A Little Problem With Big Data

Courtesy RetailWire.comA STIMULATING DISCUSSION in RetailWire.com this morning led me to once again think deeply about how retailers are confronting so-called Big Data and applying it to their businesses.

The question posed was an intriguing one, given the continuing hype and mysticism ascribed to Big Data over the past several years.

What is your take on the advancements (or not) retailers are making in the use of data capture and analysis? Is it all leading to significantly improved customer experiences down the road, or something less?

The responses mostly seemed to accept two tacit assumptions: One, that all store data is Big Data. Two, that the primary goal of Big Data analytics is the creation of targeted promotional offers. I have a little problem with that.

When did retail POS data suddenly become Big Data? We’ve been collecting it (and mostly discarding it) for decades. Now that storage costs have finally declined, we can capture and hold it long enough to run a few queries and design a few models. Shopper in-store data really hasn’t changed much, but our ability to mine its potential has certainly advanced.

Certainly data flows from the POS and frequent shopper programs continue to expand. There are even some new sources, like in-store shopper tracking, entering the mix. Yes there’s lots of data. But is this really Big Data?

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The Store is Dead! Long Live the Store!

Margo Georgiadis, GoogleTHE DISTINCTION between online and off-line retail sales grows blurrier by the minute, as shoppers meld their consideration and purchasing behaviors into an “all-line” shopping continuum that spans brick, web and mobile.

“The war for store traffic will be won or lost on digital,” said Margo Georgiades, President of Americas, Google, who spoke in Tucson, AZ last week at the 19th Global Retailing Conference sponsored by the Terry J. Lundgren Center for retailing at the University of Arizona.

In 2010, U.S. retail stores recorded 39 billion “footsteps” in November-December, she reported. By the same period in 2014 that number had declined to 18 billion. Despite that huge drop-off in store traffic, store revenues grew for the same periods from $641B in 2010 to $737B in 2014.

“Those footsteps didn’t go away,” she said. They just went online.”

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SCAMP: Deconstructing Shopper Experience in a Big Data World

Click to view recorded forumHOW SHALL WE UNDERSTAND SHOPPER EXPERIENCE in the present era of digital and social media immersion outside the store?

I’ve been insisting for some time now that the walls of the store are dissolving before our eyes as shoppers arrive pre-conditioned, pre-considered, even pre-decided due to their SoMoLoMe experiences outside of the building. Earlier this month I had the privilege of sharing some ideas about the flip side of this equation as participant in an excellent webinar, “Digital Disruption and the Retail Experience: Earning Loyalty in the Age of Empowered Consumers.”

The event was part of the Customer eXperience Thought Leader Forum series, produced by our good friends at CustomerThink. Conformit sponsored. I joined Miguel Ramos, Mobile Practice Lead at Confirmit, to explain how the retail enterprise can be re-engineered for success in the age of empowered consumers.

Download Presentation (PDF format)To make my points, I updated SCAMP, a model I developed for understanding customer experience in the physical store. The new wrinkle was to examine with a few examples how social, mobile, and digital experiences are influencing retail experience engineering in an era where Big Data flows can overwhelm store data. SCAMP is a model with five pillars: Service, Convenience, Ambiance, Merchandising, and Price, I originally proposed here in TensersTirades in 2008.

I invite you to click the images above to access the full webinar recording or to download a PDF copy of the slide deck.

© Copyright 2014 James Tenser

The End of Loyalty

Tom Fishburne cartoonIF IT EVER WAS, it’s fading fast. I’m talking about shopper loyalty and the card-based frequent shopper programs that try to pass as loyalty builders.

I’ve long been a skeptic about the premise of customer loyalty. Card based programs are more about behavioral modification, segmentation and targeting. In many instances — airlines come to mind — the net result is the cultivation of dis-loyalty and skepticism, as a consequence of added complexity, suffocating rules, suspect prices and incentives that many users can never achieve.

Now comes news that the Kroger supermarket chain has begun converting its frequent shopper card holders to a smartphone app. This is news with big numbers behind it, as 96% of Kroger shoppers presently possess a card. Its personalized marketing subsidiary, dunnhumby, is surely driving this action.

This morning, the good folks at RetailWire.com asked its distinguished BrainTrust panelists: “Will Kroger’s App Replace its Loyalty Card?”  Here’s what I had to say about it:

Welcome to the post-loyalty era.

Card programs are not quite obsolete, but they are about to be absorbed by mobile apps. While a front-runner such as Kroger/dunnhumby may be able to convert many shoppers to its proprietary app for a while, the lasting future will be defined by electronic wallet solutions that aggregate frequent shopper plans, coupons and payments on the shopper’s terms. NFC communication with the POS will likely be a key enabling technology.

An observation: The pure value of of frequent shopper data is approaching its zenith. It now diminishes slightly in relative significance as the volume of social media interaction grows. This is the mind-bending next stage in behavioral-based marketing: Things people do, say and experience outside the store may soon eclipse what happens within the four walls.

For retailers that have steadfastly bucked the loyalty-card trend (like Walmart), this may be a moment of affirmation. Or maybe they just got lucky.

© Copyright 2013 James Tenser
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