Why retailers don’t need any more transactional data...
- 16 January, 2015 05:00
Our last day at the National Retail Federation in New York started with the usual parade of senior retail executives.
As the show has progressed the Microsoft account leads have got better and better at introducing us in the right way.
That’s really important because retailers that have arrived at our booth including Kohl’s, John Lewis, Staples, Macy’s and Tesco all have a very strong pedigree and are already more than capable of using data to target relevant customers with relevant messages. So we need to clearly articulate what makes us different.
VMob CEO Scott Bradley and I have spent the last three and a half days at the VMob booth. We have had a great deal of interest and success so with my final blog I will tell you why I think that is.
Retailers don’t need any more transactional data. They have loads of it and most of them have been using it effectively for years.
They have enormous CRM systems to manage it, very capable agencies to decipher it, and excellent marketing teams to build targeted campaigns around it.
But because most big retailers are now doing it, it doesn’t give them the same advantage it used to. Mining data, has become for retailers, what paying green fees is for golfers. If you don’t do it you can’t compete.
I think the reason the Internet of Things has been such a big theme is because the data you get from connected devices is not transactional it is contextual.
It gives you clues as to the lifestyle and future needs of your customers not a history of what they have bought. If you want to be relevant ‘right now’ then contextual data is actually far more important than months of transaction history.
Not everyone is using that kind of data so that is where the advantage now lies for retailers competing hard for foot traffic and dollars.
One of the greatest sources for this kind of data is the humble and now almost entirely ubiquitous smartphone.
Think of all those mobile apps out there in the pockets of all those customers. I don’t have the download numbers but I would guess that retailers like John Lewis, Target and Walmart would have millions of app installs each.
How many retail apps are installed on people’s phones is anyone’s guess but what I can tell you is that based on my conversations with retailers over the last few days, none of them are gathering contextual data about the lifestyle and future needs of their customers.
Walgreens pharmacy can use transaction history to tell which of their customers suffer from hay fever. What they don’t know is when those customers are near a Walgreens pharmacy on a day when the pollen count is high and the conditions are dry and windy.
If they did they could use the mobile app to target a message or offer that improved customer experience and increased sales. VMob can actually do that right now, which is why retailers at NRF 2015 were very interested indeed.