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Getting Personal
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Getting Personal

Retailers Mine Data to Offer Consumers Tailored Experiences

In an effort to hone in on what makes consumers buy rather than browse, retail science has gotten a little…sci-fi.

For brick and mortar stores, there are “technologies like heat cameras that track customer traffic,” says Stephen Wyss, partner in the Retail & Consumer Products Practice at BDO. “There’s WiFi to track people’s cell phone movement. And RFID device tags that track how often a piece of merchandise is picked up and put back on a shelf.” says Stephen Wyss, partner in the Retail & Consumer Products practice at BDO.

Online, MicroStrategy, a worldwide provider of business intelligence software, recently launched Wisdom Professional, a free analytical app that can explore the full spectrum of personal data contained in Facebook about consumers, including their demographics, interests, activities and preferences.  Facebook users opt in by liking the Wisdom page, and retailers can use the market research to better understand their consumers, and provide more targeted products and services.  The program complements MicroStrategy’s Alert platform, which harnesses Facebook data and promotes viral activity.

Microstrategy’s David Bieber, analyst, explains, “If I want to do a promotion with Facebook fans, I can use our Alert program to reach consumers (with offers, coupons, polls, etc.).  But before I begin the campaign, I can use Wisdom to create a psychographic profile that looks specifically at Facebook users’ age, educational background, income bracket, relationship status and more.  With Wisdom, I can merge the CRM (customer relationship management) and Facebook data and look at past transactions.  With all this aggregated information, I can personalize the marketing to that specific channel.”

"With all this aggregated information, I can personalize the marketing to that specific channel."

-David Bieber,

It sounds pretty high tech.  But analysts agree: this is the future of apparel retailing.

On average, consumers shop for clothes in stores about twice per month and online about once a month, according to the Cotton Incorporated Lifestyle Monitor™ Survey.  But 7 of 10 online shoppers abandon their cart, according to Forrester Research.  And according to a report from Deloitte, in-store shopping conversion rates are around 64%. However, when shoppers use a retailer’s dedicated app, brick and mortar sales jump to 85%.  This is where business intelligence can improve the odds.

Lori Schafer, executive advisor at SAS Institute and author of Branded!: How Retailers Engage Consumers with Social Media and Mobility, says analytics companies can help retailers by aggregating consumer information, letting them know about trends and guiding assortment planning.  And some of the newest creative tools retailers use include social loyalty strategies and in-store tracking.

Schafer points to SkuLoop’s new program that awards points or gift cards to consumers whose “likes” of a product lead to “shares” or purchases by other social media friends.  In stores, tracking programs like those from Euclid Elements and Wireless Werx send cell phone signals to store sensors to show which departments and products are attracting the most consumer reaction.

“Each cell phone’s unique ID shows retailers how many people walked past a certain area, how many actually stopped to view a particular display, as well as measure dwell time looking at the product.  The unique ID will show if the same person came back three times in one month — and what drew them.”

Even though 64% of shoppers get their apparel ideas from what they already own and like, 43% turn to store and window displays for direction, according to the Monitor survey.   And 33% get ideas from people they see regularly, while 29% use the Internet for inspiration.

Planet Retail’s Isabel Cavill, senior analyst, says that online retailers’ home pages and product recommendations serve as windows and displays.  But even these can be made more personal.

“Some really innovative examples include Modcloth, which offers the ‘Be the Buyer’ function — allowing the shopper to choose products that they would like to see stocked on the site,” Cavill says.  “Threadless.com allows shoppers to choose their favorite T-shirts and even design them — and then share them on social networks.  This type of engagement could help the retailer understand customers better and tailor product more effectively to demand.”

Shoppers are influenced by the recommendation of friends (53%), relatives (21%) and magazines (20%), the Monitor finds.  Slightly more than one-fifth of consumers (22%) say apparel worn by celebrities is “very or somewhat influential” to their own clothing choices.

“Celebrities have been used to attract people to brands for decades,” Wyss says.  “But these days they’re much more involved in the products they’re promoting.  People like Jay Z and Madonna are celebrities and also entrepreneurs — with creative control.  So these celebrities, influencers and curators — bloggers and fashionistas — are communicating with huge audiences via the web.  Any feedback that flows between the consumer and the personality allows retailers to get more personal information about what consumers like.”

Retailers have to walk a fine line when it comes to personalization, so as not to infringe on shoppers’ privacy.

Says Cavill, “This can be solved by shoppers reaching out to the retailer, rather than the other way round.  Personalization should be based on shopper interaction with the site, as well as the retailer’s Facebook, Twitter and other social network sites.”

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