This is Part 2 of the Retail TouchPoints Retail Analytics feature, a two-part series which highlights current issues facing retailers as they collect and analyze customer data across digital and physical channels. This installment spotlights the trends and challenges of integrating data from social and mobile channels to gain more insight into customer preferences. Part 1 of the Retail Analytics feature was published in the October 16 newsletter.
Due to the increasing volume, variety and velocity of customer data accumulating across channels, retailers are harnessing retail analytics to optimize their data collection and analysis strategies, resulting in more cohesive shopper profiles.
Now more than ever, retailers are acknowledging the increased value of integrating structured data with unstructured data found on social networking sites and via mobile devices. Because social and mobile channels provide a wealth of psychographic information, merchants are leveraging analytics tools and solutions to delve deeper into these channels and collect more granular data on shoppers’ wants, needs and preferences.
For example, best-in-class merchants are incorporating feedback and comments from Facebook and Twitter, web site browsing history and store check-ins via mobile geo-targeting applications such as foursquare and Shopkick with loyalty program accounts and transactional information. As a result, these organizations are making smarter marketing decisions with messages and offers that will directly address specific customer segments.
As many as 85% of organizations believe social media and other customer sentiment information is critical to their efforts to tackle Big Data, according to The Aberdeen Group research brief, titled: The State Of Big Data. In addition, 83% of companies worldwide are finding value in collecting clickstream data.
But social media channels and other feedback portals often are difficult to manage and track. “Just a single social media source, Twitter, generates thousands of discrete messages per second, and millions per day,” noted Nathaniel Rowe, Research Analyst of the Enterprise Data Management Branch of Aberdeen. “This data can provide incredible value, but it has a very short shelf-life … [and] … has to be ingested and analyzed in a very short window of time.”
Social media sites alone have greatly altered how consumers interact and follow their favorite brands. Facebook, Instagram, Twitter and other social networking sites also are influencing how often and quickly shoppers share feedback. A study from Burst Media, titled: Online Insights: Let’s Get Social, indicated that nearly 50% of consumers frequently or occasionally “Like” and follow brand name products or services on Facebook, Twitter and other social media. Furthermore, 29% of men and 30% of women share feedback with their social graphs regarding brand items or experiences.
To better keep pace with a constant stream of customer feedback and other insights on social networks, the Aberdeen report indicated that retailers are investing more in predictive analytics (45%) and real-time data integration (32%) tools that offer real-time insights into customer wants and needs.
“Collecting and integrating structured and unstructured data can help retailers develop a more succinct profile of customers, which can be used to increase and improve the quality of the retailers’ engagement with their shoppers,” Alison Paul, Retail Sector Leader of Deloitte LLP, told Retail TouchPoints. “Retail analytics helps merchants know their customers and better predict their shopping behavior and desires.”
To create more compelling marketing campaigns, best-in-class retailers are focusing on collecting psychographic data that will complement demographic information, resulting in more in-depth segmentation, according to David Dorf, Senior Director of Technology Strategy for Oracle. Mobile and social media, he revealed, are two breeding grounds for this psychographic data.
“Instead of just collecting information about age, gender and income, retailers today are starting to get information from social sites around interests and opinions to obtain a better picture of consumers,” Dorf told Retail TouchPoints. While this more granular approach enables retailers to target consumers and refine marketing strategies to create more relevant campaigns, messaging and offers across channels, a lot of infrastructure is required to collect and manage all of this information.
“Retailers need a full-time staff that creates the marketing messages and really engages people so that they’ll give up that information,” Dorf noted. “Then, of course, technology is required to process the structured and non-structured data and make something of those insights.”
Social Analytics Best Practices Improve Marketing Campaigns
While many retailers are integrating technology that delivers seamless access to product reviews and the customer sentiment it reveals, more organizations are turning to blogs and social networks to harvest even more granular information about customer wants and needs.
“Retailers are using both product reviews and social networking sites to understand a customer’s expressed opinions and sentiment toward a particular brand or product,” said Jay Henderson, Strategy Program Director at IBM. “Retailers and marketers can bring together these elements to better understand customer wants, needs and interests, and use this information to feed their marketing campaigns, just as they rely on data such as historical transactions and marketing responses.”
Retailers can garner an influx of rich insights via social networks, such as opinions on in-store experiences, merchandising, inventory assortment, deals and general marketing campaigns. But to gather and address this unaided feedback effectively,
organizations must make social media analytics — or socialytics, a term coined by IDC — an integral part of their operations.
In the report, titled: Business Strategy: Socialytics — Enabling the Social Business of Retail, IDC Retail Insights shares best practices and tactical approaches to help retailers harness the power of social media. To optimize socialytics, IDC Retail Insights offered a typology of four methodologies, including:
- Text Analytics, to determine what is being said across social sites, and how often.
- Social Data Analytics, allowing retailers to quantify how often individuals are visiting retailers’ social sites, the traffic source, what is being said, and the data or resources being accessed.
- Social Relationship Analytics, offering information about how much revenue is generated from interactions taking place via social sites.
- Social Collaboration Analytics, to reveal how information flows within specific networks and to pinpoint influential groups and individuals.
“Retailers need to have a deep understanding of how socialytics can help them make a broad range of decisions that extend well beyond brand management, traditional and digital marketing, and personalized communication,” Greg Girard, Program Director of Merchandising Strategies and Retail Analytics for IDC Retail Insights, told Retail TouchPoints in a recent article. “A process must be implemented, which allows them to harvest data and understand customer concerns by tuning themselves into relevant sites. From there, they can apply social feedback to relevant business decisions that need to be made.”
The Mobile Connection
Social media analytics allows retailers to keep tabs on consumers’ opinions regarding their retail experiences. By integrating this feedback with structured data, such as POS information and loyalty card accounts, organizations will develop a solid foundation for obtaining a 360-degree view of every customer.
However, to obtain detailed insights on consumers that don’t complete purchases or have loyalty accounts, retailers can leverage mobile data, which allows consumers “to announce themselves while in stores,” Dorf explained.
“If retailers can get a consumer to complete a check-in when they come into a store, it’s as good as having them logged in on a web site,” Dorf said. “With Shopkick and similar technologies, it’s possible to track Wi-Fi signals to determine where that consumer is within the store and amass even deeper shopper data.”
Geo-targeting tools and technologies also allow retailers to determine consumers’ locations in stores, Dorf added. In doing so, retailers can create personalized and relevant messages, and push out targeted offers based on specific departments. For example, the new real-time Passbook offering from Apple empowers retailers to push loyalty and other special offers to shoppers’ iPhones as they approach specific locations.
Putting Shoppers At The Center Of Marketing Decisions
Social networking sites and mobile tools and technologies are impacting the way consumers research products, buy items and connect with their favorite brands. Moreover, these digital touch points are altering how often — and how quickly — shoppers share feedback with their friends and family regarding retail experiences and campaigns across channels.
As shoppers continue to utilize these more digitized browsing and buying strategies, retailers increasingly are leveraging analytics to receive a wealth of information, honing in on more granular consumer demographics and psychographics. With these detailed insights in tow, merchants can better predict future behavior and improve marketing effectiveness.
“Engagement data, gathered from customer responses — or non-responses — to offers, can help retailers to determine the level of customer engagement by product, brand, or offer,” Paul explained. “Retailers can then use this data to determine what the next move should be — with the customer driving the process. Increased customer engagement often leads to increased loyalty and less churn, the ability to optimize inventory levels, more accurate forecasting, and increased revenue coupled with decreased costs.”
By harnessing the power of analytics, retailers can obtain a 360-degree view of every customer: from their age, gender and geographic location, to their favorite products and the channels they use to complete purchases. With these more detailed insights in tow, merchants can keep pace with the unique wants and needs of their shoppers, resulting in improved engagement and a boost in long-term loyalty.