Retailers are increasingly buzzing about the value of customer data and the way to act on it. Earlier this month, I was on a panel with NCR, IBM and Accenture, on which we covered the state of big data in the context of retail, and what’s happening today versus tomorrow. There was the normal conversation on terabytes and petabytes and how big, “big data” really is. But we also discussed the ways in which companies need to evolve their organizations, to rethink the value of data collection.
The interesting thing is that in discussing social media as well as, online and purchase history data, there is a less discussed data source whose value is just being discovered: in-store intent data. In online data collection and optimization, we’ve known for years that the products you’re considering for purchase, but haven’t yet, are the most valuable. By comparison, purchase history and POS data tell us what the customer has already bought. In the realm of big data, all of this is helpful—but when it comes to providing immediate value and increasing future sales, data about consumer intent and browsing behavior rule the day. Why? Because if you just bought a purple shirt, you’re unlikely to buy another one tomorrow; but if you’ve been browsing it, there is opportunity for a retailer to assist you in finalizing the purchase, thus extending your relationship with the brand.
Online makes it easy to collect browse and intent data. Every pageview and click is tracked and monitored. But online sales only represent about 10% of sales online globally, with the other 90% still in a physical store. That means that as much as 90% of the most valueable kinds of customer data—browse and intent—is currently untracked and un-optimized. The chances that a customer will complete a purchase of a product he or she has touched, tried on, or taken for a test drive are much greater than pictures on a computer screen, and yet we’ve failed to collect these insights.
With this in mind, let’s consider the role and priorities of the global retail sales force. Today, they are still operating on a “before Big Data” (BBD) incentive. Each sales associate is encouraged to compliment the customer and do all that it takes to sell that purple shirt before she walks out the door. It’s generally an all-or-nothing game. Either the sales associate sells the shirt and makes commission, or he doesn’t make anything. On a good day, he may sell 10 shirts at $100 each, making $1000 for the retailer. But what if instead, those customers purchased nothing that day in the store? It might sound like a down day, but not in the new world of intent data collection in the physical store, in which we can imagine each customer walked in, engaged with a sales associate who assisted his or her exploration with content, devices and information. In the educational process and brand story telling, the customers worked with the sales associates to build a digital collection of everything they looked at and experienced. In the end, to receive this digital token of their time spent in the store, the customers gave their email to receive it—so instead of ten shirts sold, it’s ten email addresses collected from highly interested customers.
I’ve not yet had a retailer tell me that they’d choose the shirts today over the lifetime value and future purchase potential of the digital collection; it’s just a matter of incentivizing the customer to willingly provide their information. On my panel, we all agreed that the metrics and incentives for the value of the physical store are outdated. Asking someone for her email address at checkout, with no clear value proposition for the customer, doesn’t do the trick.
With more people researching and purchasing online due to convenience, the value of the physical store experience must be tracked and incentivized properly. Sales associates should share in the understanding of the value of data and engagement over only pushing product, and their pay and incentives should reflect this. With all the investment in mobile POS, there should be as much, if not more, excitement surrounding in-store, pre-purchase customers intent data capture, made possible through the use of technology.
Experiential retail is here. We need incentives around encouraging participation in a way that matches up with value creation in sales and data collection.