Big Data = Big Opportunities
By Bob Johns, associate editor
I was recently walking through a mall in Orlando because, according to my wife and daughters, you apparently have to go shopping as soon as you reach your vacation destination. The mall was only a few years old and was bright and open with comfortable seating areas, multimedia displays with music and video, and a concierge desk with a helpful, friendly staff. Overall, it was a beautiful design and very inviting to the customer.
But what really caught my attention was my cellphone. As soon as I got close to the entrance, I began to get messages regarding “Kicks” I could earn, coupons for a multitude of stores, and rewards from foursquare. Each ad was tailored to the things I had recently purchased, from shorts and tee’s for young girls to catcher’s gear for a 12-year-old-boy. Of course, very few of the coupons were for stores I like, due to the fact that once you have several kids, you don’t get to actually shop for yourself. My wife was receiving similar notices from the stores at which she regularly shops, and many offered suggestions for items that would go with, or were similar to, the purchases she made last week. The sheer volume of information that was available was astounding.
This got me thinking about my many conversations with retailers and vendors regarding Big Data in retail. Whether you opt-in or not, retailers are able to gather huge amounts of data on your purchase patterns, response to advertising, location, dwell times, and preferred payment methods. Much of this data can be directly tied to loyalty cards to specifically track individual customers through every touch point. As retailers process all of this data, they can target specific advertising to the customer to encourage greater frequency and larger basket size. In my case, when we approached a store my daughters love, we got a coupon for 40% off non-sale merchandise. Since both my girls had their own money, they immediately knew what they could afford to get. The funny thing was that the first thing my youngest daughter asked when she saw the store was, “Do you have a coupon on your phone?” Had we not had the coupon, neither girl would probably have been able to buy anything due to the prices. Each had a set amount to spend, and with the offer, the store captured two sales it would not have normally made.
If you think about these things happening all over the U.S. and beyond, purchases like this can mean the difference between profitability and bankruptcy in a business that has seen shrinking margins and increased competition the past few years. As smartphone use increases, the amount of advertising pushed to the consumers as they walk through the malls will only increase. The risk is overwhelming the potential customer with the various ads. Some people may see this as an annoyance, but the way to overcome this is to make sure the messages are personal and relevant. Just as retailers are realizing the importance of the personal connection with associates in the store, the advertising must be just as personal. By using the data to form a complete view of the customer, the ads can be tailored to consumer preferences and focused to receive the greatest return.
In my previous example, the company that pushed out the ad for my wife focused the ad on accessories that went with a recent purse purchase she made. The ad mentioned the previous purchase, suggested items that coordinated well with it, and let her know what was on sale at the store a few hundred feet away. Now, since we were in “vacation mode,” we were not spending on ourselves, but my wife will remember the ad when we get home, and I have no doubt I will see a new pair of shoes from that store in our closet in the very near future.