Risk-taking retailers can roll the dice with near certainty thanks to predictive analytics solutions that deliver crucial consumer data and insights “based in confidence.”
And through solutions such as Test & Learn, a program from Mastercard’s Applied Predictive Technologies arm, advanced analytics allow brands and retailers to experiment and innovate in digital and physical spaces with mitigated risk, as well as provide “executive-ready” outputs that quickly and clearly articulate vital consumer insights and recommendations. Mastercard’s Test & Learn solution caters to almost half of the top 100 retailers in the U.S.
The solution’s three-pronged approach to generating insights is a step-by-step process that begins with designing a test and selecting a representative group to partake in an experiment; measuring its impact via control group comparisons, and optimizing rollout by identifying key performance drivers and predictive modeling designed to increase profitability.
Anthony Bruce, Mastercard’s president of advanced analytics, told WWD, “The ability to accurately predict the impact of an initiative before taking on the cost and risk of rolling out an ineffective program is tremendous. Being able to measure all of the smaller decisions that can ladder-up to a bigger success means that companies working with us are able to respond rapidly and more effectively. They can rigorously design and analyze hundreds of tests, rather than a select few.”
The company noted that consumers are keenly focused on amenities and expediencies offered by brands and retailers. “One of the trends we saw accelerate in the last year was around convenience-focused initiatives — essentially, programs or offerings that are meant to make consumers’ lives easier. With all of us pulled in a million directions, brands that make things simpler can be a real draw. We discovered this in our original State of Business Experimentation survey, which details how leading organizations are experimenting across their business to improve the customer experience. Retailers cited increased competition with companies launching convenience-oriented initiatives and predicted that competitive pressures on this front will continue to grow as consumers increasingly opt for the most frictionless, convenient shopping experiences.”
And, unsurprisingly, the importance of omnichannel retailing for a cohesive and immersive shopping experience can never be overstated. According to Mastercard, omnichannel strategy is especially impactful when measuring the success rates of digital advertising campaigns, “as it can be challenging for organizations to attribute in-store purchases to online ad exposure,” Bruce said. “Imagine a customer sees an ad for a coat online, checks it out on the web site, then waits a few days and goes into the store to try it on before purchasing. If the retailer does not have a process in place to measure the impact of digital ads across channels, the resulting sales may not be captured in the ad measurement, creating an inaccurate picture of campaign effectiveness,” Bruce added.
Bruce also said there are some occasions when retailers will introduce products through online channels before distributing them to physical stores, as retailers are looking both in-store and online to test new products to appeal to the omnichannel consumer. Bruce told WWD, “Shopping is personal, but retailers have to be practical. The customer has endless options and the journey reflects that. I may prefer to browse on an app but purchase in-store after trying on a new shirt, whereas my wife may browse and buy online. It is important that retailers evaluate new programs with a cross-channel lens to understand their true overall impact on the bottom line.”
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