Business Intelligence Blog from arcplan
16Nov/111

Uncovering 21st Century Consumer Behavior with Business Intelligence

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This post on BI for retailers is co-authored along with Raj Kutty, CEO of iVEDiX.

Retailers are frequently challenged with a new definition of multi-channel marketing. The marketing landscape includes more than the traditional components of print advertising, direct mail, and Customer Relationship Management (CRM). It also rolls email, social media, mobile and web (e-commerce) into the marketing mix. Customers engage with brands and make purchasing decisions on a new array of platforms, which has increased the amount of consumer behavior data available for retailers to manage. This subsequently makes the marketing campaign management process much more complex—from budgeting and planning to predicting consumer behavior to providing superior customer service.

With the rapid advent of new, innovative technologies, Business Intelligence (BI) has seen a great deal of change over the past few years. BI has reached a state of sophistication where it is being adopted as a key strategic initiative by retailers. BI solutions aggregate information and provide retailers fast and easy access to data for business reporting, analysis, planning and decision support. By transforming data into actionable information, BI helps retailers make better fact-based decisions at every level of an organization.

Social media, an influencer of consumer behavior
Most retailers are aware of who their customers are. They are equipped with the technology to reasonably ascertain demographics, buying patterns and influencing behaviors. However, the proliferation of numerous social media channels in the consumer market—like Facebook, Twitter and Foursquare—has exponentially amplified the challenge of identifying and understanding target markets. Next generation Web 2.0 communication has altered the frequency and intimacy with which retailers interact with their customers.

Retailers, more often than not, have data on their customers' online and in-person shopping habits stored in separate repositories—a CRM system and an ecommerce database. For a complete analysis, this information can be combined with social media data—customers who "like" a particular store or product or who tweet about a specific brand or product—as well as fundamental demographic information such as income level, gender and age. These layers of information can be superimposed on a geographical map to create very powerful campaign segmentation visuals. Going even further, tying in customers' actual receipts can give the retailer an incredible perspective on the customers' buying behavior and thought process leading up to their purchasing decision.

Click to enlarge - a simple example of a map that reflects sales information. BI visuals can reflect campaign statistics, most frequent purchasers and more on geographic maps.

Overlaying all of this information provides a visual pattern of a retailer's most prolific customers and provides insights into customer touch points. For example, this visual can correlate the tendency for preferred customers, or club members, to actively engage with a brand on social networks or make purchases online. This not only helps retailers identify and reward their brand ambassadors, it also helps them identify and engage with customers who are less involved with the brand online.

A traditional marriage
Social media intelligence cannot stand on its own. That's why retailers need to take their forward-leaning BI strategy to the next level and connect—or "marry"—social data to traditional financial systems, product catalogs, inventory and supply chain systems. Resulting comprehensive reports help retailers identify patters in customer behavior. For example, a fully integrated visual report can highlight preferred customers’ online behavior and also display analytics results for traditional marketing methods, like whether or not a direct mailing campaign rendered the desired results from a target audience.

Click to enlarge - an example of an interactive dashboard

A BI dashboard also allows retailers to cluster, segment and simulate outcomes based on various hypothetical marketing scenarios. The results of these scenarios are paramount to developing and executing the most successful marketing campaign possible based on factual data. Ultimately, incorporating traditional BI data with CRM and social media data allows retailers to leverage all information assets to proactively influence customer behavior at every relevant customer touch point—be it online, at a store or on a social network.

Measuring campaign and cost effectiveness
BI enables accurate forecasts and demonstrates true effectiveness and return on investment (ROI) of a marketing campaign. BI dashboards break down the number of emails opened, click-thru rates on e-blasts, Facebook "likes," and positive or neutral sentiment tweets to help retailers analyze customer activity. This intricate reporting breakdown provides a wealth of knowledge into customer behavior, responses to marketing methods or brand messaging, and overall campaign effectiveness.

Although the retail industry is continuing to change, a few things remain constant—driving sales and profitability, as well as reducing operational costs for long-term survival. Not only does this data validate whether or not retailers are targeting the right market, it also allows retailers to trace a campaign expense directly to an increased revenue stream or profit margins.

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  1. I really enjoy the blog.Really thank you! Want more.


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