Retailers no longer have to fight with politicos for commercial time, and fresh from voting, many consumers are ready for their next big to-do. As evidence, Deloitte found that one quarter of the 5,000-plus consumer respondents to its 27th annual holiday survey planned on waiting till after the election to plunk down any holiday green.
And these shoppers are savvier than ever, toting smartphones into stores for quick comparative price checks and product reviews, for example, and shopping across channels in the never-ending search for the best deal. Retailers that aren't keeping up can kiss their holiday upticks goodbye. Consumers may have a cheerier outlook about the economy than they did in 2011, but they're parting with their holiday dollars cautiously and spending less on gifts than previously, said Alison Kenney Paul, lead of Deloitte's US retail and distribution practice, during the "2012 Holiday Spending Predictions: Using Analytics to Respond to Retail Trends" Webinar hosted by the International Institute for Analytics (IIA) last week.
On the plus side, as consumers hop across the shopping universe, they're leaving digital bits behind at the point-of-sale and digital cash registers. Retailers capable of capturing and analyzing the data will be able to better compete for the limited holiday budget, plus influence additional purchases and gain loyalty, said Sarah Gates, vice president of research at the IIA and fellow presenter during the IIA Webinar.
Retailers have three distinct opportunities for how they can capitalize on analytics during the holiday season -- or any other time, for that matter, Gates noted. "The first is to get closer to their customers, second is to be more relevant, and final and third way is to anticipate what will happen -- be predictive rather than just reactive."
These messages aren't new, of course, and examples of how retailers are benefiting are out there. Gates shared several.
- Macy's and Williams-Sonoma are masters at delivering relevant messages to their customers, Gates said. At times, for example, Macy's sends out 18 million unique emails and 500,000 unique versions of a single direct-mail catalogue. Meantime, Williams-Sonoma matches its customer database with external data on 60 million households, matching up income, housing value, number of children in the household, and other such data. It then uses that dataset to drive highly targeted email and direct-mail campaigns. Updating the analytics twice weekly helps the specialty retailer keep up with changes in consumer behavior, Gates said. And response rates for email campaigns done this way are 10 to 18 times higher compared to generic mailings. "It gives customers an offer that aligns with what they want to purchase when they're most likely to purchase it."
- Hot Topic, a trendy clothier for young adults, is an example of a retailer that really understands its channels. Using analytics to test different approaches for sending offerings, for example, it's discovered that combining email with text messaging ups the response rate of email alone by a factor of 10, Gates explained. She also noted that Hot Topic analyzes effectiveness by day and time of day.
- S-Group, a Finnish retail cooperative, stands out for its work optimizing stock. With its analytics models, it produces 40,000 unique plan-o-grams three times a year, according to Gates. These reflect category-specific and location-specific product mix and demand forecasts. With this capability, plus the move into e-commerce, S-Group has increased its market share by more than 30 percent since 1990.
- Cole Haan, high-end fashion retailer, gets a nod for its smartphone smarts. Earlier this year, it began outfitting store clerks with an iPhone app that gives them instant insight about a customer's prior purchases, product preferences, and personal attributes so they can make on-the-mark recommendations on the spot. "In fact, they can deliver pictures of what they've already purchased along with pictures of what they're looking at so they can see how it all works together." Since introducing the app, Cole Haan has seen the number of purchases made by its "BlackBook" clients rise by 50 percent.
As a shopper, understanding the behind-the-scenes analysis makes me a little wary of any "fantastic" retail offer I might receive. How about you? Have you started your holiday shopping, and, if so, have you had a great experience? We'd love to hear about it.