How can retailers leverage big data and overcome loyalty card fatigue?
Retail has been a pioneering industry in the use of big data in loyalty schemes. But there are only so many loyalty cards people can carry in their wallets and many retailers don’t have the resources to set up such schemes. So how does a retailer exploit the latest data analytics tools, even if it doesn’t have a large loyalty offer?
The most practical thing retailers can start with is to get to know their customers better and start with cross-selling based on the information they have on a customer’s buying patterns, according to Wim Overeynder, director at consultancy AlixPartners.
“We recently helped an online retailer achieve a 4% uplift in sales by building sales transaction algorithms that identify strong repeat purchasing patterns of groups of products.
The information was used to tailor targeted marketing campaigns which could then be easily tracked for their sales conversion effectiveness,” he says.
He adds such a model can be built in weeks, and doesn’t necessarily need a sophisticated enterprise resource planning system.
But leveraging the latest data analytics tools isn’t just about top-line growth. Management of costs can also be made more efficient by integrating multiple, diverse data sources to provide simple, integrated dashboards that allow executive teams to drill down in just a few clicks from headline numbers through to the real problem areas.
Overeynder says: “We helped one rapidly growing, medium-sized retailer improve their bottom line by 10% in just a few months through implementing such a tool.”
Big data isn’t always easy to tackle, but as these examples show, there are ways retailers can successfully work beyond loyalty schemes to drive value from analytics.
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