Breaking Down the Data Silos

New technologies allow large retailers to build sizeable, indispensable enterprise data warehouses of financial and operational performance. But loyalty systems may be siloed from transactional information, separate from the marketing database for campaign management. E-Commerce data may reside in a different silo, email marketing in another and social and mobile data also detached and divided.

Once accessed, raw big data is cumbersome for most retailers to utilize: For example, a report showing the number of clicks per day is far less valuable than knowing where and when those clicks occurred, what products customers skipped over, how much time was spent on each item viewed, which clicks converted to sales, which marketing campaigns worked, and how future campaigns can best resonate with similar paths to purchase.

“Knowing how customers engage through traditional, online and digital media and how they interact within these same purchase channels provides a deeper and better understanding of the path to purchase,” stated Bob Hale, CEO, SDL Campaign Management and Analytics. “The insights and intelligence gained from shoppers’ behaviors and interactions with a retail brand create a road map for building meaningful, lasting connections with customers, and minimize the retail marketing’s time to value.”

Customer databases and analytics that leverage business language and focus on the marketing function greatly empower today’s retail marketers. Consolidated customer data that is refreshed continually with interaction data enables the marketer to listen closely to customer requirements, preferences and feedback. Analytics then provide the understanding of how to interact with consumers as individuals at different stages in the customer journey and purchasing lifecycle.

With customer analytics immediately actionable through retailers’ campaign management solutions, marketers can pinpoint and engage with targeted customers at the best time across the most effective touch-point channels with the correct offers in interesting messages and with an appealing tone-of-voice. This is the differentiating capability that drives the five tactics impacting the bottom line for retail marketing leaders today.

The 5 Benefits of Advanced Data Analysis

1. Boost Multi-Channel Conversions

In order to uncover the details of how each shopper completes purchasing decisions, retailers must strive to micro-segment that behavior and convert it into actionable data. This strategy must reach across all channels and touch points, delivering a complete picture that will allow merchants to design personalized marketing programs.

“Anticipating consumers’ every move to conversion — and measuring every interaction across every channel — is essential to realizing a strong marketing ROI and sustaining competitive differentiation,” according to a recent multi-channel marketing report from Accenture, which focused on measuring marketing ROI in the digital era. Effective tools are available that influence microtargeted marketing campaigns and help multi-channel marketers make accurate investment decisions across channels.

“With data granularity and new analytics techniques, marketing organizations can access microsegmentation data and deliver targeted marketing campaigns to individual consumers or to a specific segment of consumers at scale,” according to the Accenture report. Companies also can make “continuous improvements” as they “‘test the water’ for new products and services; learn from early consumer responses; and make the necessary changes before launching them to a wider audience.”

Specialty Fashion Group (SFG), Australia’s largest women’s apparel group, faced several challenges to deploying crosschannel communications to drive maximum ROI. The company engages with customers, including seven million loyalty members, through 900 stores, seven brands, eight transactional web sites, Facebook pages, email, electronic direct marketing (eDM), blogs, competitions, SMS and more. To help increase multichannel conversions, SFG sought to extract meaningful insights from fragmented data, obtain a single customer view across channels, and deliver targeted communications based on individual, distinguishable customer journeys.

SFG implemented a single omnichannel platform — powered by the SDL Intelligent Marketing Suite — to capture customer insights through ad-hoc analytics and real-time reporting to the brands. The move enabled responsive, data-driven marketing campaigns, and allowed SFG to define and streamline marketing processes to support both proactive and reactive business decisions based on market conditions.

For example, with the SDL solution, SFG drastically reduced production times for eDM from 24 hours to less than two hours, saw an ROI of 2,200% for the most recent 200 eDM campaigns, and also realized:

• eDM open rate uplift of 12%;
• eDM click-through rate increase of 44%;
• A rise to 45.7% from 32.4% in email member contribution to sales; and
• Average campaign ROI of more than 1,800%.

“Data is a critical component of our business, but too much or erroneous data can be detrimental to our customer relationships,” said Alison Henriksen, CFO of SFG. “Working with SDL, we are able to better understand our customer information and, as a result, deliver promotions and information through the right channel at the right time.”

2. Drive Up-Sells and Cross-Sells

With the ability to analyze detailed data sets, retailers can boost sales in a variety of ways, including up-sells and cross-sells. Today’s advanced technology solutions provide the means to integrate and synchronize customer data in order to identify products to suggest beyond the original purchase.

“Retailers should leverage the vast amounts of consumer data that have been at their fingertips in their data warehouses for years,” said Alison Kenney Paul, Vice Chairman and U.S. Retail and Distribution Leader, Deloitte LLP, in her 2013 Outlook on Retail. By examining and analyzing traffic patterns in stores, mining loyalty data and monitoring consumers’ behaviors, “retailers can be positioned to connect more intimately with their shoppers and understand what they desire,” she said. “A deep understanding of the customer’s psyche may enable retailers to up-sell, cross-sell and engage the consumer in a more compelling way.”

One significant marketing hurdle for Dave & Buster’s, an operator of 60 retail venues offering interactive entertainment as well as food and beverage, was to unite the customer data stored and updated separately for the two distinct retail segments. The company maintained one system for insight into customer game play and spend, and another for tracking POS data on food/beverage transactions only. These disparate customer systems led marketers to generate inconsistent messaging and callsto-action.

Dave & Buster’s sought to establish one source of marketing intelligence and a single rewards/ loyalty database for both customer segments. With a centralized data warehouse, Dave & Buster’s planned to generate intelligent upsells and cross-sells by providing customer credits for both gaming and dining transactions, as well as create more consistent and impactful communications.

Using an SDL solution implemented by customer engagement agency Ansira, Dave & Buster’s achieved a singular, robust data source providing member-level analytics and individualized tracking of transactions, coupons and redemptions. With real-time access to customer data and analysis, Dave & Buster’s is now able to optimize program communications to drive memberships and boost transactions, based on individual customer behaviors.

The platform also allows Dave & Buster’s to execute customized, triggered email messaging campaigns based on member type and activity; distance to location; part-of-day usage; transaction behavior; card activity/coupon redemption; and other parameters.

As a result, targeted emails compared to nontargeted emails generated a 26 times greater increase in sales: Targeted emails accounted for $52 million in additional sales compared to only $2 million for nontargeted emails over a one-year period. Sales among registered members were 13 times greater than non-registered members: Enlisted members generated $38.5 in sales per customer versus only $2.85 in sales per non-registered member. Since the inception of the loyalty program, Email member sales contribution has more than doubled.

3. Create More Effective Marketing Strategies

As customers browse and purchase across channels, they generate a wealth of data for campaign managers intent on achieving more effective marketing strategies. Savvy retail marketers grasp and merge that data with powerful analytics to reveal rich and valuable customer information that optimizes success. For example, the granular demographics and psychographics retrieved help retailers better understand their target audiences, then craft the most efficient and impactful promotional strategies for direct mail and digital marketing campaigns.

“The data brands collect enables customer understanding,” said Jay Henderson, Strategy Program Director at IBM, in a recent Retail TouchPoints feature story. “This in-depth information allows brands to determine the most effective and relevant selection of marketing messages and campaigns they disseminate to customers.”

Localizing campaigns based on defined data sets such as transactions by demographics is key to achieving more effective customer-focused marketing strategies. The UK subsidiary of an international pizza delivery franchiser consolidates transaction data by delivery zone, then transforms that intelligence into tailored, actionable direct mail and digital marketing campaigns that drive increased engagement. The company generated 12% uplift above usual store promotions by using SDL Customer Analytics and SDL Email Manager for better segmentation and targeting to localized marketing strategies.

Based on detailed customer data and customer propensity models, the pizza delivery company is able to identify which pizza options work best in different delivery areas, and which days are best for localized special offers — all driving higher take-rates for promotional campaigns. Deeper customer understanding also results in higher revenues from up-sell items such as garlic bread, chicken wings, desserts and beverages.

The merchant primarily markets in the UK through direct mail and online, mobile and SMS applications. In 2012, total eCommerce sales increased by 46.3% over 2011, while sales for the year from mobile devices rose by 187%.

The company plans to expand the tailored, SDL-supported marketing strategies to leverage the huge growth potential of other local markets across the UK and in other European countries.

4. Acquire and Retain More Customers

Campaign management solutions applied to synchronized operational and analytical big data provide the marketing intelligence necessary to best engage, convert and retain customers. For retailers focused on acquiring and retaining customers, quality marketing data is essential to building a better service organization focused on growing the customer base.

“Best-in-class [organizations] make customer data quality a lifestyle — not an occasional event — and in turn, out-perform other companies in customer retention, sales quota attainment and shrinking their sales cycle,” noted Peter Ostrow, VP, Group Director, Sales Effectiveness and Strategy, Aberdeen Group, in a sales and marketing blog. “Whether prospecting for new business, or maximizing the customer’s ‘share of wallet’ from existing accounts, the most successful organizations … maintain stronger visibility into customer spend trends, risk factors and [other customer] storage/ access solutions to maximize… acquisition success.”

Most companies believe they that have not peaked in terms of customer wallet share, said Ostrow, and stand to learn how to improve their slice of the pie through better management of customer data and communications.

“Service is integral to business success and forms the core of a customer management and engagement strategy,” added Sumair Dutta, VP and Principal Analyst, Customer Experience and Service Management, Aberdeen Group, in his insights about an Aberdeen research report, titled: Improving Engagement with MultiChannel Service.

Within the report, Dutta stated: “organizations indicated that 81% of their revenues came from existing customers,” and that “the cost of service and customer retention was far lower than the cost of new customer acquisition.”

In today’s economic climate, the age-old assumption that “it’s easier to keep an existing customer than to find a new one,” said Ostrow, might more appropriately be stated as: “it’s easier to find new business from current accounts, than from our competitors’ customers.”

One of Europe’s leading electronic retailing groups uses multiple SDL tools to help acquire and retain customers across eCommerce domains and in more than 1,200 physical stores spanning 28 countries. The retailer is recognized for its numerous brands of consumer electronics, personal computers, domestic appliances, photographic equipment, communication products and related services. The SDL Intelligent Marketing Suite serve as a backbone for the electrical retail leader’s corporatewide, multi-faceted customer plan, which drives all work being done to streamline and grow the business, and is designed around a single goal: to improve the shopping experience.

As part of that Customer Plan, the electronic retailer pursues new business from both current and competitors’ customers, first by consolidating marketing data with the SDL Customer Analytics Engine database to obtain a thorough understanding of the target consumer. SDL Campaign Manager provides the tools needed to drive transactions from simple, automated promotions as well as more complex, multi-channel campaigns. For a seamless execution across digital channels, SDL Email Manager enables the retailer’s marketing group to deploy analytically based communications — individually tailored — to prospective and existing customers.

5. Deliver Consistent Brand Messaging Across All Channels

Whether digitally empowered consumers are interacting with a brand through an in-store, web, social or mobile experience, the carefully crafted and strategic brand message must be communicated consistently and uniformly across each channel.

In planning a 21st century brand marketing initiative, businesses must assure that all marketing, media and promotion vehicles (for example, advertising, public relations, social, mobile, in-store) communicate the brand promise with a consistent message, look and feel, according to a recent Forrester Research report focused on brand building. “Marketing leaders must evaluate their organizations’ brand-building maturity across five dimensions,” the report indicated, one of which is “a consistent brand experience across messages, actions and products.”

In a study provided by RSR Research, titled, Omni-Channel 2012: Cross-Channel Comes Of Age, 100% of retailers interviewed believed that maintaining a single brand identity across all channels was important, and that the customer shopping experience should be consolidated across all channels for a consistent experience. “But not having a single view of customers across all channels has risen as the top inhibitor for 55% of retailers,” according to the report. Retail Winners felt more strongly than other retailers that consolidating customer data across all channels is a prerequisite to prioritizing integrated cross-channel capabilities.

A leading gift and floral retailer was among the first to seize the retail marketing opportunities inherent in “SoLoMo,” a shopping behavior that encompasses social media, local stores and mobile technologies. However, with six brands being sold through multiple channels, including online and franchise retail locations, the retailer was challenged by delivering its brand message consistently across these multiple channels. The company required a solution that would allow its marketers to better understand customers and their behaviors, then deploy uniform messaging across customer touch points.

That answer was found in SDL Customer Analytics, implemented to consolidate key data obtained from each channel and create a single, collective view of individual customers. The advanced customer analytics technology allows the international floral delivery chain to ensure that customers receive the same uniform message, wherever they interact with the brand.

Conclusion: Harness the Power of Marketing Big Data

Identifying and responding to essential and ever-changing customer behaviors has become a top retail technology investment priority. According to Aberdeen Group, in a study titled: Big Data For Marketing: Targeting Success, 98% of firms surveyed planned to increase their use of data analytics for marketing during 2013. The transition to dynamic, behaviorbased segmentation and targeting, and real-time offer management means companies are likely to see significant growth in the volume, velocity, and variety of data, the report noted, and in the value of analytics that transform this data into actionable customer and campaign insights.

“While it hasn’t been an easy journey for retailers to recognize the need for a brand-oriented strategy defined by customer insights,” indicated the RSR omnichannel benchmark study, “that day has come for most in the industry.”

RSR recommends that retailers stay focused on the customer to succeed in navigating their cross-channel challenges, according to the report. Retailers also should think strategically about their customer interaction platforms and prioritize their investments according to their customers’ primary paths to purchase. With a powerful campaign management and analytics tool, retailers can leverage big data to understand shoppers’ unique interests, provide more personalized communications shopping experiences, consistently move consumers along profitable paths of purchase, transform them into highvalue customers and ultimately boost retail marketing revenue.