Personalizing retail: Data-driven customer engagement with Dynamics 365

Staying ahead of the competition in 2024 means retail companies must adopt a "total experience" approach that leverages emerging artificial intelligence (AI) solutions to improve every aspect of business operations.

In the first of our three-part series, we explored the advantages of Dynamics 365 in streamlining critical operations, such as supply chain and inventory management. Now, we're diving into the impact of data-driven customer engagement: How Dynamics 365 can help businesses make better decisions, improve customer connections and simplify transactions.

The priorities and pitfalls of personalization

Companies can't afford to ignore the impact of personalization.

Thanks to the abundance of information now provided by demographic data, transaction records and customer-provided details, it's possible for businesses to zero in on what customers want and deliver experiences that make buyers feel like more than just another sale.

According to recent survey data, 66% of consumers expect companies to understand their needs and expectations, and 52% of buyers want personalization to be a part of every business interaction. The challenge? Despite the increasing importance of personalization, companies often come up short.

As noted by Forrester research, customers tend to prefer personalization in the purchase and post-purchase stages. For example, 43% say they enjoy personalization when they're buying products, and 47% like personalization after they've made a purchase. However, companies often focus on the discovery and research stages of the purchasing journey, with 66% personalizing these early stages and less than 33% providing post-purchase personalization.

The result? Customer data isn't enough on its own. Instead, retail companies need insight that helps them pinpoint where and when buyers want personalization and how they want it delivered.

How Dynamics 365 helps cultivate customer engagement

Solutions such as Microsoft Dynamics Customer Insights Journeys are capable of processing customer interactions, sales figures and social media feedback to deliver a multidimensional view of a company's consumer base.

In practice, Dynamics 365 can help retailers drive data-driven customer engagement in four key areas:

Customer life cycle management

At the core of Dynamics Customer Insights Journeys are comprehensive data analytics tools that can process customer interactions, track sales figures and collect social media feedback. This makes it possible to identify critical touch points in user engagement, which, in turn, allows companies to help predict when personalization will be most effective in the customer life cycle and what steps they can take to prevent customer churn.

In addition, this data can help fine-tune loyalty programs to ensure customers feel valued and understood.

Individualized marketing campaigns

Customer Insights Journeys also helps retailers create individualized marketing campaigns that speak directly to consumers' needs and preferences.

By analyzing key information, such as purchase histories, customer support interactions and engagement levels, Dynamics 365 gives companies the data they need to create offers that are more likely to be converted and processes that help boost customer satisfaction.

Personalized shopping experiences

While online purchases are steadily rising in number, in-store retail retains the largest proportion of paying customers. For these brick-and-mortar businesses, Dynamics can help teams make informed decisions about product assortments, store layouts and targeted promotions.

Simplified transactions and checkouts

Efficiency at the checkout is a critical element of the customer experience. Microsoft Dynamics Commerce simplifies this element of the shopping journey with a comprehensive transaction system that integrates diverse payment methods and platforms into a single, fluid process.

For example, Microsoft Dynamics Commerce includes a native payment connector to Adyen for a truly global and integrated omnichannel payment flow. And since Microsoft maintains the connector, each update is seamlessly implemented and managed for true continuous business process optimization. For retailers with specialized needs, this payment connector can be extended for virtually any payment flow.

Making the most of Microsoft Dynamics in retail

The information and insight offered by Dynamics 365 make it a key component in the development of total retail experiences. However, making the most of Microsoft Dynamics starts with a three-step approach to implementation and deployment.

Step 1: Conduct a data audit

Businesses should conduct a data audit to discover what data they're currently collecting and how it can be better utilized. This helps focus Microsoft Dynamics Customer 365 functions where they're needed most and can deliver the biggest benefits.

Step 2: Pinpoint the pain points

It's also important to pinpoint any pain points in current processes, such as bottlenecks in transaction operations or issues with post-purchase customer service. With pain points prioritized, businesses can apply Microsoft Dynamics 365 to reduce friction and streamline processes.

Step 3: Fill in the gaps

Once retail businesses understand their current landscape and identify customer engagement goals, they can use Dynamics 365 to fill in the gaps and create more nuanced customer experiences that go beyond basic personalization — and deliver truly unique interactions.

Cultivating consistent engagement

With Microsoft Dynamics 365, retail businesses can collect and curate customer data that helps them deliver truly personalized and unique experiences.

Combined with streamlined operations, companies can then implement the final component of total experience: building customer loyalty and enhancing associate interactions.

See how Microsoft Dynamics can drive loyalty and enhance the employee experience in the final part of our total experience trilogy.

Work with us

The information provided here is for general guidance only, and does not constitute the provision of tax advice, accounting services, investment advice, legal advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other competent advisers.

Learn more