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  1. 1. CUSTOMERINSIGHTDECEMBER2012 Where are the best places to find data on shoppers? Cancustomerinsighthelp improvearetailer’sbrand? Brand awareness, pXII What‘bigdata’meansand howretailersareusingit Big data, pIX Effectiveuseofdatafrom socialmediaplatforms Social media, pVI CRITICal INSIGHT In association with
  2. 2. 300m households World’s leading brands InspIrIng loyalty We help some of the world’s leading brands connect with their best customers through loyalty and insight programmes. Why not speak to us about how we can help you transform your customer relationships? contact Will shuckburgh / Md european Commercial development T 0207 152 4806 / Proud sponsors of the Loyalty Awards 2013
  3. 3. CUSTOMER INSIGHT Whatshopperswant CONTENTS Data sources IV Selecting the best sources of customer insight Social media VI Turning data from social media sites into an effective sales tool Big data IX The industry’s favourite buzzword explained Brand awareness XII How customer insight can improve a retailer’s brand Mobile XIV How smartphones help retailers determine a shopper’s behaviour W ith competition hotter than ever in retail, and customer loyalty faltering, insight into shopper behaviour has never been more important. Finding out information about your customers should, in theory, be easy. Mobile phones and social networks are helping retailers discover more about shoppers than ever before and, with everything from location data to opinions on products available, using such insight to shape a retail offer seems like a no-brainer. But the practicalities are never that easy. It might sound like a great idea to skim insight and information from social networks and smartphones, but it’s not a straightforward process. On pages VI and XIV we find out what’s happening in this field at the moment. Developments in mobile and social technology have contributed to the advent of the term ‘big data’. It has long been one of the IT industry’s favourite buzzwords, but it’s not always clear exactly what it means. On page IX, we look at how it’s being defined, the inherent challenges, why it’s important and what retailers are doing with it. And on page IV, we identify the best sources of customer insight. How can retailers find out what they want to know, and where are the best sources of data? With so much to learn about shoppers and with each retailer having unique requirements, the answer is likely to be different for everyone. Developing the use of data might be a great idea, but it’s certainly no mean feat. Rebecca Thomson,Supplement Editor December 2012 Retail Week I t feels almost odd talking about customer insights being central to a modern-day retailer. It should by now be taken as given that, in today’s multichannel market, every retail operation needs to have a clear sense of who its customers are and what is directly relevant to them – a sense increasingly driven by technology and data. Central to this is the careful collection and analysis of customer data, often facilitated by loyalty programmes, from which are derived insights that build lasting one-to-one customer relationships and, ultimately, drive profitability. Retailers that ignore this pivotal shift in today’s retail economy, and continue to rely on poorly-targeted mass-marketing and discounting are operating on borrowed time. New technologies are rapidly expanding the routes to engage with consumers, which means classic loyalty programmes must also evolve to incorporate the latest consumer interactions, connecting the ‘data dots’ between different customer touchpoints in order to better understand behaviour. Today’s retailers must identify not only transactions through the swipe of a card, but customer interactions across every touchpoint and platform they own. Where this leads us is that, whatever new tools are developed to generate insight, there needs to be a realisation that customer insight and loyalty should be moved not just to the heart of any retailer’s marketing strategy, but to the heart of its corporate strategy. Only by putting customer relationships at the heart of their operations will retailers build and sustain loyalty and advocacy. David Johnston, President and Chief Executive of Aimia in Europe and the Middle East In association with CUSTOMER INSIGHT SUPPLEMENT Supplement Editor Rebecca Thomson 020 3033 2839 Contributors Claire Burke, Trevor Giles, Gemma Goldfingle, Tiffany Holland, James Knowles, Alex Lawson Supplements Production Editor Tracey Gardner 020 3033 2769 Art Editor Jon Hart 020 3033 2843 Production Manager Paddy Orchard 020 3033 2679 Senior Account Manager Imogen Jones 020 3033 2969 Group Commercial Director Mandy Cluskey 020 3033 2965 Managing Director, Retail Tracey Davies 020 3033 2895
  4. 4. A s consumers continue to feel the pinch, understanding every nuance of their pur- chasing habits has become increasingly crucial for retailers keen to keep people spending. Shopper insight was thrust firmly on to the news agenda earlier this year when Tesco chief executive Philip Clarke declared he would bring Clubcard, run by data firm Dunnhumby, ‘back into the heart of the business’ in his £1bn ‘reset’ of the grocer. The fact that Clarke believes the data specialist is vital in reconnecting with disenfranchised customers in the UK’s largest retailer’s crucial domestic market signals the importance of collecting shopper data. But it is how the grocer is deploying this data that is of interest to the wider market. Clarke’s promise to offer a more personalised, localised offer But perhaps the most traditional methods of collecting data on custom- ers are focus groups and mystery shops. Bringing together groups that either represent a particular social demographic or a wide range of shoppers allows retailers to understand everything from how an in-store initiative is performing to whether marketing efforts are improving brand image. Gary Topiol, managing director of customer experience management group Empathica, believes retailers need to pick out trends. He adds that retailers should not end up relying too heavily on insights from a tiny sample size of their total customer demographic. Topiol, who has worked with retail- ers including Boots, Debenhams, Iceland and Waitrose, believes quality data comes from both engaging with shoppers and creating depth of infor- mation.“Thebestcustomerinsightpro- grammes have a strong foundation on solid data gleaned from real customers. From our work with Iceland, for exam- ple, we’re able to capture in excess of 1,000 pieces of customer feedback per day, which we then analyse and report back to the brand, often at a location level,” he says. “Having customer data on this scale makes justifying opera- tional changes at board level much eas- ier, and adds weight when rolling schemes out to employees.” In addition, loyalty cards remain a key source of shopper data and one which retailers often turn to. Alongside Clarke’s declaration, Jaeger, Waitrose and Holland & Barrett have all made efforts to improve their loyalty pro- grammes in the last year. For shoppers, the schemes offer rewards after accru- ing points. For retailers, they offer significant insights. A crucial decision Selecting which source of data to use can depend on the end goal. Sains- bury’s, for instance, uses trends found in its Nectar data to inform the ques- tions focus groups are asked, which in turn help to shape ranges. Sainsbury’s director of loyalty and insight Andrew Mann says: “We run panels where we can talk to Nectar customers. You can ask someone who buys biscuits what they think of biscuits rather than sim- ply pulling in a selection of customers who don’t buy the product you are studying so their opinion is of less use.” Sainsbury’s uses a number of methods to capture data alongside Nectar. These include eye tracking Diggingoutthedata Whatarethebestsourcesofcustomerinsightandhowdoretailers evaluateandselectthem?AlexLawsonreports shows how customer data methods have changed from collecting shoppers into broad categories such as families or older shoppers to producing more targeted offers for each person. Methods of collecting shopper data vary from one retailer to another and most use a number of different ways to gather information. Retailersusedatatoevaluateproduct categories, conduct range reviews, identify opportunities for growth and understand how shoppers view their brand. As competition has become tougher across the high street, retailers have had to study customers closely to understand their shopping DNA, win spend and reward them appropriately. Purchasing panels, loyalty cards, direct mail and email, interviewing shoppers, brand image tracking and catchment area analysis are among the most commonly used tactics to gain insight. “ANYBODY CAN HAVE DATA BUT HOW YOU TURN THAT DATA INTO INSIGHT IS WHAT’S IMPORTANT” Andrew Mann, Sainsbury’s Loyalty cards are a key source of customer data CUSTOMER INSIGHT DATA SOURCES IV Retail Week December 2012
  5. 5. December 2012 Retail Week In association with while shoppers look at shelves, accom- panying consumers as they shop, and simply talking to staff in store. The retailer also has an internal communi- cations system, Tell Justin, enabling staff to escalate feedback and sugges- tions to chief executive Justin King to inform strategy. However, Mann warns that retailers must study all forms of data carefully and says it’s the analysis that matters. “Anybody can have data but how you turn that data into insight is what’s important to understand what customers want,” he says. Danielle Pinnington, managing director of customer insight specialist Shoppercentric, says taking a varied approach to selecting customer research strategies is vital. “We use THE IMPORTANCE OF SHOPPER INSIGHT Customer loyalty consultancy Uber UK’s new white paper on customer insight warns of the risks of not studying data. ■ You could lose customers If your customers’ attitudes are not consistent with your brand’s core values, there’s a high risk that customer loyalty will slacken, leaving them more likely to defect to competitors. ■ Don’t target the wrong people Ensure that loyalty programmes are relevant and the brands you link with are in the same catchment area as your customer base. Fantastic marketing in the Northeast of England isn’t much use if you operate in the South. ■ Don’t give customers what they don’t want Ensure you don’t alienate your customers by offering loyalty deals on products or at times which do not suit them. ■ Marketing on a whim Ensure a return on investment by studying key customer segments and attitudes carefully and making sure marketing material is well targeted. ■ Online surveys The cheapest of the research methods, online surveys generate a top-level view of the thoughts and feelings of consumers. The use of multiple choice questions means they’re perfect for generating strong statistics and gauging customer trends. ■ Focus groups Focus groups provide the opportunity for a face-to-face discussion with a representative sample of customers. This means that the more stat-led results of a survey can be coloured by lots of additional context. ■ Interviews Individual interviews are a great method of market research to capture in-depth customer feedback on a particular issue. Telephone interviews tend to be more cost effective, but interviews can also be performed face to face. SOURCE: UBER UK POSSIBLEINSIGHTSOURCES customer data. From eye tracking and filming in store to social media, retail- ers have a wealth of information that can be dissected and shared with suppliers online to allow retailers to rapidly digest data and inform new product development. Adrian Hado, head of insight and analytics at Avios, which has worked with retailers including John Lewis, Tesco and The White Company, says: “Social media is important both from a data gathering perspective and as a great resource. It’s essentially a free focus group and ultimately we would like it be a tool for users to advocate brands.” Ultimately, strategic customer research is crucial to make business decisions and gathering salient cus- tomer information will be key as eco- nomic concerns continue. Selecting the right method to fully understand both snap judgments and careful decisions made by shoppers could be the deci- sive factor in retaining and growing market share and sales. a whole suite of methodologies, as one thing we’ve learnt is that there are so manycontextualinfluencesonshopper research that no one approach can answer every client objective,” she says. “Most projects use at least two methodologies – whether quality and quantity, or in store and out of store.” She adds it’s crucial to tailor each project specifi- cally to a certain question. “It’s not just about knowing theobjectivesoftheresearch but understanding the con- text and the rationale for the research in the first place,” she says. Across the retail sector, technology has revolutionised ways of collecting “SOCIAL MEDIA IS IMPORTANT BOTH FROM A DATA GATHERING PERSPECTIVE AND AS A GREAT RESOURCE” Adrian Hado, Avios CCTV can identify what a shopper is browsing in store
  6. 6. customer insight social media s ocialmediahasinrecentyears become a central component in the digital strategies of mul- tichannel retailers. But it’s not always plain sailing. Retailers don’t always know how to best use the plat- forms and, for many, social is simply adding another layer of complexity into an already overwhelming pool of data. Simone Williams, ecommerce man- ager at womenswear retailer East, says workingouthowbesttousethedataisa challenge. “We don’t have the expertise in-house to harvest data from our social networks and this is an area I’m keen to exploreinthefutureasI’mquiteexcited by what we can learn about our cus- tomer through social,” she says. Jonathan Hudson, social and mobile lead at Shop Direct Group, says while the ability to capture social data is still quite new, it’s enabling the home shop- ping giant to identify important demo- graphic information such as age, locationandgender.“Thekindofthings we’re looking at are pioneering in a way – being able to access this new level of dataisreallyquiteincredible,becauseit just didn’t exist five years ago.” Used correctly, data captured viaplatformssuchasFacebook,Twitter, Pinterest, Google+, Instagram and Tumblr helps deepen customer engagement and drive sales. Tracy Yaverbaun, vertical business partner- ships, EMEA group director of retail at Facebook, says shopping is an “inher- ently social activity, and that retailers have more power than ever before to influence the process by building a direct relationship with consumers.” She adds that while Facebook can’t reveal personal details, it can provide aggregated data. In addition, it has launched a service called custom audience targeting, which allows retailers to bring their own customer information to Facebook and use it to target shoppers on the network. However, distilling social data and insight into a truly meaningful tool remains a challenge for many. “Even though retailers are increasingly talking about social media and have Twitter feeds or Facebook pages, not many are doing much about harnessing the valu- able data shared by consumers. The we look at what the sentiment around that campaign is, what kind of verbatim people are saying openly on Twitter and on Facebook”. He adds: “You get this information straight away. So it’s extremely fast and fresh data, which makes it very useful.” Hudson admits that Shop Direct is atthebeginningofitssocialdataproject, with “big plans in place” to use it to influence customer journeys – plans he’s keeping under wraps for now. Investing wisely Wolf says retailers should look beyond cost when deciding on whether to invest in such tools. “If retailers want to make the most of social media data, they will need a tool that stores and analyses data and allows brands to use insights to create opportunities and predict future behaviour. Such tools will always cost more than simple reactivetoolswithnomemoryorability to link to other data points that a retailer may have. But retailers should not focus on cost.” Martin Newman, chief executive of ecommerce specialist Practicology, agrees. “Given the potential ramifica- tions of not paying attention to what people are saying about your brand these tools can be the difference between success and failure.” Jon Stanesby, associate director of strategic services at digital marketing firm Responsys, says retailers need to understand how social platforms build relationships over time. “It’s that I think scares people, because it’s so much easier to look at content from a ‘views, clicks and pounds’ perspective. It’s almost seemingly unachievable to try and digest, review, and act upon all of this data.” Yaverbaun agrees and says in the case of Facebook, retailers need to look beyond the last click. “Not every cam- paign has the objective of driving ‘likes’ or sales. For example, a brand may set out to get customers’ views on future product ideas, which ultimately con- tributes to future success.” Measuring outcomes should be more qualitative than quantitative – but as time goes on, retailersaregettingbetteratunderstand- ing such outcomes. ThepathtosocialsuccessSocial media platforms offer a wealth of consumer insight, but turning that data into an effective brand building and sales tool remains a challenge. James Knowles reports challenge is being able to cut through and filter the noise, and that is often where many of them fall short,” says Alex Fovargue, retail specialist at soft- ware provider SAS UK and Ireland. Leading the way Jonathan Wolf, director of agency products at social data, software and analytics firm Bazaarvoice, says the problem is that there is no structure to the conversations happening on social platforms and urges retailers to directly engage by starting and leading conversations. Fovargue advises analysing the context of conversations and separating the data into key themes such as discussions on brand, specific products or promotion strategy. Given the scale of conversations happening in the social realm, it is worth investing in social media analytics tools to help decipher the data. Shop Direct uses social media monitoring tool Radian6. Hudson says “when an ad campaign launches “retaILers have more power to InfLuence the process by buILdIng a dIrect reLatIonshIp wIth consumers” Tracy Yaverbaun, Facebook Social platforms help engage customers and drive sales In association with VI retail week December 2012
  7. 7. click rate { { 5.6% UK average 4% 100,000 16 -17 year olds 700,000UCAS applicants It’s a market worth a year We’ve seen that by understanding the subtle differences in students’ buying habits, across different product groups, marketers are able to tailor their customer contact. Traditional assumptions and perceptions of student behaviour have been challenged by research. Who’d have guessed that 50% of students still regularly buy newspapers or that only 12% buy clothes online.* It’s not rocket science then that segmenting and targeting data to a detailed level will ensure your message gets right where you want it. But bringing that to life is something entirely different. Get it right and you have the best chance of establishing a lasting and very profitable relationship. Get it wrong.... well, let’s not think about that. Consider a national retailer, wanting to increase student spend in their local stores. Add in an unrivalled database sitting behind a targeted, segmented email campaign. Getting the campaign right meant sales up 10% year-on-year and the best performing student store on their student shopping day. Getting information into the hands of young people can be hard – so making it relevant to them really helps – imagine how much opportunity a 35% open rate gives you. * The Student Lifestyle Survey, conducted by UCAS Media, questioned applicants applying to begin their higher education study. 24,000 responses were received. * Source – Silverpop, July 2012 (average across our student, pre-applicant and unplaced applicant database) We help our clients create and deliver brilliantly simple email and online campaigns, targeted at students. We talk to students all year round. We’re UCAS Media. Let us show you how... *
  8. 8. T he struggles of the retail industry are ever present in the national papers as the industry struggles to cope with the economic downturn. While reduced consumer expenditure was inevitable, retailers have on the whole failed to embrace the most effective weapon against recession – self-improvement. It is a common belief that British retailers give worse customer service than many overseas counterparts, particularly in the US – a country with a reputation for ‘service with a smile’. However, it is less well known that quality customer service actually results in substantially higher spend in store. Recent SMG research found that average spend jumps 39% from £23.36 per person, to £32.47, when the customer receives positive assistance in store. Based on the responses of 100,000 plus UK customers, SMG has created the Customer Satisfaction Index (CSI) to measure customer experience in terms of friendliness of staff, availability of assistance and problem resolution to identify its impact on sales and absolute loyalty. The SMG Customer Satisfaction Index in the UK has a score of 6.1 (out of a possible 10.) Based on the CSI, SMG has found that British retailers are missing out on as much as £45.38bn each year in sales due to poor customer service. Retailers that master customer service are likely to attract a bigger portion of the ‘floating pound’ in sales over poorer performing competitors. The floating pound is calculated by applying the UK’s CSI score of 6.1 to UK retail’s total sales in 2011 of £303bn. Reaching the floating pound By analysing what UK consumers value in terms of customer service, retailers can set about improving the in-store experience. SMG makes the following recommendations to help retailers harness more of the floating pound: • Interaction –According to the research, the additional 39% of customer spend stems from successful in-store staff engagement. This can be done by encouraging staff to spend more time assisting customers, employing a friendly approach and using open-ended questions. • Sign of the times – Customer satisfaction should be maintained throughout the day. customersatisfaction holds the key to retailRetailers that provide excellent customer service are likely to attract the ‘floating pound’ in sales, according to the SMG Customer Satisfaction Index SMG Customer Satisfaction Index UK Retail & Restaurants 2011 0 £5 £10 £15 £20 £25 £30 £35 0 £5 £10 £15 £20 £25 £30 £35 Urban areas are offering a reduced customer experience. SMG Customer Satisfaction Index in the UK rates 6.1 out of a possible 10 Customers who receive good service spend 39% more No Yes Were You Greeted When Entering? Average UK customer spend £26.63 £30.28 £23.36 £32.47 No Yes Did You Receive Assistance? Average UK customer spend UK retailers missing out on £45b due to poor customer service Unsatisfied customers offer potential sales growth of up to 15% Customer Satisfaction Infographic_Customer Satisfaction Infographic 11/06/2012 13:14 Page 1 SMG Customer Satisfaction Index 2011 At present UK retailers provide the best service before 11am, when friendliness and availability of staff are at its highest, before decreasing during the afternoon. Satisfaction is also shown to dip at weekends – when providing excellent service is most crucial as more shoppers hit the high street. • Consistency is king – SMG figures show the worst place in the UK for customer service is Worcestershire, Dorset and Berkshire, while the best places are Herefordshire, Northumberland and East Yorkshire. It is essential that quality customer service is maintained across all brand outlets to ensure a consistent and enjoyable consumer experience. Raising a customer’s expectations one week, only to disappoint the next, can be more damaging than providing average service all the time. A poor experience in a London store will result in the shopper avoiding the same brand when in Manchester. Most causes of customer dissatisfaction are easy to remedy. In many cases it is simply the need for a smile, availability of help and competent product knowledge so problems can be resolved. Happier customers will lead to higher spend, making life much easier for retailers in the difficult economic conditions. Jeremy Michael, managing director, Service Management Group (SMG) For more in-depth analysis of the customer satisfaction report, or to obtain a full copy of the whitepaper, please email, or call 020 3463 0700. About SMG Service Management Group (SMG) is a forward-thinking research agency conducting store-level, ongoing customer experience measurement and analysis in more than 90,000 locations worldwide. SMG integrates this customer research into actionable business intelligence and service improvement tools for retail, restaurant and service-based companies, linking results to financial performance. AdveRtiSinG feAtuRe
  9. 9. 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 1 0 0 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 1 1 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 0 0 0 0 0 0 0 0 1 0 0 1 0 0 1 0 0 0 1 0 0 1 0 1 0 0 0 0 1 1 1 0 1 0000 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 0 0 0 0 0000 0 0000 0 1 0 0 1 0 0 1 0 0 0 1 0 0 1 0 1 0 0 0 0 1 1 1 0000 1 0000 1 0 1 0 1 0 1 0 1 0 1 0 1010 0 1 0 0 0 0 0 0 0 0 0 1 0 0 1 0 0 1 0 0 0 1 0 0 1 0 111 0000 000 000 0 1 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 0 0 0 0 0 0 0 0 1 0 0 1 0 0 1 0 0 0 1 0 0 1 0 1 0 0 0 0 1 1 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 0 0 0 0 0 0 0 0 1 0 0 1 0 0 1 0 0 0 1 0 0 1 0 1 0 0 0 0 1 1 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 0 0 0 0 0 0 0 0 1 0 0 1 0 0 1 0 0 0 1 0 0 1 0 1 0 0 0 0 1 1 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 0 0 0 0 0 0 0 0 1 0 0 1 0 0 1 0 0 0 1 0 0 1 0 1 0 0 0 0 1 1 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 0 0 0 0 0 0 0 0 1 0 0 1 0 0 1 0 0 0 1 0 0 1 0 1 0 0 0 0 1 1 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 0 0 0 0 0 0 0 0 1 0 0 1 0 0 1 0 0000 0 1 0 0 1 0 1 0 0 0 0 1 1 1 0 1 0 1 0 1 0000 1 0000 1 0000 1 0000 1 0 1 0 1 0 0 0 0 0 0 0 0 0 1 0 0 1 0000 0 1010 0 0000 0000 1010 0 0 1 0 1 0 0 0 0 1 1 1 0 1 0 1 0 1 0 0 1 0 1 0 0 0 0 0 0 0 0 0 1 0 0 1 0 0 1 111 111 111 000 111 000 0 1 0 1 0 1 0000 1010 0000 0000100010 0000 0000 0101 0000 0000 01011011110111 0000100010 1111111111 0000000000 01011011110111 0100001000 01011011110111 0101 1010 0101 0000 0101 1 0 0000000000 0100001000 0000000000 0100001000 0000000000 0000100010 0000 0000 1111 1010 1 0 1111 0000 1111 0101 0100001000 0000100010 0100001000 01011011110111 1 0 1 0 1 0 1 0000000 0101010 0001010101 0000100010 000 000 0000000 000 000 0000 000 010 0000 0101 010 0000 01010001010101 0100101010 0000100010 0101 0000 1111 0000 0101 1010 0101 1010 0101 01010001010101 0000000000 01010001010101 010 010 010 000 1010 0000 1010 0000 1111111111 01010001010101 111 0000100010 1010 0000 1111011101 0101 1010 0101 1010 0000100010 1111011101 0101 0000000000 0101101 0000000000 01010001010101 0000 0000 0 0 1 0000 0101 1 0 000 111 000 0 0 1 0 0 1 0 1 0 0101 000 0101 111 010 010 0 1 0 1 0 1 0 1 000 010 000 010 000 010 0 1 0 1 0 0 0 000 0101 000 0 0 0 1 0 1 0 0 1 0 000 000 010 0 0 1 0 1 0 0 0 0101 010 010 111 000 111 000 1 0 1 0 1 0 1 0 1 000 111 000 1 0 1 0 0 0 0 000 0101 0 0 0 1 0 0 1 0 000 111 000 0101 0000000000 111 0 0000 1 0000 1 0000 0 0000 0000 0100001000 1111011101 1111 0000 1 0 1010 0101 1010 0101 1010 0000 1 0000 0100001000 01011011110111 0100001000 01011011110111 0100001000 01011011110111 0100001000 0101 0000 0101 0000 0101 0 0 0 0000 0100001000 0000000000 0000000000 0100001000 0000 0000 1111 0000 0101 0000 1010 0000 000 1111111111 0000000000 1111 0000 0101 0000 0101 1010 1010 1010 0000 11111111111 11111111111 11111111111 00000000000 11111111111 00000000000 1111 0000 1111 0000 1111 0000000 1111111 0000000 1111 0000 1111 0000 1111 0101 1010 0101 0000 0101 0000 00000000 0000 0 0 0 1010 0 0 1 0 0 1 0 0 0 1 0 0 1 0 1 0 0 0 0 1 1 1 0 1 0 1010 0000 1 0 1 0 1 0 1 0 1010 0 1010 0 1010 00000000000000000000000 00000100010010101000101010 00000000000101010101010101 00000000010001000100010 00000000000 00000000000 00000000000000000000000 00000000000 00000000000 10100001000 00000000000 00000100010 10100001000 00001010101 0000 1010 0101 0000 01011110111 1010 00000000000 00000000000 1010 00001010100010010101000101010 1111 01010001010101 00000000000 01011110111 00000000000 1111 1010 1111 00000100010 1111 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 10001000 01110111 0000 00000000 00001010101 00000000 00001010101 0000 0000 0000 1010 0101 0000 1 0 0 1 0 0 0 1 0000000 00000001010101 1010111 0101000 10100001000 00001110111 01010000000 0000000 0101000 1010111 1010010 1010010 0000101 1111010 0101101 1111010 0000 1111 0000 1111 0101 1010 0101 1010 0101 1010 0000 1010 0000 1010 0000 0000 0000 0101 0 0 0 0000 00000000 1010 00000000 0000 1010 0000 0 1 0 0 0000 1010 0 0 1 0 1111 0000 0000 0101 00000000 10001000 10100101010 1010 0000 1111 0000 1 0101 1010 0000 1010 0 1 0 1 0 1 0 1 0 1 0 0 0 0 0 0 0 0 0 1010 0000 0000 1111 0000 0000 1010 0000 0101 0101 1111 0000 0101 1010 0101 1010 01010001010101 0000000000000000000000000 01011110111 0000000000000000000000000 11101010111011011101 0100001000000000010000000 11111111111 0000000000000 0100100001000 0000101 0100100001000 0000101 0100100001000 0000000000000 0100100001000 1 0 1 0101 10100101010 01110111 1111 0000 1111 0000 0101 0000 0101 0000 0101 0000 0101 0000 1 0 0 1 0 0 1 0 0 0 1 0 0 1 0 1 0 0 0 0 1 1 1 0 1 00000000 1111111111111111111 0000000000000000000 11111111111 0000 1111 0000 1111 00000000000 11111011101 00000000000 11111011101 00000100010 10100101010 0000 1010 0000 customer insight Big Data i f you ask people to define the term‘bigdata’,you’llgetdifferent answers. This might be because the term is still relatively new. Big data has “gained widespread use in the last three or four years”, says Darren Vengroff, chief scientist at ecommerce personalisation company RichRelevance. “It’s a buzzword rather than a well- defined concept,” says Michael Ross, director of ecommerce adviser eCom- mera.However,itboilsdowntoretailers nowbeingabletoaccessmoredatathan ever before, and it is about using that information to improve different areas of the business. The emergence of big data is partly a consequence of the growth of online retail. Online shoppers generate large amounts of information about them- selves and how they shop. Graham Cooke, founder and chief executive While all this information could leave retailers feeling overwhelmed, Gordon says viewing big data in terms of volume is a mistake. It’s not a case of analysing as much data as possible. He warns against “analysis for the sake of analysis”, which can be “risky, costly, and often fruitless”. “If people take it to mean ‘very large’ that can be quite costly,” says Gordon. “When we talk about big data we mean enhanced data not just large data. Big data doesn’t automatically deliver big value. This is about building a unique data set, rather than a big data set. It needs to be high quality rather than big.” big data pioneers “Google and Amazon were doing big data projects back in 2005/6,” says Cooke. “A lot of big data techniques used today were produced at Google.” Whatisbigdata?The technology industry loves a buzzword, and big data is a favourite. But what does it mean, is it just marketing hype, and what services can it help retailers provide? Claire Burke reports ➤ of technology solutions company QuBit, says big data has also resulted fromcloudcomputing,whichhasmade itcheapertostorehugevolumesofdata. “Cloud computing has given access to thousands of servers to process and store data. The computing power and cheaper storage means we now collect lots of data.” He adds: “Over time as it becomes cheaper and cheaper to do it, retailers have power to access information.” So when the term big data is used, what type of information is being referred to? Jason Gordon, a customer analytics partner at Deloitte, says big dataincludesretailers’traditional,inter- nal data such as transaction details, as well as data from social media, data which has been proactively sourced to shed light on a certain area, and open data, which are data sets released by the Government. “iT’s a buZZWoRd RaTheR Than a Well-deFined ConCePT” Michael Ross, eCommera December 2012 Retail Week only 31%of retail organisations in the UK have adopted big data analytics SOURCE: SAS of which would be generated through better customer intelligence £11bn The economic benefit to the UK retail industry £32bn by 2016 7,000new retail jobs big data could produce In association with
  10. 10. customer insight Big Data Today more retailers are getting in on the act. “Historically it’s been the preserve of the grocers, they have the most mature loyalty cards,” says Gordon. “But some of the biggest changes are coming from the apparel side of retail. They’re starting to reap some really strong rewards from it.” QuBit has worked with companies such as lingerie retailer Bravissimo using big data. By analysing data on sales transactions made via different devices it was able to draw some inter- esting conclusions. For example, cus- tomers accessing Bravissimo’s website on a smaller screen were less likely to make purchases. Cooke explains: “They were missing the size guide tool onasmallerscreen.Welookedatmouse movement, conversion rate, and found there was a relationship between the screen size and conversion rate. We made the size guide more prominent. It increased their sales by £2m a year.” Qubit has also worked with, enabling it to gain greater insight into the customer purchase journey. “One of the biggest challenges in marketing is where you can attribute value,” says Cooke. While retailers often focus on the site visit where the customer makes a purchase, they might have visited four more times before that and these visits are worth analysing as well. Data analyt- ics were applied to every visit and con- sequently the company increased its budget on generic key words after find- ing that certain terms had high returns on investment. Personalising the experience Big data can also be used to make tar- geted marketing a lot more effective. Gordon explains: “The question is not ‘I’ve got a voucher, who should I send it to?’ It’s ‘I’ve got a customer, what can I put together that is most compelling for them?’ It’s about having enough under- standing of a customer for that different wayoftargeting.Useothersetsofdatato fill in gaps in your knowledge. Nothing turns a customer off like receiving irrel- evant information.” It can also give a clearer picture of how a business is operating across all its channels. For example, it can be used to evaluate whether an online marketing campaign has been successful in increasing store sales, says Vengroff, who previously worked at Amazon. “You might promote it [the campaign] online but people want to see the prod- uct in the shop before they purchase. It’s bringing all the data together in one place. When you’re deciding which of 10 campaigns you should run next you can make an informed decision.” This ability to make more informed decisions is at the heart of big data. Ross says: “For retailers there are lots of decisions to make which require data, it’s about making better decisions. There are also more micro decisions to make.” Big data offers retailers greater insight into their customers’ shopping behaviour, and enables them to measure and evaluate their business in ways they couldn’t previously. In the intro- duction to McKinsey’s report, Big Data: The Next Frontier for Innovation, Competition and Productivity, pub- lished last year, researchers state: “We estimate that a retailer using big data to the full has the potential to increase its operating margin by more than 60%.” Tempting as it might be to delve straight in, Gordon has a word of warning: “For those businesses that aren’t already doing this, my advice is start with something sensible and contained where value can be proven.” Retailers using big data need to have a clear idea of what they want from it – the best approach is to start with a commercial issue and move forward from that point. ➤ multichannel makes the most of Big Data FrankSendler,onlinemarketing manageratCrewClothing,said theretailerstartedusingbigdata techniquesaboutayearand ahalfago. “Asamultichannelbusinesswe wantasmuchinsightaspossible intohowcustomersbehaveforour marketingstrategy,”saysSendler. CrewClothingbeganbyusingatool builtin-houseandGoogleAnalytics. Later,itstartedworkingwithQuBit. “Whencustomersorderoverthe telephone,orviathewebsite,the challengeistoputthemtogether,to matchthemupandmakethemost senseoutofthatdata,”hesays. “Customerdataincludeswhat peoplearebuying,when,fromwhat promotion,inwhatcontext.Collecting dataisalongprocess.” SendlersaysCrewwantedtofind outhowshopperswhoreceivedits catalogueswerepurchasingproducts. Wasitoverthephone,instore,orvia thewebsite? Theretaileranalysedthedataand wassurprisedbytheresults. “Manyofourcustomerssimplytake acatalogueintothestoreandbuythe productinthestore,”saysSendler. “It’susefulbecauseweknowwiththe catalogueswecansendthemoutand theywillstillconvert.Wehaveamuch betterunderstandingofthecontext betweenstoresandthecatalogue. Thecustomerisreallyjustswapping betweenthechannels.” Sendlersaysbigdatatechniques areparticularlyusefulformultichannel retailers:“Itgivesclarityandinsight forstrategy,”heexplains. X Retail Week December 2012 “This is abouT building a unique daTa seT, RaTheR Than a big daTa seT” JasonGordon,Deloitte In association with
  11. 11. S uccessful retailers put the customer at the heart of their brand. But in a marketplace where retailers and shoppers alike are distracted by price wars, the increasing influence of online and a smaller pot of disposable income, it can be difficult to focus on branding. This year big names such as Peacocks and Clinton Cards have collapsed into administration, in part because their proposition became confused or was no longer relevant to the market – despite huge brand awareness. Nick Coates, research director of co- creation agency Promise, says more workisbeingdonetoconnectcustomers to brands than was previously the case: “Retailers are doing a lot more people- watchingandtheyaregettingcustomers involved to help develop new products and services at earlier stages.” Most retailers also use transactional data to understand what and where cus- tomers are buying and how much they are spending in store or online. “Whatishappeningwithretailclients is based on expertise and experience andalotofreadingaroundthemarket, but not a lot of speaking to the cus- tomer,” says Paul Griffiths, commer- cial director of retail research firm Simpson Carpenter. Griffiths believes it is necessary to extend the research to actually speak to consumers and ask why they are shopping in a certain way. Marketing director Tim Fairs says: “We found there was a specific type of customer that comprised the majority of the market but they were only buying a fraction of their goods in Clintons, so then we had to find out why they weren’t spending with Clintons and what differentiated us from our rivals like Paperchase and Scribble.” Consumergroupswereputtogetherto find out why they shopped at particular retailers.TheresultstaughtClintonsthat customers wanted to be greeted as they came into store and offered recommen- dationsandideasbystaffaswellasafast transactional experience. But Coates says having too much cus- tomer insight can be a hindrance. “If we believedwhateverycustomersaidabout ourbrandwewouldputourselvesoutof business tomorrow.” Conversations and surveys aren’t the quickest ways to get insight though. Apple is one of the most successful brands in the world, but it is known for not investing in customer focus groups or surveys. Instead, it analyses data and information in order to understand what the consumer will want to buy from them in the future – customer responses can also quickly become out of date. Fairs agrees not everything can be decided by customers. Clintons’ recent brand colour change to red from orange was a management decision. “It works well to keep decisions of that nature to a very small group,” he explains. As technology develops, so do the channels of communication. Social networking allows customers to be much more vocal about their shopping experience and retailers are able to contact shoppers more easily, showcas- ing their brand’s values. Mobile apps also offer greater access to the customer journey in store. Sainsbury’sistestinganappthatenables customers to scan items in store and pay at the till without unloading their shop- ping. The technology behind the app will allow the grocer to collect large amounts of data on shopping habits. Fairs says: “The beauty of digital insightisyougetresultsalmostinstanta- neously, while with focus groups it can take up to six weeks to debrief, which could be too late. A lot of what consum- ers say is claimed and not actual.” In a world where there are so many ways to communicate, the relationship between retailers and customers should become closer than ever before if a brand is to stay truly relevant. And with so many ways to communicate with customers, there are no excuses. Howcustomerdata canshapeabrand Consumer insight can help improve a brand. Tiffany Holland finds out what retailers are doing to connect with their customers “It brings the customer-centric approach back into the retailer. If you don‘thavecustomerinsight,you’redriv- ing blind,” he adds. He says WHSmith is one retailer that needs to clarify its offer through cus- tomer interaction. “I think if you asked consumers what they thought of WHSmith, they don’t really know what they do anymore,” he says. “Their offer in store is completely bewildering.” Knowledge is power Coatessaysthepointofcustomerinsight is to be informed about people’s behav- iour rather than making assumptions: “It’s about being smart about what you do, keeping on top of trends and not get- ting distracted from what you do best and adapting to the modern world.” Until 18 months ago, Clinton Cards only took feedback from suppliers, which resulted in biased responses. When profits and sales started to slip andcompetitioninthemarketincreased from online brands such as Moonpig and Funky Pigeon and high street brands such as Card Factory, Clintons commissioned a project on the UK card market. Theresearchcametoolateforthepre- vious owners, and the business col- lapsedintoadministrationinMay.Butit has contributed to Clintons’ recent rebrand after it was bought out of administration by US greetings card giant American Greetings in June. “RetaileRs aRe doing a lot moRe people- watching and aRe getting customeRs involved” Nick Coates, Promise cuStomer inSight BrandS XII Retail week December 2012 In association with Clintonsusedcustomer datatohelpinformits recentrebrand
  12. 12. WHY NOT LET THE PEOPLE WHO RUN NECTAR RUN YOUR LOYALTY PROGRAMME? For an initial conversation, call Will Shuckburgh on + 44 20 7152 4806 or write to him at YOUR BUSINESS OUR INSIGHT BUSINESS RESULTS
  13. 13. S martphones are a vital part of customers’ cross-channel shopping, and are used for both buying and researching. In fact, 58% of smartphone users now use their device to compare prices, according to user experience design agency Foolproof’s Going Mobile study. Omid Rezvani, director of mobile commerce solutions at consultancy eCommera, says: “Retailers need to look at the bigger picture, we can do a lot more than just selling on mobile. We need to use the device as it is intended – for two-way communication. “It’s the best way of knowing some- one’s shopping habits and behaviour. Communicating via mobile is like hang- ing out with our customers.” Harnessing mobile data helps retail- ersfindoutwhatshoppersaresearching for, how long they’re browsing for, what’s driving their purchasing deci- sions and, particularly for multichannel retailers, where they are shopping. If retailers can tap into a shopper’s location, they can trigger real-time offers to entice them into nearby stores, or encourage them to buy while they are there. Sharing reaps rewards However, many customers feel uncom- fortable sharing their whereabouts with retailers. Only 8% of mobile phone users have shared their locations, rising to 15.2% of smartphone users, accord- ing to technology consultancy and researcher Gartner. Toenticeconsumerstosharepersonal details such as location, retailers should offer incentives. Marks & Spencer, Walgreens and American Apparel, for example, have tried schemes on apps to offer customers coupons and rewards when they share their location. Rezvani says retailers should encour- age downloads of their apps rather than pointing customers to their mobile-ena- bled website because it develops a more meaningful relationship. Hesays:“Peopleusewebsitesontheir phone to discover product, while using an app cultivates loyalty to a brand.” Rezvani says enticements such as discounts, access to exclusive events or the latest designs could be offered use mobile devices to cultivate loyalty. “Small things, like remembering someone’s birthday and sending an offer relating to their birthday can create loyalty,” says Rezvani. A richer experience Determining locations is not the only thing apps can do. They also allow retailers to combine the physical and virtual worlds. Features such as scan- ning capabilities allow customers to access richer information about prod- ucts, add items to wish lists and go back home to ask the advice of friends and family about a product before purchas- ing on their mobile. The real-time location benefits of mobile browsing might at first appear diminished for pure-plays, who cannot direct customers into nearby stores. But Shop Direct new data and online target- ing manager Matthew Doubleday says that might not always be the case, and there are still plenty of benefits inherent in the mobile device for etailers. He says location data could help make delivery services more conven- ient.“We’renotworkingonthisyetbutI cansee‘delivertothisdevice’asadeliv- ery option so we can get their party dresses directly to them,” he says. Doubleday also envisages pure-plays providing shoppers with specific pro- motions based on where customers are. He says: “If we can see that someone is inBluewaterwecouldsendthemames- sage saying they can enjoy cheaper prices or can buy on credit with us through push notifications.” Rezvani says the amount of information harnessed will only increase. The devices will continue to become smarter, and proximity to stores and even products in store can be pinpointed. Retailers could be able to send real-time, context-aware offers based on which products the customer is near to. As technology improves and m-com- merce becomes more ubiquitous, mobile will become a retailer’s greatest insight into their consumer. Being present on a mobile phone, through app or website, means they are always with their consumer wherever they are shopping. Mobile’sroleininsightMobile is a growing sales channel, but its potential doesn’t end there. Phones also open up a treasure chest of data for retailers on their customers. Gemma Goldfingle reports to customers to encourage them to download apps. Pushnotificationsarethebestmethod of maintaining dialogue with customers according to Rezvani, but retailers must be careful not to overuse them. Hesays:“Communicatingwithsome- one on their phone is a very personal thing. It’s more intrusive than an email campaign. If people think it is becoming too personal and annoying, they simply delete the app.” Retailers should tailor their commu- nication using information on what customers have shopped for previously. Information such as when a shopper dropped out of the purchase can also be crucial as it may offer insight into what is driving buying decisions and can stimulate real-time offers. Along with active marketing enticing shoppers to buy, retailers should also “mobile iS the beSt wAy of knowing Someone’S Shopping hAbitS And behAviour” Omid Rezvani, eCommera cuStomer inSight mobile XIV retail week December 2012 In association with Retailerscanlocateshoppersandenticethemintonearbystoresviamobile
  14. 14. If so, you are not alone. Informatica’s Master Data Management (MDM) solution delivers a single, authoritative, and trustworthy view of your critical data assets. Learn why hundreds of retail companies and other organisations rely on Informatica MDM to: • Deliver new products to market faster • Streamline operations to reduce costs • Demonstrate compliance with standards and regulations Find demos, videos, and whitepapers at © 2012 Informatica Corporation. All rights reserved Are you struggling to get a complete and accurate view of your data so that it works for the business?
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