It’s put-up-or-shut-up time for Big Data in retail

It's put-up-or-shut-up time for Big Data in retail

Although they haven’t necessarily figured out what to do with the data they have or think they need, retailers are moving forward with Big Data.

“We are amassing massive amounts of data,” said Rob Schmults , vice president of e-commerce at Talbots, Inc. “With all the devices and the ways that people interact with us, sometimes it just feels like we’re drowning in this sea of data.”

Schmults spoke at the National Retail Federation’s Big Show, a recent gathering of 30,000-plus retail professionals in New York. Data was big on the agenda this year at a time when retail is evolving at warp speed.

A few universal considerations emerged during the four days of the NRF convention. The first was the idea of quickly getting the insights gleaned from data into the hands of those who can act on it. Second, it’s important to think about what tasks and decisions are best performed or made by a machine, and which are best left to humans. And third, retailers might have to rethink how they score success when it comes to determining the return on their Big Data and technology investment.

Some retailers are reporting early success.

Rob Koch is the vice president of real estate at The Fresh Market, a 170-store grocery chain that is upping its data game. During an NRF panel discussion on using data insights to drive sales, he talked about how an initiative with a third-party vendor is off-loading some manual work to software.

“We’re constantly hit with more questions than we have the man hours to respond to,” he said.  “My analytics team had turned into a reporting team.”

In other words, the team was so busy pulling numbers together that it didn’t have time to understand what they numbers meant. Automating routine reports cut fulfillment times from a half day each Monday to 30 minutes. “Now we’re focused on higher value questions that people come to the table with,” Koch said.

Third-party data has helped The Fresh Market fine-tune advertising and promotions to households based on its income and habits. “We know exactly where they live so we can target mail so much better,” he said. More relevant targeting has led to an increase in new customers and customers who shop more frequently. That translates into internal support for the analytics efforts.

“We’re finally at the point where we can prove internally to our decision-makers that the ROI is there,” he said. “We’ve seen our marketing budget increase dramatically.”

Ross Beaton, Rent-A-Center, Inc.’s director of customer analytics, said his company is able to take data tracking sales at various stores, break down key attributes of the neighborhoods in which the stores were located and come up with a seven-point checklist for where to open new stores. An internal found that stores that met certain standards produced 25 to 30 percent more revenue than those that didn’t.

“When we made that presentation to the executive team, a real trust developed about the decision-making process,” Beaton said.

Macy’s, Inc. has changed the way it looks at mobile shoppers based on recent data that shows that it’s nearly irrelevant whether a consumer start shopping on a smartphone or a desktop. Ultimately, they end up buying at the same rate.

“The smartphone is amplifying and improving the conversion for all our other devices,” said Darren Stoll, director of marketing analytics at, during his NRF presentation.

Macy’s found that shoppers who use both a smartphone and shop in stores are 75 percent more valuable than sing-channel shoppers. That insight has supported Macy’s development of a mobile website that is aimed at getting consumers quick, useful information — such as store locations and promotions — and a mobile app that focuses more on the shopping experience, storing customers’ likes and coupons and behaving, Stoll said, more like a “personal shopper.”

Despite the success stories shared by retailers at the NRF convention, many still struggle with return on investment. Retailers now rely on an arsenal of technology solutions, making it tricky to isolate the factors that drive sales.

“You have to try to minimize variables,” said Elaine Rubin, founder of Digital Prophets Network, LLC.  “I don’t think it’s entirely reasonable to assume that you are going to be able to isolate results from a single solution. You’ll have influence. You’ll see trends. You’ll see direction. And then you move from there.”

But standing still is not an option. Here are a few takeaways from the conference:

  • Recognize that we’re in the age of data-driven everything and everybody needs access to actionable information. Produce data in a form that your front-line workers can understand and act upon immediately.
  • Accept that no one has time to analyze all the data you collect. Embrace your machine overlords and identify tech solutions aimed at reducing the work that needs to go into analyzing your data.
  • Acknowledge that the metrics that you relied up on in the past might not be the measures of success for today’s world. For example, click-through rates don’t necessarily mean happy customers. But when combined with time on site, pages viewed and mapped to the path to purchase, individual metrics become more meaningful.

About the Author

Mike Cassidy, BloomReachMike Cassidy is the storyteller for BloomReach, a big-data marketing application company, and developer of the Personalized Discovery Platform. As a former business columnist for the San Jose Mercury News, where he shared the Pulitzer Prize for general news reporting with his colleagues, he chronicled the rise and fall — and rise and fall — of Silicon Valley. He writes regularly for the BloomReach Blog.

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