Speakers at the recent Internet Retailer Conference & Exposition in Chicago discussed how the retail industry is using a number of digital technologies to assist performance in areas such as CRM, marketing, driving customer traffic and converting sales. Following are a few brief highlights:
Liberty Jane Clothing, an online specialty retailer of clothing and accessories for American Girl dolls, uses the Pinterest social platform to give its customers an inside view of the company and create a more personalized relationship with them.
"You can create an authority profile and become a visual Sherpa for your niche," said Jason Miles, co-founder and marketer of Liberty Jane. "You can give a visual insider’s view of the company. It’s a nice way to get close to a customer or run a contest."
Miles recommended that retailers use third-party Pinterest analytical solutions to track current hot topics on Pinterest and see what type of traffic and participation the platform is driving to their e-commerce site. He also said retailers should take advantage of the new "Rich Pin" functionality that allows pins to contain more metadata. But he said social media activities should not occur in a vacuum, using Facebook as an example.
"If you spend money developing Facebook fans and don’t move them through other platforms, you’re in trouble when Facebook goes out of vogue," said Miles.
Brooks Brothers is connecting data to the customer experience in order to replicate the highly personalized shopping environment of its stores on its e-commerce site.
"We are connectors. Our job is to connect data to the customer experience with a software package," said Cindy L. Lincks, director of analytics for Brooks Brothers.
For Brooks Brothers, this package includes the Adobe Target, Analytics and Scene 7 solutions.
Aided by Adobe technology, Lincks said Brooks Brothers uses CRM data to define customer groups and map out customer touchpoints. The company then automates cross-departmental reporting and frequently adds Web metrics to better support its business intelligence software.
"It’s not just what appeals to the masses," said Lincks. "It’s meeting individual customer needs as they move through the site."
PetFlow, a pure online player, found that its initial efforts to expand its marketing activities to Facebook didn’t work out so well.
"Google is not like Facebook — the consumer is searching with purchase intent," said PetFlow co-founder Alex Zhardanovsky. "Facebook users aren’t sitting there with a credit card on their desk."
After initial efforts to develop Facebook fans and convert them to customers wound up costing $300 to $400 per customer, PetFlow started targeting its core customers, who were higher-income female animal lovers age 40 and older, by targeting consumers who had "liked" other retailers such as Amazon.com, Saks and Neiman Marcus. Within two months, PetFlow jumped from 10,000 to 200,000 Facebook fans.
To convert those fans into customers and evangelists, PetFlow began running funny ads with cute animal photos that customers voluntarily reposted, liked, commented upon and shared, vastly extending the reach of the ads at no extra cost to PetFlow.
"Facebook advertising lives on," said Zhardanovsky. "We’re still generating sales from ads we posted months ago."
"If you spend money developing Facebook fans and don’t move them through other platforms, you’re in trouble when Facebook goes out of vogue."
— Jason Miles, co-founder, Liberty Jane Clothing
Any good retailer gets to know its customers, and not just their product preferences but also who they are, where they come from and what they aspire to. This type of intimate knowledge allows retailers to forecast and meet product demand with the highest degree of accuracy.
However, getting to know your customers is not a one-shot deal. It is an ongoing effort that requires refinement and readjustment as the demographics of your customer base change, both as new customers arrive and existing customers undergo socioeconomic changes.
Curacao, a Los Angeles-based regional department store serving a primarily Hispanic customer base, uses a Web-based mapping analysis tool from marketing intelligence provider Geoscape to help analyze and keep abreast of cultural shifts among its consumers, which can have a significant impact on demand forecasting. The retailer selected the solution, SaaS-based Geoscape Intelligence System software, based upon the recommendation of marketing companies that said Geoscape solutions were able to segment customers by acculturation.
"A 2010 company review of business models included analyzing current customers, those who hadn’t shopped us in the previous six months and 24 months, and those who never shopped us at all," said Rick Hutton, president, Curacao Retail Group, which operates 11 locations in Southern California and Arizona. (Stores average 100,000 sq. ft. each, and while heavy on consumer electronics and appliances also sell furniture, jewelry, cosmetics, toys and apparel.)
Using the software, Curacao also measured its penetration of its customer base within one, three, five and 10 miles of its stores. The retailer found that while it had 60% penetration within five miles of stores, it was still failing to draw a significant number of potential customers who lived near its stores.
"To grow, we needed to reach out to customers who had not considered Curacao a shopping option," said Hutton. "We needed to not just meet general needs of our existing market, but meet the needs of customers as they acculturated and not let them graduate to Best Buy and Target as their options expanded."
According to Hutton, Curacao discovered it was doing extremely well with Hispanic customers who fell into categories defined by Geoscape as recent immigrants dependent on speaking Spanish who do not speak much English at home. But the chain had room for improvement with more acculturated Hispanic consumers, meaning they are born in the United States, and celebrate Hispanic food and culture but may not speak Spanish.
As a result of the findings uncovered by the Geoscape technology, Curacao has since modified its product assortment and advertising to better attract Hispanic consumers who have become more enveloped in mainstream American culture.
"We now carry more TVs than any competitor," explained Hutton. "For computers we had carried Dell, HP and Asus, but we added Apple. For refrigerators, in the past we were known for customers buying brands like Whirlpool and Frigidaire on credit, but we added higher-end brands like LG and Samsung. LG is now the No. 1-selling refrigerator brand in our stores."
Curacao also has expanded its jewelry and cosmetics assortments to include such luxury brands as Armani, Coach and Prada at the same prices as other department stores.
"We offer the same products as other stores," said Hutton. "Our customers expect to find the best products at market price."
Curacao’s highly successful private credit program, which more than 90% of customers participate in, also helps the retailer track the success of its efforts to reach a broader cross-section of Hispanic consumers.
"In 1991 less than 2% of customers who filled out a credit application in stores were born in the U.S.," said Hutton. "Last year it was more than 50%."
Curacao’s implementation of Geoscape Intelligence System’s analytical modules was completed in 2012, and the chain has continued making changes both in product assortment and advertising. Beyond dropping the Spanish "La" from its name last August, Hutton said there have been other adjustments to how Curacao communicates its brand to the world.
"It’s more about brand, less about price advertising," Hutton said. "It’s less about understanding data than about understanding how to reposition the company."
Other noteworthy changes Curacao has made to its brand image and messaging based on Geoscape analysis include introducing a new logo in January of this year, engaging in bilingual TV, print and catalog advertising, and making product knowledge part of the reward consideration for customer associates.
Hutton said demand forecasting changes have mostly been made at a corporate level, but there are some individual forecasting decisions based on local consumer preferences.
"Customers in Tucson make more cash purchases but also have higher credit lines," he added. "There is a lot of across-the-border traffic, and Mexican shoppers want U.S. brands they can’t get in Mexico. Stores in San Bernardino, Anaheim and Chino carry more modern furniture. Local taste has more of an impact in furniture. In electronics, demand is the same everywhere."
Curacao plans to use Geoscape-aided analysis and insight to help it continue to open new stores based upon a thorough understanding of customer wants and needs in the area. The retailer, which is considering possible expansion into Northern California, San Diego, Texas and Las Vegas, also plans to relaunch its e-commerce operation with a new platform and expanded assortment in the next few months.
"E-commerce demand has been the same as in-store demand since we introduced e-commerce in 2009," said Hutton. "We have had direct shipment and will add in-store pickup."
Ultimately, Curacao’s demand forecasting decisions will largely rest on an important piece of advice the retailer received over and over again during customer focus group conversations.
"People told us everyone knows you’re a great Hispanic retailer; focus on just being a great retailer," recalled Hutton. "It really opened our eyes."
In the Cloud
Maintaining a wealth of customer data has become a primary directive for retail IT departments. In recent years, retailers have been making substantial investments in solutions that collect and store data relating to their customers’ purchases, behaviors, preferences, demographic characteristics and almost any other traits you can think of. But after all this data has been captured, what do you do with it?
In the case of Chico’s FAS Inc., the Fort Myers, Fla.-based parent company of women’s specialty apparel retail banners Chico’s, White House I Black Market, Soma Intimates and Boston Proper, the answer came from the sky — in a manner of speaking.
"We had a rich customer database but couldn’t get to all the data," said Barb Brandon, director of CRM technology for Chico’s FAS, which operates more than 1,250 stores under its various banners. "We were looking for a way to capitalize on customer data."
Chico’s stored its troves of customer data on disparate servers with different applications. This meant the company had to send data out to external sources in order to be able to work with it. In 2008, Chico’s decided it was time to implement a single solution. However, at the time the retail operator was already in the midst of a very large enterprise-wide technology rollout.
"It caused a drain on the IT and infrastructure teams," recalled Brandon. "We didn’t want to rock the infrastructure more than we already were. That led to us seeking a SaaS-type cloud solution."
Chico’s had some very specific criteria for potential cloud partners. Most importantly, the company sought to partner with a cloud services provider that could also help it bring hosted data tools in house if needed.
"We didn’t want to commit to the cloud forever," said Brandon. "We wanted a partner, not a vendor. Vendors are easy to find. We wanted to find a partner that would bring us into their family and work with us."
With those prerequisites in mind, the retailer evaluated six vendors, dropping some because they did not offer cloud capabilities, and ultimately settled on SAS. According to Brandon, SAS’ strong commitment to R&D was a key factor in its selection of the vendor. Chico’s then partnered with the SAS On-Demand cloud team.
"We were not implementing an out-of-box solution," said Brandon. "So we determined a strategy to create a robust database with a set of tools sitting on top. The six-month implementation went fairly smooth. I was surprised how quickly we got it done with our very small team."
During the initial implementation, Chico’s rolled out SAS solutions, including Marketing Automation, which comprises Campaign Intelligence Studio, Enterprise Miner, Enterprise Guide and Business Intelligence. Since initial rollout, the retailer has also implemented the Size & Pack and Forecast Server solutions from SAS, and the On-Demand cloud team has maintained an active partnership with the retailer.
According to Brandon, the most important benefit Chico’s has received from using cloud-based SAS solutions is that technology has been placed in the hands of business users.
"Business users are operating the pedals and running the tools," said Brandon. "They understand the data better now. Having an integrated single source of customer data extends our capabilities as an organization. It’s pretty powerful. The partnership between the business and technology sides of the organization is rock solid. They couldn’t do without each other’s support."
In addition, Brandon said the ready cloud-based accessibility of data and technology has allowed the company to move from beyond simply being a data-savvy organization to one that approaches information with curiosity.
"We understand that when you’re digging in data, the question you ask is not the one you wind up answering," said Brandon. "You find 10 nuggets of information beyond the one you originally dig for."
Looking ahead, Brandon said that Chico’s will use cloud-based access to in-depth customer data to keep developing better insight into its customers.
"We will continue to understand our customer, how she thinks and behaves," Brandon added. "As we move into a multichannel world, this is where the power is. To know more about the customer and where she is and what she wants. Chico’s is more focused on the customer than anyplace I’ve ever been. We want to use the cloud to optimize customer touchpoints and put tools in place to avoid ‘customer fatigue’ by creating the specific experience that each customer is looking for."