Oct. 2, 2011
The data-driven retail revolution of today has significant implications for the traditional creative agency. As customers increasingly demand personalization and communications move from a mass-marketing model to one-to-one relevance, a new paradigm is emerging. Data-driven insights are creating a new language for retailers and marketers to deliver personalization and the tools to break traditional agency rules.
During the advent of retail, the corner-store manager knew his loyal customers. He knew what they liked and didn't like, what they tried and bought again and the items they routinely purchased during each trip. He spoke with his customers about their preferences and their unmet needs. These store managers and their businesses thrived on this personal, intimate engagement with their customer.
As retail evolved, business decisions were weighed on two-dimensional measures such as product and category performance, customer acquisition and profit. Twenty years ago, these retailers only understood their customers through the perspective of their business and often didn't have the tools to identify who their loyal customers were. Brands served as the liaison between retailer and customer, communicating information collected through focus groups and demographic studies to retailers and creative agencies.
The recent transformation at retail is helping businesses use data to deliver relevance throughout the shopping experience, at every touchpoint along the path to purchase. It is changing the way businesses understand their customers and traditional communications channels. Knowing how, when and where customers want to be communicated with is breathing new life into creative briefs, and making the output of these communications more effective and more consistent.
To put it simply, smart retailers empowered with granular sophistication, are working their way back to the customer-retailer relationship of the corner store.
Better input empowers better output
For decades, creatives have relied upon various types of data to guide their decisions. This understanding is often a culmination of a creative director's gut feeling and branding standards derived from focus group data, viewership studies or demographic profiling. Today, the focus group — regardless of size or depth of the study — has been optimized by something far more powerful: purchase data representing the actual preferences and real behaviors of millions upon millions of customers. While focus groups and demographics can help add color and background, they can drive generalizations of an "average shopper" that can be easily replicated by competitors.
For example, most of us have come across a brand that wants to "talk to moms" via a personification of their target we'll call "Jane." A creative brief will often read, "Jane is a high-powered mom concerned about her health and the well-being of her family, but is also busy, so convenience is important to her."
In the new retail-marketing paradigm, a creative brief using data-driven insights would never make personal assumptions about Jane unless she tells the retailer directly. The truth is, we don't know if Jane is purchasing a product because it's convenient for her, so, we speak to Jane using language that we do know. Defining customers by their behaviors ("you are what you buy") is a more accurate measure of the customer's needs and wants. By more intimately understanding how the customer behaves, the retailer is more likely to be more relevant.
A new retail language
In the traditional marketing paradigm, retailers often tell customers how they wanted them to behave and what they wanted them to purchase. In the quest to capture new purchasers, many marketing messages today still assume that their target is a non-user of the product without discriminating in advertising or promotions.
As more retailers begin to understand the benefits of focusing on loyal customers instead of acquisition strategies, the creative can play an important role in reinforcing trust within the customer-retailer relationship. Moving away from "random acts of marketing," data-driven creative empowers retailers to overcome "you don't know me" and achieve "you really get me."
A new retail language is emerging: "Thanks for coming, if you need anything while you are here, we are here to help you as you need it." The new retailer voice is slowly becoming smarter and softer using messages like "Thank you" and "Congratulations," and avoiding language like, "Try now!" When messaging is directed to current users, common calls to action like "Try Me Today!" simply don't make sense. Even new product introductions are beginning to use a more subtle tone to appeal to customers — the way we talk to people we know.
Personalizing the message
In a traditional agency model, a direct mailer for laptops, for example, will speak to the largest common denominator of consumers. The objective and message of this ad assumes from the outset that everyone interested in purchasing a laptop will relate to that broad, generalized message.
The new frontier for creative lies in the integration of pre- and post-purchase data with creative messaging. This type of data gives creative teams even more power to reinvent the creative brief with personalization and relevance, asking questions like:
- What type of music does this person like?
- What type of printer does he/she have?
- Are they a professional photographer? What kind of camera do they use?
- When did they make their last laptop purchase?
- Do they play games online?
Today, creative professionals are asking for that information and they're getting it. Each customer is getting a tailored experience, like never before, thanks to the power of data-driven creative and the willingness to go the extra mile to put it to good use. Instead of getting a generic laptop mailer, the customer receives a personalized laptop plan that addresses all of their preferences.
Recently, dunnhumby partnered with a retailer to send 518,000 versions of a sales circular to just over 525,000 customers. Virtually every customer received a book customized to his or her interests. The content and order of pages was based on the category of products each customer bought the most. While it took extra creative effort from the retailer to photograph and style more items and to create extra pages to better fit individual customer needs, the effort paid off in relevance, response rates and even in higher open rates for subsequent sales books.
A new breed of creatives
Today, copywriters and graphic designers are able to access vast amounts of purchase data to help them effectively communicate with a retailer's best customers. These savvy creatives know how to ask the right questions. They know how data can best be used in the creative process and they know when they have the right answers. For instance, price-points, brand names and a customer's habitual total-purchase sizes can help to inform decisions regarding imagery, cooking recipes and overall content within an article or promotion.
The next challenge for retailers will be to engage their creative partners to evaluate communications based on criteria such as:
- What type of data have we traditionally leveraged to communicate with our customers?
- Is this creative relying on insights from shopper behavior data or "average" customer data?
- Are we successfully communicating with our customer from a customer-centric point of view or is the data supporting a brand-centric perspective?
- How will this creative be integrated across channels in order to achieve consistency and reinforce trust with this customer?
The data-driven creative transformation is already driving substantial response rates as compared with traditional agency standards. As new forms of data continue to provide a comprehensive view of the customer throughout the path to purchase and across channels, the creative agency can expect continued evolution.
Stewart Logan is senior vice president, communications and media, at dunnhumbyUSA, responsible for overseeing the creative strategy and execution of data-driven customer communications, managing the design, copy, production and quality assurance functions throughout communications campaigns. Logan's contributions in this role include leading the launch of the first loyal customer mailer for The Kroger Co. as well as producing The Kroger Co. publication, MyMagazine. (Photo by Michel Ngilen.)