IT Hot Buttons

Top priorities in 2013 include marketing/IT collaboration and social analytics

From mobile payments to mining big data for customer insights, savvy retailers are using all the tools at their disposal to engage and connect with shoppers and provide relevant, convenient and personalized shopping experiences across all channels.

As retailers competitively position themselves for growth in 2013 and beyond, there are a number of hot buttons or key considerations that will be driving their strategies. Here is a look at some of the top ones:

Marketing and IT collaboration

Reaching today’s digitally connected, channel-surfing and social network-linked customers requires a certain set of skills — and it also requires something that, until very recently, was almost unheard of in retail: close collaboration between IT and marketing.

A recent survey by IBM drives the point home: Sixty percent of marketers point to their lack of alignment with the company’s IT department as the biggest obstacle to reaching today’s consumers.

“This research indicates that as new channels continue to mature and consumer habits evolve, marketing and IT have no alternative but to emerge from their traditional silos and form a strong partnership that puts the business in a position to succeed,” said Yuchun Lee, VP, IBM Enterprise Marketing Management Group. “CMOs and CIOs, an ‘odd couple’ in some respects, will be the catalysts in forging this union and enabling the types of personalized multichannel brand relationships that today’s customers demand.”

Some retailers are already making the leap, from Saks Inc. to Macy’s to Guess?, all of which are working to blend the expertise of their CMOs and CIOs. Supermarket retailers are also making the leap. Similar to many other retailers, Salt Lake City-based Associated Food Stores’ IT and marketing teams historically operated completely separate from one another, occasionally joining efforts on separate projects, according to Jason Sokol, the company’s director of marketing.

But all that changed when the company began exploring a new loyalty program that would allow them to tie actionable data back to consumers.

The team chose a platform (from Accelitec, Bellingham, Wash.) that allows it to deliver targeted promotions, email marketing and electronic daily deals, similar to those found on Groupon or LivingSocial.

Associated launched the program in its Macey’s banner in October and had 50% of its shoppers using the program in less than two months, greatly exceeding its goal. Associated expects to deploy it within additional corporate and membership stores. The IT and marketing partnership has been and will remain the driving force behind the rollout, Sokol noted.

Social Analytics

Social media is becoming such a strong part of the customer experience that 86% of best-in-class retailers are using the channel as an interactive touchpoint, according to Aberdeen Group. Yet, retailers still struggle with how to track social media activity and its impact on sales. To avoid operating social channels in a silo, retailers are applying analytics.

Apparel retailer Caché understands that social media is a critical component needed to create an intimate shipping experience between the shopper and the brand. Besides appointing a social media manager dedicated to bolstering social media presences across sites such as Facebook, Twitter and Pinterest, the retailer is working on a community site, or a portal that will incorporate social elements, including blogs, product reviews, a social Q&A page, “look books” and links to social media pages.

The company is also delving into analyzing activity occurring on the portal through an integrated reporting tool from its New York City-based mobile provider Usablenet. All pages are tagged with code. As users share photos or comments with friends on their social media pages, a dedicated URL is published on users’ friends’ social pages. As these friends click on the link, the tagging solution captures the conversion back to the site.

A dashboard gives Caché users insight into what shoppers shared, how many people they reached and new sales from connections. They can also look at specific timeframes and dates. The program will launch during the first quarter.

Digital connections: the omnichannel imperative

The Web has helped retailers break down the proverbial store walls, allowing shoppers to interact with brands any time of the day. And with consumers quickly adopting emerging digital solutions, retailers have gained new ways to interact with them. It also makes it easier for retailers to connect with shoppers throughout the shopping experience, both at home and at the store — the key to a successful omnichannel experience. Now retailers are evaluating how to leverage these solutions at store level to improve the in-store experience.

“Digital solutions are what retailers need to revitalize the store experience, especially as more millennials enter the marketplace,” said Eric Olson, VP education strategies, National Retail Federation, Washington, D.C.

Retailers are adding kiosks, digital signage and proprietary mobile solutions to interact with shoppers as they make purchase decisions at store level. But it is consumers’ personal smart devices that could expand customer engagement. The technology helps chains localize conversations, promotions and pricing — all efforts that build loyalty.

Hallmark Gold Crown leveraged the personal technology to deliver a digital catalog of its popular line of Keepsake Ornaments. Created with Bangalore, India-based Infosys, the book is available online and through a downloadable app.

Walgreens, Deerfield, Ill., made a similar move with its new mobile loyalty program, Balance Rewards. Supported by a mobile app, shoppers show their digital membership card during checkout to earn loyalty points.

The Mobile Store

Digitally connected consumers begin their shopping trip well before setting foot in a retail store, often with much more knowledge than the average store associate — a crucial point forcing retailers to embrace the power of mobility at store-level. But mobility involves two paths — consumer-driven or employee-assisted.

On the consumer-driven side, retailers often launch apps that enable shoppers to browse merchandise, scan bar codes or QR codes to learn more about inventory and, with the help of Near Field Communication (NFC), pay for purchases. Seattle-based Starbucks pioneered this process through its Starbucks Card Mobile. The free app enables users to input pre-paid gift card account numbers that act as a virtual wallet and pay for purchases. Recently, Dunkin Donuts joined the game with its own mobile app. Besides supporting mobile payments, it also enables users to design and share electronic gift cards with friends and family via text, email and Facebook.

Employee-assisted mobile programs put mobile solutions in the hands of associates, a move that is cultivating more informed sales associates who can help the shopper through the store-level shopping experience. During its recent POS upgrade, Finish Line, Indianapolis, added iPod Touch devices to the mix, allowing associates to conduct price checks, inventory management processes and check out shoppers anywhere in the store.

Big Data

As retailers adopt digital solutions, the amount of incoming data is swelling — and becoming difficult to manage and analyze with existing reporting tools. In fact, 40% of companies struggle with how to integrate this data within business processes, according to Aberdeen.

In its quest to improve customer segmentation, market basket analysis and real-time personalization cross-channel, Macys.com struggled to harness data volume coming from multiple digital channels, including online kiosks and attributes related to its 60,000 products. The solution: A high-performance BI tool allows analysts to build reports on products, marketing and merchandising as they compare current information with its historical database.

Besides gaining “a unified view of data and performance across our omnichannel enterprise, we more effectively measure the impact of online marketing initiatives and how this translates into general sales, as well as sales by channel.” The automated report generation also saves the company more than $500,000 a year in comp analyst time.

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