Big data allows retailers and brands to target better and connect deeper with new and existing customers.
It allows them to create the content shoppers want to engage with by making content more personal. A Yahoo survey found: “Compared to general ads, many consumers find personalized ads to be more engaging (54 percent), educational (52 percent), time-saving (49 percent) and memorable (45 percent).” Informed by big data, holiday promotions can address all of these areas of interest and concern.
There are more earnings up for grab this year. In 2013, holiday retail sales climbed 3.5 percent and holiday ecommerce sales grew 9.3 percent. Early indications also suggest another rise in 2014, particularly for businesses marketing to middle income households. However, holiday shoppers will be bombarded by more advertising than ever and are even complaining about “discount fatigue.” It is no longer enough for retailers and brands to leak promotions or slash prices; shoppers want something personal.
Here are three things that big data can do for your brand if it’s at play in your holiday sales plan this year.
1) Big Data Tells You Everything You need To Know About Your Consumer
Big data allows brands to better understand their customers at macro and micro levels — and during the holidays this could not be more important to crafting personalized marketing messages. However, brands must start by collecting good data to work with — from site traffic, checkout online or in-store, loyalty programs and other points of contact with the customer.
“Going forward, the companies that have the best data will win,” Duct Tape Marketing author John Jantsch told Nielsen. “…Until you can understand precisely what your customer wants, what they don’t want, how they want it and when they want it, you’ll be left to guess — and guessing is a very, very expensive sport.”
Lowe’s delivers a great deal of personal relevance to their customers by collecting the right data across channels — online and offline — then using contextual analysis to surface additional product recommendations and drive more sales. Customers who’ve recently purchased kitchen appliances may receive a follow-up communication featuring other brand products or remodeling ideas when they enter an email at checkout. It’s a great way to expose them to additional content based on what a consumer has explicitly expressed interest in through their purchasing behavior.
Retailers and brands can also easily partner with third parties to deliver ads informed by behavioral and demographic insights as well as real-time conversations being had about them. One successful example can be seen in the program IKEA piloted with Yahoo! and Acxiom to track the impact of online marketing activities to in-store sales. By matching verified Yahoo! members with IKEA’s own customer data, the retailer was not only able to create more nuanced audience profiles for targeted advertising, but they could also track the success of those ads and their profiling choices directly against in-store sales.
Customers don’t seem to mind this more intimate ad service model either, as long as they are not served irrelevant ads that disrupt their native user experience and can opt in or out. “There’s no question that consumers are inviting us to connect with them,” says Advertising Research Foundation CEO Gayle Fuguitt. “They’re opting in at greater rates than ever.”
For customers who want more personal ad experiences this holiday, big data offers the source material brands and retailers need.
2) Big Data Builds A Stronger Organization
Many experts, including the McKinsey Global Institute, warn of a massive skills gap opening in the next several years. Hundreds of thousands of data-centric jobs will exist, but there may not be the data-savvy individuals available to fill them. Brands and retailers should use the potential revenue opportunity presented by the holiday season to hire new and train existing employees to effectively harness big data before the entire digital landscape demands it.
Embracing the power of big data as an organization also provides an opportunity to break down internal silos, a perennial issue for all marketers. To mine and implement personal insights effectively from big data, marketers must work across departments. Establishing cross-departmental collaborative processes during the holiday season can head off any future silo-ing roadblocks retailers may face.
Lastly, if a retailer has brick-and-mortar locations, they can leverage data to make their stores run more effectively. For example, not only is Lowe’s powering contextual marketing, but they also dissect in-store traffic pattern data to help anticipate staffing needs during busy seasons like the winter holidays.
3) Big Data Creates Better Experiences
While C-level buy-in and a lack of resources can be an issue for those companies wanting to capitalize on big data this holiday, the primary challenge has to do with extracting value from raw numbers. This problem ties back to the previous need to build a stronger organization (where big data matters), but also to a need to seek out expert partners who can help build better campaigns. Once those obstacles are overcome, the results of creating better performing experiences can be truly spectacular.
Ashley Furniture is using customer data to revamp both its online and in-store experiences. Once a customer arrives in an Ashley showroom, a sales rep can pull up their personalized profile information to offer exclusive, customized deals based on what the shopper has already browsed online. It’s a powerful incentive for customers to become more engaged with the brand digitally while also driving them in-store to make a purchase.
“It’ll give us a completely different view of the customer and allow her to engage with us much differently than she does today, primarily through a more enriched experience online [and] a more personalized experience online,” explained Ashley’s EVP and CIO Bob White.
Putting Big Data In Action This Holiday
For the holidays, brands and retailers need to act similarly to Ashley Furniture and reflect on how their in-store experiences are not only complementary to those they have pushed out digitally, but offer something special to the shopper who comes in-store. Can they pick up digital offers in-store? Can they get expanded product information by scanning a bar code with their phone? How easy is it for them to redeem digital coupons? The experiences do not have to be complex, but they should offer accurate, coherent messaging that helps the customer during a busy time of year.
Additionally, while today’s holiday shoppers are ready to spend, retailers and brands must remember that it is personalized messaging that cuts through the blizzard of promotional clutter. The easiest way to build personalized messaging is to collect, mine and implement insights from big data. It is a surefire way to give holiday promotions more impact and close out 2014 on a fiscal high note.