Forbes.com Interview with David Altman, CEO of MarketShare Advisors Interational by Barbara Thau.

1. How Big Data Helps Stores Like Macy's And Kohl's Track You Lik...
http://www.forbes.com/sites/barbarathau/2014/01/24/why-the-smart-...
Barbara Thau, Contributor
I write about the intersection of retail and consumer trends.
R E T AI L | 1/24/2014 @ 8:30AM | 19,956 views
How Big Data Helps Stores Like
Macy's And Kohl's Track You
Like Never Before
As to be expected at events in any industry, executives at the National Retail
Federation’s Big Show last week lapsed into lazy talk – bandying about vague
notions such as “customer centric solutions,” while ticking off hot retail buzz
terms like “personalization” and “omnichannel selling” without always
delivering concrete examples of what those terms will mean in 2014.
But along with the nebulousness came some meaty insight on what’s poised to
revolutionize how retailers serve shoppers: Big data.
IBM chairman and CEO Ginni Rometty did a good job of demystifyng the
concept.
While merchants are guilty of discussing initiatives du jour in hyperbolic
tones, big data is “one that is actually under hyped,” she said in her keynote
address, “A New Era of Value,” which included a discussion on the topic with
Macy’s CEO Terry Lundgren.
“Information is going to be our generation’s next natural resource like steam
was to the 19th century,” she said. That’s because “there are a number of
technology shifts and their convergence is happening at once.”
So what is big data in terms of its relevance to the retail industry?
In the simplest terms, big data offers a means to understand shoppers via
myriad digital touch points – from their online purchases to their presence on
social networks.
“Mobile is everywhere – more people have a cell phone than running water
and 25% of the world will be on a social network – that’s what created all of
this big data: 2.5 billion gigabytes [of data] is created per day,” she said.
To put it in perspective the newness of it all, 80% of the world’s data has been
created in the past two years, she said, a statistic also quoted by others in
several show sessions.
It’s composed of structured data, “things that come in rows and columns,”
and “unstructured data,” such as pictures, videos, tweets and location-based
data.
And why should big data be top of mind for merchants? Because “it will be
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retailers’ basis of competitive advantage … and will be how you engage with
your customers,” she said.
Kohl’s, for example, is testing real-time, personalized offers in five of its
stores. Shoppers who walk into one of those stores can opt in for offers via
their smartphones. So if a shopper lingers in the shoe department, for
example, they’ll receive a coupon based on “the shoes they looked at online
but never bought,” Rometty said.
And there’s a good chance Kohl’s will earn that sale. That’s because
“customers are more likely to respond to an offer when it’s at the moment of
purchase when they’re shopping.”
What’s more, “almost 70% of you want information and a coupon when you
shop,” she said.
Big data has given Vera Bradley insight into what shoppers want while
delivering a return on investment for the retailer/supplier of colorful quilted
handbags.
The company switched from sending shoppers blanket email promotions to
sending targeted offers based on individual shopper purchases.
As a result of the targeted email strategy, Vera Bradley sent 63% fewer emails
but generated a 101% increase in shopper click throughs and a 275% increase
in the conversion rate of browsers to purchasers, Women’s Wear Daily
reported on the show session, “What Do Handbags and Diamonds Have in
Common? Applying Big Data and Analytics to Fashion.”
But while big data might hold the key to newfound consumer insight, retailers
are grappling with how to meaningfully process – and ultimately monetize —
huge amounts of unstructured data – all those consumer tweets, pictures and
videos.
That unprecedented struggle came to the fore during the NRF session
entitled, “Mapping The Consumer Genome to Drive Profitable Growth in
Retail.”
It’s a challenge – even a headache – that’s been largely handed to the chief
information officers at retail chains.
Target, for one, uses “social sentiment data” – insight gleaned from social
networks — to monitor how shoppers respond to its designer collaborations,
said Melissa Flicek, director of project delivery for Target.com, during the
session.
Still, understanding all the reams of data “is incredibly difficult,” she said.
And “how much data do you really need?” questioned David Altman, CEO of
MarketShare Advisors International, a boutique advisory and investment
firm, and a former senior executive at Neiman Marcus and Limited Brands.
The danger of an overreliance on data is “analysis paralysis,” he told Forbes.
“Retail is about surprise, delight, enticement, wonder, discovery. At the end of
the day, this is an art more than a science.”
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