Shopper marketing: Enhance customer promotions, branding and pricing with data analytics
When it comes to shopper marketing, retail strategies are changing at unprecedented speeds. Traditional advertising and promotional vehicles, including direct mailings and one-size-fits-all sales, have been upended by the digital era. The retail paradigm has been disrupted by online and mobile shopping, and there are new ways that people decide what to buy. They might be swayed by a "pin" on Pinterest or a influenced by a customer review on Amazon. As a result of these evolving trends, the most effective shopper marketing methods are still unfolding.
New marketing technologies are always at risk of being replaced by the next big thing, but there are some emerging digital tools and platforms that hold big promise for retailers. These tools all have one thing in common: their use of big data to woo consumers and craft highly targeted merchandise offers.
Beacons have been getting a lot of attention in retail circles because they provide a way to tap into consumers' wants and needs. When retailers know exactly what shoppers are interested in, they can deliver customized promotions in a brick-and-mortar shopping environment. Beacon sensors, which are often embedded in a store's digital touch points such as shelves, signs and product displays, interact with mobile devices using low-energy Bluetooth signals. When shoppers have opted in to receive communications, beacons push real-time, personalized product information and promotional offers to these shoppers as they approach the merchandise.
Retailers are starting to reap the benefits of beacons. According to eMarketer, more than 70 percent of retailers surveyed say beacons help them track how consumers move through the store and understand why shoppers pick certain items. What's more, most retailers believe beacons help them craft more relevant offers, resulting in more engaged shoppers.
Data-driven merchandising decisions
Big data also can inform retailers' merchandising strategies by identifying voids in their product assortments. To do this, companies must glean insights from the many touch points they have with consumers, even the not-so-obvious ones.
For example, an apparel retailer tapped into its behavioral and location data and found that women between the ages of 13 and 24 frequently window-shopped their stores before purchasing similar, lower-cost products elsewhere, according to CIO. The finding led the retailer to create a low-cost clothing line aimed at these underserved shoppers.
Making sure the price is right
Retailers are also looking at data analytics to price their goods more efficiently. For years, retailers have monitored price-matching policies to keep pace with competitors, but now they're turning to big data to develop more nuanced pricing strategies.
"Competition is being driven by increased visibility of prices, even of localized prices, and online prices becoming de facto standard prices of like items which more and more retailers will match in stores," Greg Girard, program manager of merchandising strategies at IDC Retail Insights, told Retail Touch Points. "What's different now is that retailers are tooling up to have visibility of prices their competitors are charging, and with better analytics, they're getting smarter about which prices to match, go below or stay above."
The retail industry is evolving quickly, but new tools that enable better marketing and merchandising are popping up at an equal clip. Companies that want to meet and exceed the needs of their shoppers should consider how these data-driven tools can improve their business processes in the new digital world.
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