This is Part 1 of the Retail TouchPoints Retail Analytics feature, spotlighting how retailers can make better marketing decisions by using retail analytics. The two-part report also highlights current trends and challenges retailers are facing while collecting and analyzing customer data across digital and physical channels. Part 2 of the Retail Analytics feature will appear in the October 23 newsletter.
Today’s consumers are more hyper-connected and educated than ever before, causing retailers to scramble to deliver optimal marketing messages and offers based on the unique wants and needs of every shopper.
Merchants are struggling to implement cross-channel marketing campaigns that match customer demographics and psychographics ― largely because they are in the early stages of conquering Big Data. The sheer amount of customer information retailers must collect continues to rise as the amount of unstructured data collected via social networks and mobile increases exponentially.
Due to the need for more relevant and consistent shopper experiences across channels, best-in-class retailers are learning how to harness the power of Big Data using strategies and technologies that track and analyze customer behavior as well as transactions.
In a report, titled: Marketing In Retail: Making The Case For The CMO, Retail Systems Research (RSR) spotlights how retailers currently are implementing analytics tools and solutions. These include the following:
Social media analytics (27%);
Web analytics (24%);
Market basket analytics (24%);
Customer purchase analytics (31%); and
Predictive analytics (23%).
“To create relevant marketing messages, offers and campaigns, retailers today need to truly comprehend their customers’ behaviors, but they can’t without analytics,” Larry Freed, President and CEO of ForeSee, told Retail TouchPoints. “Retailers must extend data collection to all channels and devices to combine behavioral data along with demographics and feedback gathered online and in stores. It is critical that they collect the ‘right’ data then analyze it zealously to deliver the most relevant messaging to today’s cross-channel customers.”
A selection of the demographic and behavioral data currently being captured by retailers, according to RSR, includes:
- Email (47% demographic and 45% behavioral);
- In-store (45% and 41%);
- E-Commerce site (39% and 35%);
- Social networks (38% and 31%);
- Call center (37% and 35%);
- General consumer mobile data (33% and 25%); and
- Location-specific consumer mobile data (17% and 21%).
“Analytics is the source of insight that enables retailers to understand who customers are, what they like, when they shop, and their responses to specific offers and promotions,” Paul said. “When combined with additional quantitative research, merchants can better identify why customers behave like they do.” Collectively, these capabilities enable retailers to target customers with relevant, timely and highly targeted campaigns, she said, that will increase response, sentiment and loyalty.
Using Retail Analytics To Power Personalization
Social media and mobile technology have provided convenient vehicles for shoppers to access products and information in real time. As a result, retailers are seeking the most effective ways to connect with consumers via these channels, and deliver more relevant offers and personalized marketing messages.
Merchants should seek to create real-time offers based on consumers’ browsing and buying histories, geographic locations, and personal styles and preferences. “Customers like and expect to be understood,” Paul emphasized. “The greater the personalization, the more likely they will feel special and appreciative of retailers’ marketing efforts.”
The more data that brands and retailers can collect about customers, the more information they have to leverage in personalizing the entire brand experience. However, in order to achieve these more relevant cross-channel marketing campaigns, retailers must make data collection and analysis a top priority.
“The data brands collect enables customer understanding,” Jay Henderson, Strategy Program Director at IBM, told Retail TouchPoints. “This in-depth information allows brands to determine the most effective and relevant selection of marketing messages and campaigns they disseminate to customers.”
Retail analytics solutions also allow organizations to track each consumer’s unique browsing and buying behavior, and in turn, better pinpoint shoppers who are more ready and likely to buy, according to Mark Rose, SVP of Sales for BrightTag. In doing so, retailers will be able to create more compelling offers and incentives to increase likelihood that a purchase will be completed.
“Along with receiving insights on channels being used to browse and buy, retailers can use analytics to track behavior and engagement online, which adds greater depth to customer profiles,” Rose said. “For example, a customer who is viewing multiple photos of an item, or clicks on reviews, is likely a higher value prospect than someone who looks at the product for an instant before clicking off the page. Instead of simply launching the same retargeting campaign on both users, the retailer should be more aggressive on the more engaged customer.”
Tackling The Integration Challenge To Achieve Omni-channel Success
Retailers across verticals are recognizing that structured and unstructured data integration is paramount to cross-channel success. However, disparate systems and sources are causing retailers to veer off course from implementing the personalized marketing strategies that granular data integration provides, according to research from Aberdeen Group.
In a report, titled: A New Retail Paradigm: Solving Big Data to Enhance Real-Time Retailing, Aberdeen Group revealed that for 62% of retailers, “escalating Big Data related complexities within their enterprises makes day-to-day decision-making and creating a single view of the product and customer an arduous task.”
Moreover, the report indicated that 70% of merchants worldwide currently are grappling with approximately eight disparate sources of business and customer data — both structured and unstructured — within their organizations. These convoluted data collection practices, according to Cindy Etsell, Head of Retail for SAS UK and Ireland, are hindering retailers’ efforts to categorize, analyze and understand shopper behaviors and preferences across channels.
“Retailers need to make sure that all data sources are clean and integrated, whether they are in-store records, or online and mobile information,” Etsell reported. “Data won’t provide any true value or insight to retailers unless this collection and integration takes place. A master data management system plays a key role in ensuring that disparate sources of data are brought together rather than kept separate, siloed and untapped.”
Approximately 80% of retailers have (63%) or plan to add (16%) a CRM program to better track customer behavior across channels, according to Retail TouchPoints research.
The report, titled: Meeting The CRM Challenge In 2012 And Beyond, also revealed that 60% of retailers already integrate data across channels, while another 17% have future plans to do so. These results underscore that retailers are striving to have a cohesive view of their customers to create more efficient marketing campaigns and in turn, decrease costs.
Retailers that harness the power of retail analytics through CRM and other solutions can make a smoother transition to omni-channel retail operations, messages and experiences. This will help organizations create more consistent brand experiences for consumers, regardless of the channel being used.
“Customers today are in control of all retail experiences, and they are looking for personalization, transparency and value at every interaction touch point,” reported Marc Schroder, VP of Customer Management Solutions at Teradata. “Using a data enterprise warehouse provides retailers the solid foundation they need to integrate online and offline data, both structured and unstructured, which is key to obtaining that 360-degree view of a consumer. Retailers then can disseminate offers and messages that speak specifically to a consumer’s unique situation.”
Obtaining this 360-degree view of consumers and their browsing and buying preferences will provide retailers with the in-depth insights required to implement optimal cross-channel marketing strategies. By gathering and analyzing data, and customizing offers, messages and product recommendations based on this information, will increase customer retention and maximize loyalty efforts.
Part 2 of the Retail Analytics feature will run in the October 23 newsletter.