How To Collect Customer Data The Right Way in Retail sector

Written by Flame

collect customer data in retail

To provide the best possible service, a retail business needs to know how to collect customer data. They need customer data in order to be able to make predictions about the changing customers’ preferences and to meet their needs.

For a retail business, it is crucial to have the right data in place for their business to thrive. Data is the key to success, and you can use it to boost performance and understand customer behavior more. It is especially true in the retail sector. Data is collected using different methods, but they all lead to the same goal—gathering information about what customers are doing, what they want, and what they are looking for.

In this article, we will teach how to collect customer data the right way in retail sector. But, before that, let’s know why it is crucial to collect data, especially in the retail industry.

Importance of collect customer data in retail

Retailers are constantly faced with the challenge of differentiating themselves from other retailers. Apart from the differentiating factors like price, quality, service, or convenience, retailers need data to understand their customers and serve them better.

Some of the ways by which they can serve their customers better using data are as under:

Customer-centric products

To remain in the competition, retailers need to stay ahead in the game. To do that, they must understand what their customers want. The collected data provides valuable insights in this regard. After they have known customers’ wants with the help of collected data, they must start building customer-centric products. These must be the customers’ products that are actually wanted, not just something random.

Simply put, data will help create customer-centric products. Because customer-centric products are something customers actually want, the retailers can expect a surge in sales.

Improved customer experience

Sometimes, the customers can’t explicitly express their actual needs and wants, but their data does that. So, retailers can utilize this data to enhance customers’ experience.

For example, if the data shows a pattern of two products being purchased together. In this case, the retailers can enhance customers’ experience by keeping both products near each other on the shelves. Or, the retailer can offer a discount on purchasing them together. This way, you can enhance the customers’ experience with the help of collected data.


How to collect customer data the right way?

Here are some of the ways you can collect customer data the right way in the retail sector:

1. By using POS system

What is a POS system?

A POS system is the fusion of software and hardware to digitize and improve conventional business operations. The hardware of POS may include a computer, a server to save the data, etc. The software gives you the interface to interact with this hardware. The functions of a POS system include but are not limited to managing your inventory, employees, customers, and sales. Now that you know what is a POS system let’s see how to collect data with it.

How to collect customer data with it?

As a POS system manages inventory, it can tell the best-sellers and the worst-sellers. This information can help you know where to invest more and which products to remove from the shelves. Similarly, you can also use a POS system to save your customers’ contact information which you can use for SMS or email marketing.

2. Website cookies

When a customer comes to your website, they can leave a cookie. A cookie is a small file stored in an individual’s web browser. This file saves data about what websites the user visits and how often they visit them. When someone uses your website, they may be leaving cookies with you to track their visits and determine what they are interested in.

For example, if someone comes to your e-commerce website and looks at products for one minute but doesn’t make a purchase, you might send out an email or text message asking why not. However, there are some legal restrictions on using these website cookies and the data collected. These restrictions are defined in the data privacy laws.

Data privacy laws

Privacy is a fundamental right of every human that should not be violated. Therefore, every person is entitled to data privacy, and a data privacy law ensures that it is not being violated. Some of the data privacy laws are territory-specific, while some apply internationally.

For instance, California Consumer Privacy Act (CCPA) is a territory-specific law that ensures the privacy of collected data in the Californian region. Similarly, the General Data Protection Regulation (GDPR) is one of the most stringent data privacy laws that apply internationally.

3. Surveys

A survey is an easy way to collect customer data. Surveys are easy, quick, and can provide accurate information about customers. You can use them in different ways through emails, website forms, or social media platforms.

The advantage of using surveys is that they are cost-effective and straightforward for both the business and the customer. 

  • It makes them an excellent way to gather information without getting into anything more complicated than asking people questions about their experience with your product or service.
  • It also provides an opportunity for customers to contribute to the company’s decision-making process by providing feedback on products or services they’ve experienced or experienced problems with.
  • It can also provide valuable insights into what people like or dislike about the company. Also, by using surveys periodically, you can track the changing perceptions of your customers. These follow-up surveys ask respondents about their experience after a certain amount of time has passed since their original survey was conducted.

This is helpful because it will show whether or not people have had any changes in their perception of your business and what you need to do to improve it.

4. Social media platforms

Social media platforms are a great way to collect customer data. Using these platforms, you can get a lot of valuable insight into what your customers want and how they want it.

By using social media platforms, such as Twitter or Facebook, you can find out if people are asking for certain products or if they are just talking about them. Then, by analyzing the conversations on those platforms, you can figure out which types of products your customers like the most and where they might be looking for them. You can then use this information to decide future product marketing campaigns.

By observing trends in conversations on social media, you can also have a good idea of your customers’ interests. This is important because it will help target the audience more precisely and help predict needs that might arise that would need to be serviced by you.  In addition, this will make sure that your business is doing everything it needs to keep up with the demands of its customers.

5. Collecting customer data by asking them directly

Another best way to collect customer data is by asking customers directly. You can do this through in-store conversations or even social media platforms. For example, a retail store may ask customers questions about their specific needs. A retail store could also get this information from social media platforms like Facebook and Twitter by texting their customers.

This type of data is valuable because it allows you to predict what products need to be ordered in advance. This way, you can give your customers what they want as per their data. What after you have collected data by any of the above-mentioned ways? It’s the time to analyze the collected day, draw inferences from it, and use it for your business’s advantage.

6. Use of data analytics software

A retail business needs to analyze its data and draw conclusions from it. For that, they can use data analytics software. These programs allow businesses to make predictions based on the collected information in an easy way for them to understand.

Many different industries use data analytics software, including retail, education, health care, and financial services. Retailers use these types of software to gain a deeper understanding of their customers and how they shop in order to improve their service. It allows companies to know what products are selling well and which ones need improvements or adjustments. 

You can find good data analytics software online. Furthermore, they are available at affordable prices, so you don’t have to break the bank to implement them into your business.

Importance of customer data

Whether you have a small or big retail store, you can use customers’ data in different ways to increase ROI and develop your products range.

According to the data collected, you should analyze the market, and put a better price on the products, desire products from trustworthy suppliers, and develop them according to the customers’ preference. Therefore, you should definitely consider collecting customer data and using it to increase your business profits. However, you must be careful in how you collect it because the wrong data can be fatal for your business. 

The ways this article mentions to collect customer data in the retail sector are the right ways to collect it. So, opt for one or more of them to collect what your business needs.


Flame solutions for Retail

Once you have understood the importance of collecting customer data in your retail store in order to create successful strategies and improve your results, you may be interested in taking a look at our solutions for the retail sector.

Flame analytics offers specific solutions for this industry. With them you will be able to know what happens in your store and how your customer behave when they visit your place. Collect, store, measure and analyze all data in one platform. Organize data and create personalized dashboards to understand them.

You will also have the possibility to create personalized marketing campaigns and send them to segmented audiences that you will have previously created based on the data collected.



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Schedule a 20 minute meeting with our experts to understand how you can use Flame in your organization.

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