E-commerce should stress analytics: eTail 2008
Even with the wealth of consumer information available to online marketers, too many still rely on “offline paradigms” to measure customer behavior, according to Sheldon Gilbert, founder and CEO of Proclivity Systems, during a presentation at the eTail 2008 conference Tuesday in Washington.
“Customers are telling us things constantly, but we don't see it,” said Gilbert, whose company focuses on analytics and predictive behavior modeling. “Many of you are sitting on a goldmine.”
He said many e-commerce companies only “look at the cash register;” only what a customer is buying. To fully optimize marketing efforts, he added, companies have to dig deeper into predictive modeling, and take into account factors such as seasonal shopping cycles, consumer buying and browsing patterns, and gauging the value of certain “action words” such as the word “organic.”
Gilbert also discussed the “wisdom of the crowds” mentality and how it comes into play regarding purchasing patterns. “People who are friends, consciously and subconsciously, buy similar products,” he said.
He also said that companies should mine their databases to learn what customers of one particular product are also buying. For example, if 79% of customers that bought denim products and shoes from a retailer overlap, then the company needs to determine how to send the proper offer to those customers based on that data.
“The data will tell you what to offer,” he said. “Human behavior is fairly predictive.”
Gilbert said predictive behavioral modeling will only get more advanced in the future, as companies start to mine areas such as social media groups, blogs, videos and customer reviews for data.
“These are the things we are starting to think about,” he said.