between those retailers that are doing so well and those that are now failing?
One tech company that is guiding retailers through the many challenges of today’s turbulent market is Uncrowd, a London based retail analytics company that specializes in helping retailers focus on the right metrics so that they can fully understand their customer behavior.
We spoke to Richard Hammond, CEO and Co-Founder of Uncrowd, to discover more about the impact their solutions are having on the retail industry during this critical time.
Many retailers are really struggling right now. How is Uncrowd providing a route to success in the retail industry?
“In the era of unlimited customer choice, every retailer's prime job is to understand when and why a customer will choose them instead of a rival. We're the first and (so far) only analytics platform that can tell them that. For example, if you sell shoes and you don't know if you're in a customer's handful of go-to choices for shoes, or if you're an ‘also-ran’, then how can you make good marketing, investment, service, range, and pricing decisions?”
“First choice or also-ran? That's what our platform surfaces from dozens of data-driven friction/reward choice variables.”
Can you tell me about the impact Uncrowd is having on the retail industry right now and how you are helping them?
“The benefit of being in a customer's small set of preferred options for a given shopping mission is gigantic. In physical retail, Envirosell have observed that 80% of shopping missions are fulfilled by the first retailer in which the customer positively engages, even when that customer goes and has a look elsewhere. In grocery, the more missions one retailer can win, the higher the share of a customers' total spend they win. Knowing exactly what you need to do to win in more shopping missions is a prize of massive proportions. Online, where customer acquisition costs can be stratospheric, look at Wayfair paying up to $196/customer, knowing how to keep that customer coming back across missions is golden.”
What do you consider to be the number one thing retailers should be focusing on right now to ensure survival?
“If you know exactly how to win missions versus your competing alternatives, you know exactly what to do to adapt and survive. It's that straightforward. Having the numbers that prove both how to do that and the value of doing it makes it possible.”
Many online retailers are doing well right now. What are the differences in the ways you help online retailers versus offline high street retailers?
“This is very important; we don't separate out the channels. Customers don't do that when they're thinking about buying something, they go to whatever channel/brand/retailer that suits their immediate mindset and mission. This means that we are able in the platform to compare online, offline and more together. That's huge.”
Artificial Intelligence is a critical component of your products. Can you tell me about what part AI plays in your technology and why it’s so important to helping retailers?
“We're so excited by the potential of AI in analytics; we’re training AIs to surface the best combinations of variables to meet different needs: does the client specifically want to increase loyalty, or boost their NPS, or build market share faster and so on. Those AIs right now are like children with potential: sometimes surfacing incredible insight that makes you go 'wow' and sometimes producing utter nonsense - which is the fun of training them over time. Later we will be building client-specific AI off of those base positions and will be building out a practice within the business to do that.”
There are lots of ‘technical’ analytics companies out there yet many of them have little or no real industry experience. You and retail have a long history together though and you also write books on the subject. Can you tell me about your latest book Friction/Reward and the relationship between this and Uncrowd?
“Because Friction/Reward as an idea is very new, I felt I needed to get under the skin of it properly. If I was going to do that then writing it up as a book made sense and Pearson, my publisher, had already asked me to find something to new to write for them. Not many companies get to do their research with a publisher's advance in hand, I was very lucky. I'm incredibly proud of the result and would urge anyone with customers to read it; we really have uncovered something special in Friction versus Reward and it's power is available to everyone.”
Retail is clearly something that you are immensely passionate about. What is it about retail that excites you most and what is it that motivates you and the Uncrowd team?
“For me retail has ALWAYS been the thrill of knowing that the person who is spending money with you has chosen to do that with you when they could have chosen a dozen alternatives. I've been obsessed with the question 'why here, why us?' since I first worked in a hi-fi shop at 15. So, what motivates me and excites me about Uncrowd? That we are the sharp point of a wedge that is next generation customer analytics. We're building nothing less than the future of understanding why customers prefer one retailer, or one brand versus others. It's like magic, like building the secret weapon that means we'll all be home by Christmas. You can't help but be intoxicated by that.”
You mentioned the future. What do you consider to be the future of retail and why do you think Uncrowd’s approach is critical to this future?
“Retail's future is retail's past: working out how best to put the right thing in front of the right person at the right time. That's what we've always done and it's what we always will do. Simple to say, but fiercely challenging and fun to do. What's changing is the complexity of the tools which we can do this; Uncrowd and especially understanding customer preference is the key to cutting through that new complexity to see how to deliver the best options in the best ways to the most people.”
The retail world is changing and the only certainty is that there will be winners and losers. What’s clear is that the difference between those retailers that win and those that lose will come down to how well they understand customer behavior. Whilst all retail businesses collect data on their customers, it is pointless unless retailers are capturing the right customer metrics, interpreting those metrics correctly and then reacting to what those metrics are telling them and it is the innovative tech companies such as Uncrowd that are leading the way in helping today’s retailers thrive through a deeper understanding of what ‘really’ matters to their customers.
