Big data analytics across the retail enterprise.
By Robin Bevan, Director of Locations & Analytics at Javelin Group.
As retailing moves at an increasing velocity towards omni-channel, the need to understand the customer across channels has never been greater. Consumer interaction with a retail brand now spans stores, ecommerce, mobile and social media. As the number of multi-channel interactions increases (with the volume, the velocity and the variety of data sources all expanding rapidly), so customer expectations of relevance and personalisation is also growing.
Driving actionable customer insight through data analytics
The need to drive actionable customer insight is one facet of data analytics that can help successful retail brands to deliver differentiation whilst improving profitability (both through top-line growth and more effective use of corporate marketing spend). The last 12 months have seen a marked increase in the number of books, seminars and conferences about ‘Big Data’ yet many retail brands still haven’t even effectively used the ‘small data’ which already flows through the organisation which can reveal all manner of actionable insights and behaviours.
By organising and mining the available data effectively (be it ‘big’ or small), retailers can deliver top-line sales uplifts of up to 3% – equating to an average of more than £50 million each for the top 150 UK retailers – through a combination of better targeting and more personalised communications combined with improvements to range and assortment planning and a reduction in wasted marketing effort. This can be achieved simply by better mining of the data that already exists – without the need to introduce new loyalty schemes, contextual marketing platforms and consumer surveys.
Recommendations for improving customer data insight
Whilst there is widespread acceptance that understanding more about customers is a good thing, many retailers struggle to know how to start. Below are a number of our recommendations for improving customer insight and making the organisation more customer-centric:
- Use what you already have – understand, organise and analyse the data which already exists and start to use it. Circulate the results internally to sway the naysayers and ensure decisions are made on fact not on ‘gut feel’.
- Critically, assess what additional data could be gathered and rank against likely positive effect on ROI and ease of collection / analysis. Simplicity is key – start small and make these new data sources work for you. Then gradually increase the complexity. (For example, one high street retailer simply created two versions of their regular email, segmented only by gender.)
- Focus on customers, not internal silos. Try to build a complete view of a customer’s interactions with your brand across all channels. Resist the temptation to think only about one channel – try to identify customers who shop in multiple channels (they’re much more valuable to you). Use their online browsing behaviour as a strong indicator of preferences and market to those preferences.
- Don’t allow analysis to take over – there’s no point having 50 customer segments if you are unable to do anything different for each of them. Better to have five distinct segments and provide differentiated treatments for each of them and use marketing resources to push customers up through the segmentation chain.
- Don’t allow technology to take over – technology is an enabler and should serve rather than dictate the vision and ambitions of the organisation. Make sure that discussion and planning for customer insight doesn’t start with technology selection. Use nimble insight tools (such as Alteryx and Tableau) which are ideal not only for the collation of data and supporting analytics, but also for the visualisation and communication of insight.
- Move to make your organisation customer-centric rather than channel-centric. Customers don’t think in channels – they just buy from your brand, however it is presented. Remove barriers to a ‘complete view of the customer’ and think about how you can more effectively engage your customers.
Retailer benefits of customer insight
There are direct benefits from making effective use of the data which already exists within the organisation. These benefits vary according to sector and the type of data available.
Customers are increasingly savvy, recognising that their personal data has value and becoming more comfortable to give this data to organisations if they believe they will use it wisely – both in terms of stewardship and value creation. Those brands which are able to give customers multiple ways of shopping with them and yet still recognise them across these multiple channels will continue to thrive. The nature of customer insight might be changing, but its value to successful retailers will only grow.
First published in: Essential Retail
For further information, please contact Robin Bevan.
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