BJ’s seeks greater consumer insight with predictive analytics
BJ's Wholesale Club will leverage predictive analytics and machine learning to assist with buying decisions.
The warehouse club operator will begin using First Insight’s consumer-driven predictive analytics. The tools are designed to help BJ’s make design and buying decisions on the broad spectrum of products offered in its warehouse clubs.
“Providing the products our members really want at the right prices is critical to our growth strategy,” said Lee Delaney, chief growth officer at BJ’s Wholesale Club. “First Insight is helping us make sure we have the right products, including seasonal assortments, with the features and prices our members’ value.”
First Insight uses online social engagement tools to gather real-time preference, pricing and sentiment data on potential product offerings. The information is filtered through First Insight’s predictive analytic models to determine which products present the greatest opportunity. The solution will enable BJ’s to evaluate a greater number of products and reflect direct consumer input in their buying decisions.
“First Insight will help BJ’s make efficient operational decisions about product assortments that will benefit both the company and its members," said Greg Petro, CEO and founder of First Insight. "By introducing the voice of the customer through predictive analytics, BJ’s will increase their speed to market with trend-right products, targeted to their members.”
Study: Millennials don’t act — or shop — alike
Retailers need to update their approach to targeting millennials.
That's according to a new report by management consulting firm L.E.K., which provides insight into Millennials and their predecessors Gen X and the Baby-Boom generation.
"Savvy retailers who want to court millennials should think more about sub-segments than the whole population, and remember that at the end of the day it's individual consumer behavior that counts," said Rob Haslehurst, managing director in L.E.K.'s consumer products and retail practice, and co-author of the report, "Retailers Play the Generation Game: Lessons from Adapting to Millennials." "Millennials are sometimes treated as a monolithic group, although they're not, and it's often assumed that they behave the way young consumers have always behaved, which is a half-truth at best."
Millennials number 75 million — approximately 30% of the U.S. population — and account for approximately 90% of first-time mothers today, according to L.E.K. They spend about $1.2 trillion a year — one-fifth of the nation's total consumer expenditure. But preferences and behaviors differ notably from one millennial subgroup to another.
"By far the most important distinction among millennials is whether they have children, and their level of education," said L.E.K. Retail Practice consultant Shang Saavedra. Millennials with children and at least a college education spent sharply more than the next-highest spending group in several categories, she added, most notably home (68%), footwear (56%), electronics (52%), and apparel and personal care (49%).
To win over millennial consumers, L.E.K. suggests retailers do the following:
• Target sub-segments. Find the ones relevant to the brand and figure out how to meet their specific needs. Some millennial subgroups prefer to buy beauty and personal care products online. Online-only sellers can take advantage – and beat out grocery and pharmacy stores.
• Target the behavior, not the age. Some behaviors transcend generations. Electronics consumers are tech-savvy and shop in the same channels no matter what generation they're in.
• Personalize. Personalization pairs well with technologies that millennials like. Retailers can use artificial intelligence to drive personalization down to the individual level.
"Retailers have always had to adapt to new generations of consumers," said Haslehurst. "In the case of millennials – because they're a large, high-spending group – the need to adapt is particularly important. But the lesson is timeless – only those that adapt will survive."
The L.E.K. survey, comprised of 3,800 U.S. consumers, maps millennial preferences and behaviors, compares different millennial subgroups, and explores how Gen X and Baby Boom consumers behaved when they were the same age. To download the full report, click here.
Survey: 36% of shoppers made purchases on Prime Day
The third annual Amazon Prime Day attracted more shoppers than ever, with many attracted by personalized marketing efforts.
Thirty-six percent of respondents confirmed they made a purchase on Amazon Prime Day in a survey from Periscope by McKinsey, which conducted online research with U.S. shoppers to explore their attitudes and actions regarding the online giant's mega-sale. This was a substantial increase on the 22% who said they had actively shopped for Prime Day deals in 2016.
Interestingly, 34% of respondents were not aware of Prime Day last year. As to what motivated them to shop the event this year, 12% said that having received more personalized marketing messages from Amazon incentivized them to shop more. And 26% said this year they had encountered offers in more of the categories they were interested in shopping in.
Asked how their shopping behaviors had changed compared to last year's Prime Day, 12% of respondents said they had shopped across more categories in this year's event with a further 7% admitting to spending more money.
When asked to evaluate what most influenced their decision to shop on Amazon Prime Day, more than half (54%) of respondents said their priority was to check out discounts on items they already planned to buy. A further 28% were less discriminating, preferring to hunt down and evaluate the best promotions and discounts available across multiple product categories.
At the same time, a significant number of shoppers expressed skepticism about the benefits to them of buying something on Prime Day. Almost one-third (31%) of respondents stated that promotions are never on products they are interested in and, as a result, they did not engage with the event. A further 19% went on to say they viewed Prime Day as a "marketing trick" and that, in their opinion, pre-event price inflation was being employed to make deals on the day seem more appealing to shoppers.
Asked if they shop for discounts on Black Friday, 44% of respondents said this event had no appeal for them — a finding which indicates that, as Prime members, Prime Day was the motivating factor that attracted these consumers to open their wallets.
“While flash sales have become a fixture of online retail, enticing shoppers to part with their money using a combination of limited time, limited quantities and great deals is no longer enough to drive customers to buy on the day,” said Brian Elliott, managing partner of Periscope By McKinsey. “As these findings demonstrate, there's more to a successful flash sale than discounting some items or starting a countdown clock. To maximize the impact of time-limited online shopping events, retailers and brands need to use even more data analytics solutions to deliver an optimized shopping experience.”