How retail data drives sales online and in stores
In the hypercompetitive world of retail, which is often a blur of multichannel strategies, seasonal promotions and personalized advertising, there's one important key to differentiating yourself from the competition: retail data.
Of course, having data is table stakes. Every retailer has tons of it, and the numbers tell the story of clicks, conversions, add-to-cart, dwell time, average order value, foot traffic, bounce rate, exits and time to purchase. Successful retailers not only have data, but know the right questions to ask to produce actionable insights that can be used in real time.
Simply knowing which products sold and which didn't is not enough. Retailers that want to prosper should use their data, from online and in-store sources, to look ahead. After all, data is the secret to building a fulfilling customer experience and predicting what people are interested in buying at any given time.
Retail data is the key to understanding customers
Data today gives retailers the means to understand their customers' intent and preferences. Do customers prefer to shop online or in the store? Do they move from mobile to desktop to in-store and back to mobile? Does their behavior depend on the type of item they're buying or its price point? More and more, retailers are combining online data and information collected in stores to develop a fuller picture of their customers.
Besides the obvious point-of-sale data, how can you collect data in stores? Many brick-and-mortar stores are using video technologies to amass vital retail data. Video analytics can be used to create heat maps that show what aisles and displays generate the most interest, according to Mobile Cloud Era. Merchants can study how long a customer lingers in front of a product, and this can help determine whether customers comparison shop and ultimately make a purchase.
This data allows merchants to "optimize store layout, (and) place things according to where they know customers are going to see them first or most actively," David Morin, a retail analytics expert at Prism SkyLabs, explained in an interview. "Again, to be able to improve the overall customer experience in the stores."
Having such retail data also allows enterprises to constantly test their promotions and initiatives so they can embrace what works and discard what doesn't, according to Shelley Kohan of RetailNext. Say, for example, a retailer wants to create a new display: "You design sample fixtures, you put them in a store. You test them for three weeks, six weeks and then, if they work, you roll them out," Kohan explained. "If they don't, you tweak them and then roll them out chainwide."
Data shows the way online and in-store
Retailers can also leverage technology to generate data on how consumers describe and ultimately search for products. Retail analysts can now explore the products that shoppers view during online sessions to better understand how they should present their inventory. This tactic has helped retailers like Neiman Marcus tailor shopping experiences to individual customers, according to Internet Retailer.
Retailers can also see when their product descriptions aren't aligned with their customers' search terms, leading to missed opportunities for sales. And the results can be significant. According to BloomReach, Kohl's Director of Digital Marketing Sarah Rasmusen, recently told a Shop.org Digital Summit crowd that her team was puzzled last year when online customers began searching for a "dancing diamond" pendant, because it was a term they were not familiar with. But by using data, Kohl's merchandisers were able to figure out what piece of jewelry shoppers were buying after searching for that keyword. Rasmusen's team used this information to make online adjustments, and they alerted brick-and-mortar sales associates, who'd also been puzzled by the description. Thanks to this insight, the in-store team realized that the pendant was a hot trend, and this led them to feature the piece on the cover of the Kohl's Mother's Day catalog.
Thanks to data analytics, Kohl's and other data-driven retailers have the chance to go beyond simply knowing what products sold. They have a chance to use retail data to look forward with their strategies and better understand their customers.
Maximize the potential of your retail data with solutions that can grow your business. Connect with analytics professionals via IBM's Retail Solutions Page.