The 2016 Retail Analytics Council Executive Development Program Takes Place on May 18-19
Plan to attend the Retail Analytics Council Executive Development Program on May 18-19, 2016, in Evanston, Illinois.This year’s program, “Applying Analytics to the Omni-Channel Retail Environment,” will bring together an international panel of leading retail executives and researchers to present and discuss cutting-edge research, technology applications, and retail case studies from the U.S., Japan, and the UK. Leading retailers and academics will be addressing topics such as the Changing Nature of Online Shopping, Managing Big Data, Information Security, RFID at Macy’s, the Behavioral Relationship Between Online Activity and In-store Purchases at GameStop, and much more. Additional information about the Retail Analytics Council Executive Development Program will be posted on this page in the near future.
2015 Executive Development Program Snapshot
Retail Analytics Council Event Focused on Using Analytics
to Develop Customer-Driven Retail Solutions
By Sara Romano
Medill School of Journalism, MSJ 2015
The inaugural Retail Analytics Council Executive Development Program, held at Northwestern University in Evanston, Illinois, focused on an important topic in the retail industry: using analytics to develop customer-driven retail solutions in an omni-channel environment. Attended by approximately 50 executives from a wide range of high-profile companies, the two-day event was organized and led by the Retail Analytics Council, a joint effort of Medill’s Integrated Marketing Communications department, Northwestern University and the Platt Retail Institute.
The event brought together retail analytics professionals and industry thought leaders to share the latest academic research and real-world examples in the field, featuring presentations from Medill IMC’s Associate Dean and Professor Frank Mulhern, Professor Emeritus-in-Service Don Schultz, Professor Martin Block, Assistant Professor Vijay Viswanathan, and Steven Keith Platt, Director and Research Fellow at the Platt Retail Institute. Attendees of the event included marketing professionals from retail giants including Gap, Kohl’s, Macy’s, and Walgreens, among many others.
Mulhern opened the conference with introductory remarks about Medill’s Integrated Marketing Communications program, which draws on cutting-edge research to prepare the next wave of retail analytics professionals.
“Technologies themselves don’t really do anything unless there are people to harness them,” Mulhern said.
Mulhern emphasized the importance of a consumer-first approach, where a deep understanding of the customer’s motivations, attitudes and behaviors is the first step in any marketing process. Data and analytics help to quantify the financial value of the consumer to the company. Only after this thorough evaluation should marketing objectives be established.
As Schultz echoed in his presentation on developing a customer-driven marketing communication framework, too often a company searches for customer data to support a pre-determined marketing plan, as opposed to starting with customer data. The five-step integrated marketing communications process turns traditional marketing on its head, beginning with customer identification and valuation before creating messages, estimating the return-on-customer-investment and budgeting/allocation/evaluation. In this model, the consumer becomes an ally to be influenced, instead of an enemy to be persuaded.
CUSTOMER INSIGHTS FROM DATA
Over the course of the conference, leading industry experts from a range of companies including Performics, comScore, Kohl’s, and GameStop presented their professional insights and discussed best practices concerning the use of technology and analytics to drive successful, customer-focused marketing strategies.
Gian Fulgoni, comScore Co-founder and Chairman Emeritus, introduced his market research company, which captures more than 1.5 trillion digital interactions monthly. The comScore team gathers data from more than 2 million Internet users around the world to gain insights into the retail industry and consumer behavior.
Fulgoni opened his presentation by explaining, “If you want to know how much time and money people spend online, don’t ask them.” According to comScore behavioral research and National Retail Federation data, online surveys drastically overstate e-commerce spending. Due to poor human recall and a skewed Internet bias, online surveys are extremely limited in their usefulness and should be approached with apprehension, Fulgoni cautioned. Such measurements continue to be widely used, however, because of their relative simplicity and low cost to administer.
From a macroeconomic viewpoint, e-commerce and m-commerce continue to grow. Citing figures from comScore research as well as the U.S. Department of Commerce, desktop e-commerce (retail plus travel) sales dollars were up 9 percent year-over-year in the first quarter of 2015, for a total of $93 billion. Retail e-commerce accounted for $61 billion of the total figure, also up 9 percent year-over-year.
With m-commerce far outpacing e-commerce and brick-and-mortar retail spending growth in Q1 2015, the need for retailers to develop a mobile strategy, and an effective mobile app, is greater than ever.
While mobile commerce has seen massive growth over the past several years, desktop engagement has not declined. comScore survey results show that almost half of people say there is some friction when making a purchase on a mobile device, most often citing screen size as a limiting factor. For a high-priced product where the value of the shopping cart is high, the desktop still reigns, according to Fulgoni.
“The screen size is going to remain a friction point that will hold down the ultimate potential of m-commerce,” Fulgoni said. “We expect it to grow in the near term, but until all of this stuff gets solved, and maybe it won’t be, I think it’s going to be a factor.”
In Q1 2015, apparel overtook computers as the largest online product category. Consumer packaged goods account for 9 percent of all e-commerce dollars, and represent the largest potential opportunity for retailers, Fulgoni said. In a $1.3 trillion category, only 2 percent of sales come from a digital platform.
In the race for consumers to embrace home delivery of groceries and other packaged goods, the advantage lies with Amazon, Walmart, Target, and other dominant online retailers, as opposed to traditional supermarkets. Fulgoni pointed to Amazon’s introduction of the “Dash Button” as evidence of the company’s movement toward capitalizing on this huge opportunity.
With the continued growth of digital consumerism, advertising implications for retailers become even more significant. By 2016, comScore projects digital advertisements will surpass television advertising and become the number one media buy. Fulgoni cautioned retailers, however, against succumbing to the ease and inexpensiveness of pay-per-click advertising, as comScore research shows that there is no relationship between click rates and the effectiveness of an online advertising campaign.
“Clicks are at best an incomplete, and at worst a misleading, metric,” Fulgoni warned.
A recent comScore study showed that the benefit of digital advertising is in the exposure, not the clicks themselves, that create significant sales lift, both online and in-store. The best online advertising results, Fulgoni explained, still come from a combination of display and search campaigns.
“ONE RETAILER’S RESPONSE”
GameStop Technology Institute Senior Vice President Jeff Donaldson followed Fulgoni’s presentation with a real-world example of his company’s response to the digital revolution. GameStop operates more than 6,600 video game and technology brand stores worldwide, making it the dominant leader in the global video game category. A $9 billion retailer across multiple business platforms, GameStop’s business model focuses heavily on customer loyalty, with more than 41 million global members in its PowerUp rewards program, accounting for 71 percent of total sales for the company.
According to Donaldson, although only 3 percent of GameStop sales actually take place online, 60 percent of customers go online to engage, and 26 percent of non-buyer, online visitors buy in-store within 48 hours – an event referred to as a “motivated visit.” The opportunity, Donaldson explained, is to deliver more meaningful, more productive digital engagement solutions to more customers.
The GameStop Technology Institute (GTI), launched earlier this year, focuses on using data research and analytics to achieve that goal through geo-fencing and the creation of “digitized markets” to improve and synthesize the customer experience both online and in stores.
GameStop’s innovative geo-fencing technique, which causes the company’s mobile app to behave differently within a certain geographical radius, allows the company to test new digital experiences in a controlled environment.
“Geo-fences are used to collect data on how customers traverse the market, and message them as they traverse the market,” Donaldson explained. “To this point, we’ve found it more effective to analyze the data and understand how they traverse the market, than it is to message them.”
Through digitally delivered messages, GameStop aims to understand what is most important to customers and what creates a motivated visit to a physical store. As part of the efforts to synthesize in-store and online customer experiences, GameStop is currently testing ways to capitalize on the unique benefits of each platform. For example, how can successful employee-delivered messages be delivered digitally? What “product page” messages online trigger conversion and how can they be implemented in-store? The goal, Donaldson elaborated, is to outfit physical stores and markets to create a platform for engagement and data collection equivalent to the online experience.
With much work to still be done according to Donaldson, specifically addressing privacy concerns with customer data, GameStop’s current focus is on improving conversion via digital engagement.
MERGING ONLINE AND OFFLINE EXPERIENCES: AN OMNI-CHANNEL EVOLUTION
The conference’s second day focused on the latest tactics and research in the field of retail analytics, as Performics CEO Michael Kahn and Kohl’s Vice President of Strategic Marketing Chris Duncan presented on the agency/client partnership in the evolution toward an omni-channel experience.
A veteran of the market research industry, Kahn emphasized the journey towards omni-channel is ongoing and evergreen, with the goal of integrating and tracking customer data across all channels and platforms. Across the retail industry as a whole, the major barriers in implementing this approach come from the lack of appropriate technology and insubstantial addressable data sources.
In working with Kohl’s, Performics aimed to overcome these obstacles by focusing on the data that matters – namely, the data that uncovers customer intent, accomplished through PlanAlytics and digital maturity mapping.
PlanAlytics is the process of identifying intent and applying that insight toward improving brand engagement to drive measureable performance. The PlanAlytics process involves an initial intent hypothesis, a refined initial hypothesis, followed by testing, learning, and scaling with the help of analytics.
Digital Maturity Mapping uses business intelligence, predictive analysis, audience-centric advertising and fully attributed media to bridge the gap between e-commerce and brick-and-mortar stores. To illustrate the concept, Kahn pointed to Walmart’s recent trend of adding digital elements in-store to make shopping a more holistic and cohesive experience. Conversely, Amazon is shifting into the physical space by opening drop-off/pick-up locations for customers.
In order to demonstrate Kahn’s concepts more vividly, Duncan shared Kohl’s journey towards omni-channel from the retail giant’s perspective. Although Kohl’s was a relatively late player to the digital and mobile game, the retailer is now an industry leader in the omni-channel evolution, with an innovative mobile app, the recent “Buy Online Pickup in Store” (BOPUS) campaign, and the integration of Kohl’s Charge into ApplePay and the iWatch planned for later this year. The upcoming ApplePay integration will make Kohl’s one of the first department store credit cards to embrace the new technology. These efforts, according to Duncan, bring the company closer to the ultimate goal of bridging that gap between online and offline experiences.
The integration process, however, has not been seamless. Measurement is more complicated than ever, with Kohl’s currently in the midst of a more than 18-month-long initiative toward measuring all media touch points and all customer sales. Too, omni-channel development requires significant allocation of time and resources across all facets of a company. But with more than 80 percent of Kohl’s online purchases being multi-touch conversions, alignment across all platforms has never been more important.
“A lot of what we’re doing today can’t be trained, can’t be taught in the classroom,” Duncan said. “Finding the best people and talent to make omni-channel successful is the biggest challenge.”
“It’s hard to find the talent because the playbook is being written live,” Kahn added.
BRINGING DIGITAL METRICS TO RETAIL ENVIRONMENTS
Northwestern Professor Martin Block and Steven Keith Platt, Director and Research Fellow at the Platt Retail Institute, presented their recent research regarding the collection of real-time, in-store customer traffic data and the impacts it can have on increasing sales and lowering operating costs.
Customers, the single most important aspect of running a retail business, are also the one piece that companies have struggled to track while in-store, according to Platt. But by tracking “pings” from Wi-Fi-enabled mobile devices, retailers can trace the location and path of customers as they move about a store, gaining valuable insights into a number of different areas. Mobile devices continually emit the pings in an attempt to identify available wireless networks. By gathering the data from these signal requests, it is possible to generate device IDs, XY coordinates, and time of detection for customers in the store.
The location-based customer data serves a variety of purposes, including real-time insights about consumer behavior in stores, sales conversion, and internal operational performance. Store traffic performance and patterns, signage effectiveness, dwell time, and promotional campaigns can all be assessed to pinpoint weaknesses and inefficiencies across all aspects of a retail operation. By using technology that is already in place, Platt and Block contend, the brick-and-mortar stores can be integrated into an omni-channel campaign relatively inexpensively, as customers bring their own tracking devices with them.
The conference wrapped up with a final presentation by Professor Don Schultz on “The Future of Retailing,” briefly touching on emerging projects such as artificial intelligence, drone use in retail, and the exploration of neuroscience to unlock the consumer’s brain.
Other session topics covered over the course of the two-day event included Educating Customers Online for Stronger Brands and Loyalty Programs: Beyond Expensive Monetary Rewards.
Click here to see the speakers from the 2015 Program.[/vc_column_text][/vc_column][/vc_row]