Real examples and takeaways from marketers using data to drive results
Today's marketers must prove a measured return in sales on every dollar they spend. This poses a challenge and opportunity.
While retailers have been crafting messages with the goal of driving people to purchase online or in their stores, they often lack a clear strategy for doing it effectively, especially when it comes to coordinating all the channels of communication at their disposal.
This topic was very apparent in Las Vegas this week for Shoptalk 2019. The topic of data testing and learning is nothing new, but the pressures to make sense of how to effectively use the data has intensified.
Here, we recap some of the key insights from Shoptalk 2019 around how brands are actually using customer data to inform their marketing efforts.
Digital data informs physical experiences and inventory
A number of brands talked about their current (and eventual) strategies for bringing together online data to inform physical products and shopping experiences.
- At Nike, they’re using behavioral information from their running app to not only decide where to build stores but also to personalize that store with customers’ favorite products. It’s “information that comes from digital but pays off in the physical world,” said Michael Martin, vice president of digital products at Nike.
Michael Martin, vice president of digital products at Nike, discusses how they’re using information from Nike’s running app at Shoptalk 2019.
- Instacart Chief Business Officer, Nilam Ganenthiran, shared a future where grocery stores are laid out more in line with an online shopping experience—both from a customer experience point of view but also to generate better data and insights for the brand.
- DSW had similar views on building an in-store experience that would eventually look and feel more similar to online shopping. They’re working to “evolve our digital experience to be able to walk into our warehouse and have the same experience they have when shopping online,” CEO Roger Rawlins said.
This underscores the need for a frictionless experience—across channels—omnichannel that is omnipresent. Today’s customers interact with brands every single day in small (sharing their run through the Nike run club app) and big (coming in-store to buy the shoes they’ve been looking at online for six weeks) ways.
Brands need to start thinking of all these channels as being interconnected. They’re not separate, and they should all be built around a unified view of the customer.
Experiential selling is on the rise
We heard from a number of different brands building and using in-store experiences to drive loyalty and sales.
- In 2017, DSW launched a test of in-store nail salons in two of their Columbus, Ohio, area stores. Roger Rawlins, CEO of DSW, said that they started seeing customers that used the nail salon services were coming twice as often, and they were inclined to spend more with the brand.
- Kroger also recently launched an in-store experience dubbed “The Treasure EmporiYum,” that highlights their private-label products. It seems similar in concept to Trader Joe’s Frequent Flyer program but built out as an in-store experience where shoppers can immediately pick up and purchase the highlighted products. And it’s been successful; Gil Phipps, vice president of branding, marketing and our brands at Kroger, said sales of private-label products featured in the experience have gone up 57% on average.
- Madison Reed, an at-home hair color solution, expanded into physical salons in 2017. Although still limited in scope with only a few locations in New York and California, the brand uses its deep customer knowledge to inform and optimize the in-salon experience. All of their customers take a 14-question quiz online to inform their at-home hair color choices. This information is then used for in-salon appointments as the stylists already know a client’s hair color background before they even sit down in the chair, helping to focus the consultation conversation and cut down on appointment time.
Although all of these have a bit of a “fun” factor in concept, they’re all worth mentioning because they’re producing real business outcomes.
Retailers are at an inflection point, along with the massive growth of e-commerce, finding ways to drive store traffic will continue to be a priority and will challenge traditional brands to either thrive or fall way behind the upstarts in both growth and connection with consumers.
Data-driven insights create more value for the brand and the consumer
For digitally native and DTC brands, data-driven insights are foundational to their customer experience. And it makes sense—they started in a far more data-driven, customer-centric era, always with a direct line to engage with the customer.
This advantage was very apparent at Shoptalk 2019, where pure-play and DTC brands shared examples of how they’re building the business around the customer and using data-driven customer insights to improve that experience.
- Stitch Fix shared an example of how they used feedback on men’s shirts. Nearly 20% of their feedback from male customers said that their shirts were too short. The Stitch Fix team was able to marry the feedback with actual customer profiles to understand that this was coming from men in their larger size ranges. With this information, they worked with vendors to actually change the design of the shirt to for better proportions on larger sizes.
At Shoptalk 2019, Chris Phillips, GM of Stich Fix men, kids and exclusive brands, shared how they used customer feedback to remake men’s larger-sized shirts.
- Meal delivery startup Freshly shared similar views. “In its most simplified form, data is information,” said Michael Wystrach, CEO and cofounder of Freshly. “And for us, it’s information on our customers.” He likened Freshly’s approach to Netflix’s algorithm for delivering content; they use machine learning to recommend new products to consumers—taking into account user ratings, customer profiles and past meal skips from the customer. But the customer needs to understand that providing more data will only improve their experience. “That’s the power of data when properly used for the customer,” he said. “That’s the intrinsic value that customers are looking for.”
While the brand is important, a culture of experimentation with clear attribution and measurement behind every dollar spent is central to how these brands not only run their businesses but also attribute success to marketing initiatives.