For retailers, the “Big Data” world can be an intimidating place. Gartner Research has indicated that information volume is growing worldwide at a minimum annual rate of 59%. Approximately 85% of that amount is “unstructured” data such as video clips, RFID tags, and web site logs.
But maybe “Big Data” doesn’t have to be so big. That was the message delivered by several retail data executives at the recent Online Media and Marketing Association (OMMA) Data Driven Marketing conference. Retailers today need to break Big Data down to create actionable data. In doing so, they can improve multichannel customer experiences.
"Data has become an issue for retailers because mobile and social media lack traditional structure,” said Greg Corso, VP of Media Solutions at dunnhumby. “The velocity and volume of those inputs is incredible. It's all worth nothing if you can't act on it. Omnichannel attribution has become paramount. Retailers need to spend more time measuring and analyzing online behavior to see how it affects in-store behavior."
With a client base that includes Kroger, Macy’s and a variety of CPG brands, Corso illustrated how dunnhumby focuses on improving retail decision-making through data about product range, availability, space planning and new product innovations. But these principles were somewhat contradicted by one of his clients.
Julie Bernard, Group VP of Consumer Centricity for Direct Marketing and Loyalty at Macy's, sent a buzz through the conference by her admission that human judgment still has value at the company, despite data collection and analysis efforts being a priority. Macy’s executives recently realized that they had enough data to customize print ads but found it too expensive, she explained. But the retailer also returned to traditional marketing methods for another reason: Executives believed advertising that was “too relevant” might start to be too predictable. Additionally, customers sometimes look at marketing pieces for fashion inspiration "If it's too relevant they don't get it."
However, there was a very back-to-basics approach espoused by many speakers at the conference. For example, Shania Boone, Group Marketing Science Director at Critical Mass said her company works with retailers — Best Buy among them — to aggregate and analyze all sets of data. Retailers need to build a culture of "analytics maturity,” she said, which should include responsible privacy policies.
The back-to-basics approach also focused panelists on the long-term view of data insight and application. Judy Loschen, VP at Epsilon, detailed her work with a retail client that sent unscheduled emails every Thursday. Email content was based on the weakest weekly product category. Email messages were converting for the first three months, but after analysis, Epsilon determined that the customer churn and unsubscribe rate were leading to diminishing and destructive patterns. The emails were stopped. When they were restarted, however, customer value and open rate rebounded.
“Data affects customer messaging relevance and frequency,” Loschen said. “Data is not just a short-term revenue driving tactic. It’s a key factor in long-term strategy.”