Consumer Behavior
Data: The other Black Friday treasure chest
Brian Cluster, director of industry strategy, CPG and retail, Stibo Systems, reveals how Black Friday (and the surrounding weeks) isn’t just about cash profit anymore. It’s about building on relationships with consumers and establishing a new relationship entirely with a shopper. The key to building those relationships? Clean data.
November 26, 2020 by Brian Cluster — Director of Industry Strategy for CPG & Retail, Stibo Systems
Ask around the retail industry and you'll probably get different answers about why Americans call the day after Thanksgiving "Black Friday." Perhaps the most persistent legend is that Black Friday was the day retailers' profit sheets turned from red to black.
But in our new digital economy, that legend is being tested. Stores such as Target launched their holiday season sales Nov. 1 this year. The COVID-19 pandemic has accelerated the trend we've already seen in the retail industry — more consumers are snagging a great deal from their couch, and Cyber Monday continues growing in importance. The profit gathered on Black Friday is now spread out across an entire month.
With such a dramatic change in the way we shop, Black Friday (and the surrounding weeks) isn't just about cash profit anymore. It's about building on relationships with consumers — whether it is being reintroduced to a consumer that hasn't visited for some time to rebuild that trust and relationship, or establishing a new relationship entirely with a shopper. The key to building those relationships? Clean data. Here's why retailers that keep track of the master data they collected this November could see improved sales — and improved customer experiences – in 2021:
Understanding what promotions work and what promotions don't
When it comes to Q4, retailers have customers' attention. Buyers have gift lists to cross off, so once they find the right deal, they're incentivized to purchase rather than window shop. Once the holiday season is over, however, that pressure is gone. To drive sales from January-October, retailers must personalize offers and convince a customer they really must purchase an item before leaving the site.
The data gathered in Q4 can help in these personalization efforts, but only if retailers clean it and leverage it. Perhaps the best place to start is on the app — analytics firm App Annie estimates Android users alone will spend 50% more time on shopping apps in Q4 2020 vs. Q4 2019, with more than 1 billion hours invested. Those buyers are using promo codes, tapping push notifications and taking advantage of flash sales. We can track all kinds of data as they do — what specific promo code did they use before purchasing an item? Did they fail to convert for one sale, but follow through when the item was 5% cheaper? Are they shipping to their home or picking the item up at the store?
Data gathered during the holiday peak season can help guide marketing efforts throughout the year. Retailers can offer email and push notification campaigns promoting the brands those customers purchased in Q4. They can better craft suggestions for items the customer may be interested in. They can even determine what time of day to send an offer to best attract customer attention. Opportunities to gather this kind of data on this large a scale are few and far between.
Closing the deal on the web
Q4 can help us gather good data on what customers buy — but just as important is what they didn't buy, and why. It might be that the price wasn't quite where customer wanted it. But the sale doesn't always come down to price. Critical information may have been missing from the product page, e.g. product dimensions or photos, making the customer more hesitant to purchase the item sight unseen — especially with a very short window for returns before Christmas. The checkout process could also cause retailers to bleed customers; on average, 70% of shopping carts are abandoned, according to studies aggregated by the Baymard Institute. Hidden fees, lengthy forms and sign-in requirements rank among the most common reasons customers leave an item behind.
With so many customers flocking to websites and apps this holiday season, retailers can gather an enormous amount of data on how customers explore their site, and why they leave. Which products are searched for and viewed the most, but not purchased? That could mean incomplete product data. Are customers abandoning their cart on the final page before clicking "purchase"? Hiding taxes and shipping fees until that page could impact the final sale.
Retailers should use the browsing data they collected over the holiday weekend — and throughout this shopping season – to conduct intelligent, data-driven website and app renovation in early 2021. They can update product specifications, include more accurate product photos, and improve visibility into extra fees (better yet, remove extra fees!) early in the checkout process. Retailers that let data pinpoint important actions to take can improve their customer experience, building loyalty that helps keep their app on the customer's phone well past December.
Getting the most out of data
The data retailers gather during the holiday season can be invaluable, but it can also be worthless if not managed correctly. Often, customer data and product data sit in different silos, making it nearly impossible to conduct product and website improvements based on insights gleaned from comparing different types of data. Data also needs to be cleaned and updated continuously; individualized email offers are less effective if the retailer sends duplicate emails to a customer, calling into question their ability to safeguard data.
Retailers planning to leverage their holiday season data should consider solutions for managing the information overload. Investing in technology such as Master Data Management can break down data silos, giving retailers visibility into customer and product data through one system — and when retailers have a 360-degree view of their data, they can make more informed decisions about where improvements should be made. MDM also comes handy when making those improvements. For example, if size dimensions are missing from the product page for a coffee table, MDM can help efficiently and consistently syndicate the updated product information to all platforms where that table is advertised.
Holidays are a hectic time for retailers and their shoppers, but it's important to keep an eye on the future. Generating new rich insights from clean and trusted data using the trove of information collected through November, retailers can take more informed actions that will keep their customers coming back throughout 2021.
Brian Cluster is director of industry strategy, CPG and retail, Stibo Systems.
About Brian Cluster
Brian Cluster is Stibo Systems' Industry Strategy Director, specializing in the Consumer Packaged Goods and Retail industries. He has a strong 20-year track record of collaborating on strategy, building and delivering analytics, and business & digital transformation. At Stibo Systems, Brian is putting his varied industry expertise to good use, providing direction, strategy and relevant insights for our field teams and ·helping driving customer value for master data management solutions.
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