US store Target, famously got into hot water when it used analytics to predict when customers were pregnant in order to benefit from their upswing in spending and sent coupons to a teenage girl whose family were not yet aware of her pregnancy. Since then, the store has found subtler ways to target mums-to-be in a less intrusive fashion.
In our “Tomorrow’s Retail” report (download it now for free), we have found examples of retailers using purchasing data from milk to gas barbecue canisters to approach the customer with an offer before they have even considered shopping around. And although it might sound a bit ‘Big Brother’, what a great service to the customer that could be, if executed with consideration.
Amazon is famous for using its data to powerful effect. In pure merchandising terms, it reports that 30% of its sales come from its recommendation engine – that is, “Today’s Recommendations For You”, “Frequently Bought Together” and “What Other Items Do Customers Buy After Viewing This Item?” It also uses data to give a seamless feel to customer service calls, meaning that customers are not repeatedly asked to provide details that Amazon already possesses and customer service staff have access to the data they need – and thus removing those familiar frustrations we are all familiar with.
In a serious attempt to catch up with Amazon in the online space, US retailer Walmart is really taking its data seriously. It has made a massive investment in Walmart Labs, building new offices in a Silicon Valley base to give it access to the best tech talent. It has so far launched its own semantic-based search engine and is developing ways of combining online data with store shopper data to give personalised homepages, and even taking a shopper’s local weather forecast into account when making purchasing suggestions. Read all about it here.
The increasing pressure on businesses and governments to disclose information back to the public could cause retailers problems in their use of data – read about Smart Disclosure in this new HBR article. Tesco, always in the forefront in the utilisation of data to help customers and drive sales, has pre-empted Government regulations with its plans to roll out “Clubcard Play” – a service that will give its loyalty card customers access to their own shopping history along with planning and goal-setting functions. A bold attempt to harness another trend, gamification, to introduce some fun into grocery shopping.
The march of data continues. Retailers lead, but all other consumer-facing businesses can and will need to follow. How can you use the information your business has to help your customers? (not scare them!)