Listening to professionals in the area of shopper insights and marketing, it's easy for the uninitiated to get the impression that we've entered something of a Wild West era when it comes to bringing order to the information chaos that surrounds us.
Martin Hayward, former director of strategy
and futures at Dunnhumby, told RetailWire, "For
the first time ever, the speed and granularity of data available about shoppers
exceeds our ability to deal with it. Store and loyalty data is available hourly
for millions of shoppers and only technology can make sense of this volume
of data. As the technology improves, those with access to it will enjoy great
competitive advantage."
Recently, Mr. Hayward discussed his experience
with his former firm where the data feed from Tesco reached 4.8 billion pieces
of information per week. The ability to translate that information into actionable
insights quickly is key to success, but the process will become even trickier
as more data sources are added to the mix. These include:
- Loyalty cards.
- Financial transactions.
- Media consumption.
- Internet interests and transactions.
- Telecommunicaton behaviors.
- Consumer location.
- Medical history.
Target last week announced it was taking steps to more effectively manage its customer data in a deal with DemandTec (a RetailWire sponsor). Up to this point, Target has used the technology firm's services for tracking and assessing the effect various types of promotions and pricing had on individual product sales to forecast demand for future events more accurately. With this next step, as a piece on the GigaOM website pointed out, Target is looking to track entire market baskets along with consumer demographic data to more fully understand causal relationships in purchasing.
"As insight becomes more specific about the needs of smaller and smaller groups of shoppers so the relevance of pricing, promotion and assortment decisions for those shoppers increases," Mr. Hayward told RetailWire. "The new technologies being developed are building on the pioneering work on loyalty data analysis to add continuous decision making advice from the insight to make the insight ever more actionable at a store, category and shopper level."
Among the data sources that will prove a challenge for retailers in the future will be social media. "It's still in the early days but social media are just another source of insight about consumer attitudes that can be overlaid onto behavioral data," Mr. Hayward said.
Discussion Questions: How much of a competitive advantage would retailers have with the type of timely delivery of deep consumer insights promised in this article? Is the technology to pull this off within the range of most retailers today or is it still limited to larger chains such as Kroger, Tesco and Target?