TUCSON, Ariz. — Big data. Retailers want it, but where to get it is the hurdle.
The labyrinth of information revolving around customer behavior and how to leverage that into a personalized in-store and online experience was a focal point throughout last week’s Global Retailing Conference held at the Westin La Paloma Resort & Spa. It’s key to unlocking customer information that can potentially translate into sales and loyalty.
“I want to own that customer but it’s a moving target,” said Terry J. Lundgren, Macy’s Inc. chairman and ceo. “We have to be conscious of that.”
Among the gatekeepers of that information: Apple with its Apple Pay.
“They have the customer data and so I need that data,” Lundgren said. “If I’m going to be relevant to consumers, I have to know what they want, and to know what they want, I have to know what they’ve done in the past. So, to me, that honing the customer data is really, really important and we will work out with Apple long term because they didn’t have the technology to actually make that happen, but over time we will.”
MasterCard Advisors sees some 160 million transaction hourly and has about 2,000 data scientists sifting through those transactions, which includes cash and check purchases for a full picture of the retail economy.
“How do we make money out of big data,” said Sarah Quinlan, senior vice president of market insights at MasterCard Advisors. “What are we doing with it?”
While retailers may not have access to the kind of information a MasterCard or an Apple may have at the moment, there are other ways to glean more knowledge about what customers are doing away from a Web site or in a store.
“That’s why prepaid cards are so critical — not gift cards. Prepaid cards where they have the ability to spend everywhere,” Quinlan said. “And if you, as a retailer, issue a prepaid card, you know what they do away from you. How valuable is that information? That’s the key thing is that there’s other ways to figure it out.”
Apps and social media may be less high tech ways of going about that data mining, but they can still uncover valuable insights.
“Mobile is what we think first,” said Macy’s chief marketing officer Martine Reardon. “So in the day of creating websites and digital content, we would start with the desktop. Now it’s mobile.”
More than 2 million people use Macy’s app daily, according to Reardon. The features let customers scan items in store to check for prices, look up customer reviews, check inventory for alternative colors and sizes and checkout among other functions.
Macy’s is now testing beacon technology, which lets retailers do much of the same analysis they can do with customers online—where they’re going or how long they’re browsing, for example — in an actual store.
“We’re trying to do the same thing in stores,” she said. “We’re trying to help the customers [and] understand what is the best way to target her in more contextually relevant content.”
In fact, there’s important information that can still be had from in-store visits, said Healey Cypher, former head of retail innovation at eBay.
“There’s a myth out there that there’s better data online,” he said.
It’s about identifying quality data, said Brock Weatherup, senior vice president and chief digital officer at PetSmart.
Companies that are able to cull good data are the ones that will get ahead, he said.
Weatherup, a staunch supporter of Trunk Club, called out the online men’s styling service as a good example of what successful use of technology to personalize the shopping experience can mean for any company: greater spend and authentic marketing from satisfied customers themselves.
Still, retailers need to remember to manage customers’ and their own expectations about what any given technology actually does.
“I’d argue right now, relative to our retail industry, that the gap between what we can technologically do and what we are actually doing is where the consumer’s expectations are,” Weatherup said.
He used the example of E-Mart in South Korea, which lets shoppers bypass traditional grocery stores to instead do their shopping in places, such as the subway on their way home from work, by scanning the QR codes of items they want to buy. They check out on their phone and their groceries are delivered to their homes. He then pointed to Tesco’s testing of virtual reality shopping using an Oculus Rift headset that allows for shopping in a virtual store without requiring the customer to even leave their home. However, if it looks like a regular store, it’s still forcing a customer to pass by grocery product that may not be relevant to them and thus there’s still time wasted, Weatherup pointed out.
“Consumers are expecting such a high level but, by the way, where they are today, they’re going to be exponentially further than that not quite a couple years from now.”