Data drives e-commerce

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Data drives powerful results for retailers
Data drives powerful results for retailers

When JCPenney's management said the company would revamp its entire merchandising and marketing focus in January, it spent a large portion of its meeting with investors showing off reams of consumer data that supported the decision.

The retailer's CMO, Michael Francis, said diving into databases was the starting point of shaping the company's strategy to drastically cut back markdowns and concentrate its marketing on a monthly schedule. “We went through a vast amount of quantitative and qualitative data,” he says at the time.

Retailers are increasingly taking deep dives into consumer data to create a shopping experience that's relevant to shoppers, especially in the online space. Not every revamp is a total brick-and-click overhaul like JCPenney's, but multichannel retailers are looking at everything from social media feeds to Quick Response (QR) code scans to old-school email click throughs to shape their digital presence.

Whether it is a supermarket linking loyalty program data with display ads to deliver digital circulars with relevant offers, or a dealership that offers personalized websites to car buyers that follow them along the ownership cycle, retailers are leveraging data to custom tailor every stage of online shopping.

“In the past, marketers were using the information in their databases to determine a consumers' lifetime value to the brand,” says Mark Miller, SVP and CRM practice lead at Digitas. “Today, marketers must use their database to figure out how to position their brand in a way that provides value to the consumers, instead of the other way around.”

Powerful results

The incremental results can be notable, and spread across product categories.

FordDirect, the joint digital marketing venture between the automaker and its dealers, has achieved 35% increases in service retention and 10% hikes in repeat vehicle sales through its Targeted Marketing program. The system ties into the dealer's database to provide personalized, targeted communications to shoppers, and customers in the database get a personalized website that tracks their service history and provides them with special offers.

“Targeting customers based on product features that align with their interests, lifestyle and purchase history helps us anticipate their questions and provide information that better commits them to the sale,” says FordDirect CEO Stacey Coopes. The targeted communications increase the likelihood of purchase by about 10%, she notes.

Personalized communications based on data build stronger bonds with a brand than can be done with “batch and blast approaches,” says Michael Fellner, manager of email marketing at online retailer Zappos.com. He says the shoe e-tailer has thrived by using data to drive segmentation and content for email and direct mail and to shape email contact strategy.

Marketers should not underestimate what's at stake here: Among its predictions for the next three years, analyst firm Gartner forecasts that 80% of multichannel efforts implemented through 2015 will fail because retailers will stick to strategies centered on products or retail channels, rather than focus on the customer.

“The biggest change that we have seen is a shift between silo-based marketing to being smart about looking at the consumer and looking at the consumer's ecosystem and saying: Where does my marketing fit in to this entire ecosystem?” says Jason Harper, VP of analytics and marketing intelligence at marketing agency Organic.

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