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Over the past few years, the retail industry has been driven by the notion of big data and the role of technology to enable retailers to amplify and capitalize on the insights that information can bring. It is all part of a drive for the retailer to gain a single customer view–a holistic, 360-degree view of an individual, both online and off. But what does that really mean and what opportunities does that bring to marketers and advertisers?
To paraphrase a cliché: It's now not just what you know about who you know, it is how you use that knowledge for the benefit of both parties that matters. Once you have access to big data, the key is to use the right data across the right touch points and at the right time to consummate a value exchange with consumers.
Put simply, the more tailored your communications and the more relevant your offers, the more likely that consumer is to click through, engage with your brand, and ultimately buy what you are offering – completing a virtuous circle.
This is something that loyalty providers such as Aimia and i2c have been doing in the analog world for some time.
Taking down walls between online and offline
Marketers forget offline channels at their peril. They must understand the importance of getting it right at that analog level, something digital-focused marketers often do not. Real – rather than self-reported – behavioral data matters, and linking digital data to actual transactional data is key to measuring the return on investment (ROI) of marketing communications.
Whether their data is digital or analog, too many retailers and brands are still using inadequate or inappropriate data to inform their communications. Take the brand launching a new cereal variant that wants to acquire customers. A seemingly obvious approach would be to look to target customers from immediate competitors and acquire data on that basis, but in isolation that is one of the worst things that brand could do. It needs more data points, more information. Do customers only buy that product? Do they shop around? Are they shoppers who actively like trying new things when they first come out?
With those few questions, we have immediately built a more rounded view of the customer. There is sophistication in using all the right data on multiple platforms to drive the greatest return. In a connected world, we can look at the digital footprint of a customer through tracking cookies and social interactions. What do they like on social media? Are they influencers or followers? Such powerful digital data can be used in conjunction with data that shows what people are actually buying.
Companies such as i2c are now blending transactional data against online media tracking, giving brands the opportunity to reach specific shoppers based on their offline and online behaviors — providing more relevant, powerful, and consistent messages across the shopper journey.
One example comes from a program we ran with a major UK supermarket chain, to support its promotional and marketing push around Valentine's Day. We knew many people leave their Valentine's Day preparations to the last minute and wanted to target this group. We identified from transactional data people who had bought items such as takeaway meals, wine, flowers, and other gifts the previous year and ascertained that they were still customers. This specific target audience would be served a Valentine's-themed campaign focusing on a range of products and incentives to buy. But we wanted to scale that up. So, working with the owners of cookie pools, we set out to find others who looked like our target group of customers based on their online personas.
The results were impressive. The wider target performed far better than average, yet the performance from our original target was two to three times better still – from engagement to click-through and, ultimately, sales. It shows that the more specific a brand or retailer can be in defining its audience, the more effective that campaign can be. We have seen even bigger uplifts with some of our more recent campaigns – up to an 11x ROI, in fact. Campaigns can only perform this well when you're using all of the data points at your disposal to offer the customer relevance and value.
Tapping the power of personalization
With digital, it can be tempting to want to target everybody possible because of the low entry costs. But, as early practitioners of email marketing have found to their cost, consumers barraged with untargeted, irrelevant, and annoying messaging simply tune out and turn off. They do the same on Facebook and they will do the same with new technologies such as locational beacons if we are not careful.
Consumers are increasingly savvy to the value that their data brings brands, particularly across the digital universe, and they will not readily give this personal information for free in the future. At i2c, we have a head start in this new world that we honed in the analog age. When they use their loyalty cards, customers understand that the relationship pays them back in terms of targeted communications, tangible offers, and points they can exchange for valuable rewards.
As we begin this journey to bridge the real and virtual worlds, the results so far are promising. By marrying transactional data (whether online or off) with a person's anonymized digital persona, we can begin to truly communicate with the individual. Who knows, personalization might even help wean retailers and shoppers from the discounting culture we have created to one that adds value and rewards loyalty while also building brand equity.
Ultimately, the question retailers must always ask is, “What value does this bring to the customer?" This single customer view provides marketers with the tools to put the customer at the heart of this value exchange.
About the Author:
James Moir, CEO, i2C
i2c is a joint venture formed between Aimia and Sainsbury's to deliver a one stop shop for FMCG suppliers to invest in shopper insights and shopper marketing services
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