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Unwrapping rich data from mobile shopping over the holidays

By
December 6, 2012

Scott Gamble is vice president of digital solutions at Alliance Data Retail Services

Scott Gamble is vice president of digital solutions at Alliance Data Retail Services

By Scott Gamble

Most retailers probably never heard of “Simon,” but Simon plays an important role in how consumers shop.

Simon was the nickname given to the first smartphone, developed in the early 1990s by BellSouth Cellular and IBM. Today, 87 percent of shoppers own a smartphone, according to a recent study by Alliance Data Retail Services, and 65 percent of those consumers use their smartphones to assist in shopping – every single day.

While mobile devices are undoubtedly playing a major role this holiday shopping season, I predict that within the next five to seven years, their use for purchases will actually be greater than purchases made in-store or online. And that means it is time for retailers to get smart about the data from smartphones and mobile devices.

The rich data from mobile devices is a gift waiting to be unwrapped when the holidays are over.

Problem of dusty data
A study by Columbia Business School revealed that more marketers collect demographic data (74 percent) than collect customer mobile phone/device data (19 percent). And while retailers may be collecting different types of data – from customer transactions to social network ties – the data tends to be kept in silos.

Data does not hold value until it is combined in meaningful ways with other, relevant data – and structured and analyzed to make it actionable. If data just sits on the shelf like unsold inventory, it becomes dusty data and loses its effectiveness.

There are four critical pieces of data that every retailer needs to know, and mobile devices contribute to this knowledge:

1. What the shopper wants
2. When the shopper wants it
3. Where the shopper wants it
4. How the shopper wants it

Mobile devices alone will not reveal this information. As retailers and as an industry, we need to find ways to combine this data, to build the data sets that will deliver this type of knowledge currently lacking from most customer research.

On the most fundamental level, the effective use of that data drives sales for the retailer and brand loyalty for the customer.

Bricks and mortar to clicks and mortar to chips and mortar
Why is this new level of data collection so important when marketers might argue that national marketing campaigns can still be effective in bringing people into stores? It comes down to the “moment of truth.”

The moment of truth used to occur when a consumer walked into a store and saw an item for the first time. Technology has created a disruption.

The moment of truth has moved to mobile, where consumers are collecting information through different digital touch points – whether through their own research, or an offer sent via text, or a recommendation from their social network.

Today, some consumers come into stores knowing more than store associates about a specific product. This movement from bricks to clicks to computer chips is dramatically changing the way people shop – which is often influenced by their local environment, culture and climate.

So the end game for retailers must be to use data to empower local stores.

Driving marketing down to the local level is the way to truly engage consumers.

If a local store knows the key data about customers – what they want, when they want it, where they want it, and how they want it – the store can then make a relevant, personal marketing offer.

For example, if data-based predictive modeling tells a store that a loyal customer likes to shop on a Saturday afternoon using a coupon and credit card, and that a recent shirt purchase might prompt a sweater purchase due to cooler weather, then the store (through the retailer’s technology infrastructure) can send the customer (who has opted in) a text message about new sweaters in stock, offering a coupon for use within the next 48 hours.

WITH AN ECONOMIC recovery gathering strength, the holiday season may put some jingle in the pockets of retailers. But this is not the time to revert to traditional marketing initiatives, because they rest on false assumptions.

Digital disruption is not only gaining traction, it is gaining speed.

Retailers must embrace the disruption.

Now is the time to take a data inventory, to ensure that the right data is collected, combined, structured and analyzed. Then data can feed the technology that will deliver an improved, personalized customer experience. Done right, it is a gift that will keep on giving long after the holidays.

Scott Gamble is vice president of digital solutions at Alliance Data Retail Services, Columbus, OH. Reach him at scott.gamble@alliancedata.com.

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