Taming the Data Deluge

Marketers and consumers struggle with the volume of data the world now generates. David Benady asks how the two sides can jointly control the tide, including the advent of brand ‘data stores’.

Data is inundating the economy, overwhelming consumers and businesses with swathes of information that they struggle to comprehend. The overload is set to spiral as social media, mobile and geo-location technologies spew forth yet more reams of data.

With billions of web searches made every month, more than 20,000 new books published weekly and more texts sent daily than there are people on Earth, data is increasing exponentially. The number of exabytes (EB – equal to 1bn GB) of information created in 2011 hit 1750, double the 2009 figure, according to IDC estimates. There is twice as much data as storage capacity.

This torrent of data makes it hard for marketers to ensure their brand messages are heard above the noise. Consumers have become reluctant to open the floodgates to receiving more irrelevant information, and some are wary of providing personal details.

Research company TNS has analysed the way in which consumers ‘eat’ at this table of information and created five consumer segments based on their readiness to absorb data. It calls the data deluge ‘information obesity’, and looks at the way people create their own ‘eating plans’.

You are what you ‘eat’
‘Fast foodies’, it says, consume the easiest, lightest data they can find. ‘Supplementers’ devour as much information as they can. ‘Carnivores’ consume only meaty chunks – whole books and in-depth research. ‘Fussy eaters’ are loath to consume information from any source, while ‘balanced dieters’ never consume too much information; what they do take comes from a variety of sources.

TNS marketing sciences director Russell Bradshaw says these ‘eating plans’ are a good way for marketers to target resistant consumers. ‘By understanding the predominant “eating plans” that exist among their brand franchises, brand managers and chief marketing officers have a tool for maximising the reach, resonance and values of their campaigns,’ he says.

TNS analysis suggests that ‘carnivores’ are more likely to shop at Marks & Spencer, while ‘fussy eaters’ tend to stock up at Asda. This gives M&S leeway to bolster its communications, giving customers big, meaty chunks of information they can savour slowly. Asda, meanwhile, would do well to deliver information in bursts and offer online nuggets such as tweets to appeal to voucher-hungry customers.

Marketers acknowledge that segmenting consumers by their propensity to consume information can be useful, but many see it as an add-on to the already tough task of identifying relevant audiences.

David Torres, global manager of chemicals technology at Shell Research, says that Shell intends to embed the TNS eating plans into its work, adding that brands need to search the data they have for clear and relevant insights.

Meanwhile, Stephanie Maurel, head of retention at Sport England, says the ‘eating plans’ could be useful if blended with other tools. ‘The TNS data obesity segmentation makes a lot of sense and rings true anecdotally. It is a great idea to segment by the information consumers are prepared to receive, although perhaps this is an extra step to be added to current tools,’ she adds.

Maurel’s role at Sport England is to use data to help various sports’ governing bodies to increase participation and attendance, a challenge for smaller sports, such as hockey. One solution is to take data from grassroots sources, such as social media, and integrate it with i n fo r m at i o n from elite sports events.

While small sports may be unsophisticated when it comes to data collection, Maurel says some governing bodies are using real-time data to build their popularity.

British Cycling, for example, gets feedback from locally organised Sky Ride mass-cycling events and feeds it through to its board meetings. This, in turn, helps it shape the way in which Sky Rides are organised.

For many brands, the UK’s data-chain is dominated by retailers. They control the all-important information about sales, which they then sell back to brandowners. Nonetheless, retailers, too, are suffering from information overload, according to Chris Osborne, retail principal at software supplier SAP. A recent survey by SAP found that more than half of retailers believe they have more information than they can handle. ‘Structured’ data – such as till receipts showing items purchased, times of day, quantities and prices – has been around for decades. Osborne advocates combining this information with ‘unstructured’ data – such as the random chat of social media – as the next great challenge for brands and retailers.

The prize will be to build a total view of each customer’s likes, behaviour and loyalty, and target offers accordingly. A crucial step is ensuring both types of data are gathered and acted upon in real-time.

Osborne believes the development that will enable this is ‘in-memory’ data analytics, where the data is stored in the computer’s memory for quick retrieval, rather than on a conventional database where it is stored on a hard disk, making it harder to access and wasting capacity.

He envisages a two-track economy where success will depend on efficient use of data. ‘The retailers that win out will be the ones that are very careful about how they use data and don’t swamp consumers with irrelevant offers,’ adds Osborne. ‘Retailers that create competitive advantage are (also) careful about how often they communicate with consumers.’

Useful data vs ‘noise’
Given the retailers’ iron grip on data, some brands have turned to comparison website Mysupermarket.co.uk to gain access to information about their own performance through mini-shops on the site. Reckitt Benckiser, Kellogg, Danone and Nivea are among those to have created such stores.

James Foord, vice-president of business development at Mysupermarket.co.uk, says brands are only just beginning to grasp the distinction between ‘data noise’ and what is useful. The site allows brand-owners to create a direct relationship with consumers and thus control their data. Brands can analyse the battle between their products and stores’ own-label versions, for example – data retailers rarely release. ‘This is the tip of the iceberg of what is possible. Brand stores will open up a whole new level of insight that has real value,’ adds Foord.

The battle for data control is about more than simply capturing as much information as possible and keying it into a database. Finding ‘smart’ data can save time and money in research and bring significant benefits for brands. The challenge is to find the pieces of information that help a brand locate its best customers and give insights into their motivation for buying a product.

Mike Dodds, chief executive of integrated agency Proximity, recalls a cat-food brand’s CRM programme in which customers were questioned about their behaviour. The question that delivered the best data was: ‘Do you celebrate your cat’s birthday?’ The responses helped the brand discover the most involved and valuable customers.

A potential barrier to the development of data-driven marketing will be consumers’ attitudes to privacy and control of their personal details. The online giants, such as Google, Facebook and Twitter, have built their businesses on getting users to give up their data in return for ‘free’ services. If the public refuse to play, this could put a spoke in the wheel of the data economy.

Chris Combemale, executive director at the Direct Marketing Association, says brands have to be upfront about privacy and make their policies simple and readable: ‘If you can’t put the policy on one page and make it clear, you have an issue.’ He also warns brands to avoid being ‘creepy’ online – by serving ads based on details consumers thought were private – which, he argues, can make digital marketing appear intrusive.

Modern marketing is essentially a battle for data. However, consumers themselves have the ultimate weapon: to switch off and stop sharing their information.

Technology was supposed to make life easier, but, in reality, it has made the world far more complex. The task of creating marketing campaigns that get heard above the din will only get harder still in a society deluged with data.

Marketing © Brand Republic
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IBM and Huawei hook up to start Chinese takeaway

MWC 2012 IBM’s enterprise consultancy, IBM Global Business Service, has joined up with Huawei to create enterprise solutions, initially for Chinese companies but with global aspirations.

Huawei wants its smartphones embedded into businesses, and to give those businesses a reason to buy its tablets too. IBM wants to push its Chinese presence and tap into the expediently expanding market, which it hopes to do with Huawei’s help, but to Huawei this is just another step on the road to global domination.

The jointly developed platform is called “Smart Workspace@Mobile” though at the moment it is little more than slideware and aspirational statements. It will involve Huawei’s device management systems, and apply IBM’s experience with enterprise resource planning, customer relationship management and supply chain management, to create a combined solution to be pushed heavily into the energy and retail industries.

Both companies reckon enterprises are posed to make greater use of mobile workers and want to be ready to exploit that market in China and beyond. Huawei pins its plans to a projection which sees a 80 per cent of businesses making their staff work on the move by the end of next year.

But this alliance with IBM is also important in painting Huawei as a full-service company, not just a manufacturer of networking kit and Android handsets. There are dozens of high-volume-low-price manufacturers in China and Huawei is desperate not to be lumped in with them. Launching a quad-core Android handset is one part of that – the Ascend D being anything but low-cost – but sitting on stage alongside IBM is equally important. ®

L’Oréal renews confidence in Zetes and deploys multimodal voice solution integrated with SAP

L’Oréal, has completed a series of enhancements to its existing voice solution based on Zetes’ 3iV Crystal.

With over 42 factories world-wide and 4.6 billion products
manufactured in 2008, L’Oréal has dominated the beauty market for the past century and become the world-wide leader in the cosmetic industry. Always seeking innovation and excellence, L’Oréal employs the best technologies to achieve both its performance objectives and ensure customer service excellence.

As a result of its good past experience of the Zetes voice solution, L’Oréal has re-engaged Zetes to update and extend its existing installation. This new solution rolled out is a multimodal
application: voice is combined with barcoding and weighing to check the orders. This combination of solutions has been integrated with SAP, which steers the management of the L’Oréal warehouse.

Mrs Wendy Doucet, Preparation/Dispatch Manager at L’Oréal explains: “To improve our performance and facilitate the work of our employees, we had decided in 2006, to implement a solution based on voice technology that can also be combined with other data entry and audit systems.” Zetes was chosen due to its experience in this field and its expertise in the SAP environment. “The results were visible as soon as the solution was up and running,” points out Wendy Doucet. “We recorded a sharp reduction in the number of errors in the preparation of orders and thus improved the satisfaction of our customers.”

Thanks to 3iV Crystal, 20 warehouse clerks from the General Public Products Division France (DPGPF), in Marly and 17 warehouse clerks from Gemey Maybelline Garnier (GMG), in Ormes now work hands and eyes-free to prepare the orders.

Additionally in Portugal, L’Oréal has put its confidence in the Zetes voice solution to improve its warehouse business processes. In this country, 12 warehouse clerks from the Alverca distribution centre are benefiting from the advantages of voice.

Alain Wirtz, CEO of Zetes, comments : “We are very honoured that L’Oréal has renewed its confidence in the competences of our teams and hope to have the opportunity to continue cooperating on new projects. The combination of voice with other technologies, such as barcoding or RFID, opens up new possibilities to improve the business processes in warehouses but also in other types of environment, for example in the back of store area for retailers.”

HMV picks new CRM system

HMV’s new rewards scheme, PureHMV, is using a customer relationship manager (CRM) system from EHS Brann Discovery.

PureHMV allows customers to collect points for transactions, then trade them in for ‘money can’t buy items or experiences such as autographed guitars or concert tickets.

EHS Brann Discovery is supporting the launch of the unique scheme, which has now gone nationwide after a six month trial across 33 stores in East Anglia and the West Midlands. The agency’s approach will utilise reward scheme data from multiple sources including HMV’s point-of-sale systems and in-store and website sign-ups, all of which will feed hourly into the CRM system.

The system will analyse sales data by customer types and spending behaviour to allow for better targeted and more relevant communications on promotions and offers. This aims to make the customer’s journey more personal, relevant and valuable and HMV’s marketing more efficient, profitable and insightful.

“The implementation of a CRM system will enable HMV to maximise the value it derives from PureHMV, and provides the tools to ensure that its approach to customer loyalty remains current and credible. Investment in customer loyalty generates a vast quantity of customer insight, and by carefully analysing this data and applying it to the interactions it has with its customers, HMV can continue to enjoy profitably and long term relationships,” says EHS Brann Discovery managing director Richard Greenhalgh.

Retailers pitch for loyalty in tough times.

LOYALTY pays, even during a slowdown. At a time when consumer spending is on a decline, leading retail chains are either expanding or restructuring their loyalty programmes. The retailers expect such a strategy will help them increase footfalls, conversion level and ultimately drive their topline growth.

While the likes of Future Group, Shoppers Stop, Westside and Reliance Retail are driving the focus on customer relationship management (CRM), restaurant chains like Speciality Restaurants (SRPL) are also gung-ho on the same. “The CRM programmes are important for any retail chain and they work, especially during a recessionary trend. They give customers some comfort and ensure that they keep coming back again and again,” SRPL chairman and MD Anjan Chatterjee told ET.

SRPL’s loyalty programme currently has 70,000-odd customers within its folds, who account for 30-35% of their sales. “We are now planning a marketing blitz to penetrate into 70% of our target audience by July-August,” said Mr Chatterjee.

Within six months, Future Group is planning to roll out a single loyalty programme that spans across formats. The group is currently investing heavily on the IT backbone. Currently, the group’s Green Card loyalty programme at Pantaloons accounts for 55% of sales.

“As the first step towards a uniform loyalty scheme, we have rolled out a prepaidcum-loyalty card in Pune and Kolkata. We’ve clocked nearly Rs 15 crore business out of this. Eventually, we expect 70% of our sales from lifestyle formats to be generated from loyalty scheme customers,” said Future Group president-customer strategies Sandip Tarkas.

Interestingly, Reliance Retail already operates its ‘RelianceOne’ loyalty programme across formats with four million customers. “We see a significant percentage of our sales coming from our loyalty card holders,” said a Reliance Retail spokesperson.

Shoppers Stop has just launched a new loyalty scheme for its hypermarket ‘Hypercity’. “The loyalty programme is a long-term strategic initiative, which drives repeated purchases. We add nearly three lakh customers under loyalty every year,” said Shoppers Stop MD BS Nagesh. As of end-2008, the retailer had more than 11.8 lakh loyalty members.

Westside has relaxed the entry norms for its loyalty programme ‘Clubwest’ to cash in on the large footfalls the store is witnessing due to Nano bookings. Earlier, to become a silver member, one had to shop for Rs 2,000 on one occasion and register. “Now, a customer can enrol for the programme even by shopping for Rs 500 and subsequently get upgraded, if he completes Rs 2,000 billing within three months,” said Westside marketing-head Smeeta Neogi. The chain currently has over eight lakh members, who generate over 50% of sales.

E-tailing for Success.

WITH the economy performing below normal, many retailers who preferred having a physical presence are looking to go online at minimal costs and keep the cash registers ringing. Compared to a traditional brick and mortar storefront, an e-commerce store is a relatively small, convenient and lowcost startup. The only costs involved in the e-commerce platform include the monthly hosting and ISP bills. With a website, an e-tailer has the capability to gauge the market condition and make alterations accordingly. Taking into account all its benefits, e-commerce can be considered ideal during a recession as it helps retailers to stay globally competitive.

Serving retailers and consumers
Today leading global e-commerce retailers earn more than 10 billion in revenue on every portal they own, and this shows the shifting trend towards e-tailing. Affirming this, Pawan Gadia, VP, Ferns ‘N’ Petals (FnP), says, “We are achieving 60 percent growth year-on-year, thanks to e-commerce. In fact, 10 percent of the total turnover of the FnP Group comes from online sales.”

Videocon is also aiming big on e-biz. “In 2009, our target is to earn online sales of Rs 10 crore, and our current sales are very much in line with our targets,” adds Arindam Bose, VP–IT, E-biz and Exports, Videocon.

Consumers today are more open to the online medium. This trend is further catalysed by various product and price comparison websites that enable users to perform research on products that they intend to purchase. Moreover, increasing fuel costs, large mall crowds and low disposable incomes are motivating buyers to shop online. Mr Gadia says, “Contrary to a physical store that has issues of timeline, visibility, etc, an online store is more flexible. An FnP store closes at 8 pm every day, but the online store runs 24×7, thereby giving us more customers. We serve more than 2000 clients everyday on our online site.”

The e-commerce option caters to customers in the current economy because it offers products at lower costs. “E-biz reduces the logistics cost as the goods go directly to the end consumer. Any business model that removes layers and brings the consumer nearer to the manufacturer benefits all,” agrees Mr Bose.

Choose intelligently
Despite its potential, many people don’t know how to get started with e-commerce and are often confused about the numerous options available. Several solutions allow retailers to sell items online, but it is always advisable to approach retail-specific vendors who can customise solutions according to customers’ business needs. “Each customer has a different requirement. Some want a pure Web shop, while some want integration with CRM or ERP, and yet others seek telephonic booking. Each requirement should be considered individually before offering a solution,” says Manu Agarwal, CEO, ANMsoft and Naaptol.com.

Though most solutions may differ, some are fundamental for every online business enterprise, and these are listed below:

Design customisation solutions: Setting up a business involves considerable time, energy and money. It is necessary to create a brand that customers find familiar. Many ecommerce solutions force retailers into a particular site layout, template or theme, making them just another cookie-cutter, faceless, online store. An e-commerce service provider must understand the objectives of an e-tailer to equip the latter’s website with aesthetic solutions.

Scalability solutions: Retailers do not want solutions that limit the number of products on display or the amount of traffic that the site can generate. Therefore, e-commerce solutions must equip retailers to add dynamic features to his existing site.

Payment solutions: Many e-commerce solutions force customers to register before making a purchase. Forcing customers to leave a site when they are ready to purchase products is not a smart business practice. If a customer finds the payment options in the website too cumbersome, he/she may switch to another shopping site. Therefore, a retailer must ensure that customers are hooked on to the website until they have completed their transaction.

Order processing solutions: These solutions are specifically designed to save operating costs. In the absence of these automated solutions, a retailer has to maintain the inventory and keep a track of orders and process them.

Search engine optimisation (SEO) and Search engine marketing (SEM) solutions:
To drive traffic to the website, a retailer must employ an SEO or SEM. SEO is more popular because of its low costs and better results. However, a retailer must ensure that the SEO uses the right keywords to improve his website’s page rank. The website must contain the right keywords so that when a user searches for a particular product, the retailer’s website appears at the top.
According to Mr Agarwal, “A majority of the people who go online end up buying nothing or may not even visit a particular website. This is because the retailer and the service provider may have not set up means to direct traffic to the site.”
Coupon solutions: In the face of rising prices, consumers have once again begun clipping coupons. Giving away gift coupons serves to increase sales. People are always looking for discounts and freebies, and a site that offers similar incentives often sees repeated visits. E-tailers can send coupons as an SMS with unique promotional codes that shoppers can use on their e-commerce website, and receive discounts on online purchases.

Shopping Cart and Delivery Solutions: A customer should be given a free hand to add products to his/her shopping list, remove products, change their quantity, recalculate the order before processing and even come back to the same after logging out. On the delivery front, most clients prefer websites that offer free home delivery and, therefore, e-retailers must have a user-friendly delivery solution in place.

Innovations to help you save
In lieu of the ongoing recession, retailers have started exploring innovative ways to cut costs. Many e-tailers are outsourcing their retail operations to specialised retail vendors for reducing labour costs. One of the affected areas during this slowdown is advertising, and very few retailers seek to manage advertising costs. Retailers should ideally adopt online advertising tools like e-mailers, newsletters, etc. “Retailers can send e-mailers, promotions, gift coupons to their existing customers at a very low cost, and still enjoy sales benefits,” admits Mr Gadia.

In order to grow in the existing scenario, a retailer should place his merchandise where his potential customers are most likely to be. Going by this, the retailer should view e-tailing as a cost-effective channel to lure sales.

Retail Software Market to Grow in Emerging States

Despite unfavorable economic conditions all over the world, the prospects for the retail software market look particularly promising in the emerging Asia Pacific and Central and Eastern European markets. A Frost & Sullivan analysis on world retail software market, finds that the retail software market earned revenues of over $9.31 billion in 2007. Of this, software licensing accounted for $3.07 billion in 2007 and will reach $5.88 billion in 2014.

The increased penetration and the transition toward organized retail in several countries across Asia Pacific, Central and Eastern Europe, Middle East, and Latin America, coupled with increased liberalization and disposable incomes, present huge opportunities for the growth of the retail software market.

“The primary driver of the growth of the retail software industry is the growing focus on business integration and optimization,” said, Frost & Sullivan research analyst Prasanna Prakash.

Retailers have been substituting their legacy systems for modern day solutions built on industry-leading platforms facilitating the flow of business information across the entire value chain. As these solutions offer extensive performance enhancements, there is a wide scope for the uptake of advanced end-to-end solutions.

Retailers are mainly turning to customer-centric solutions and Business Intelligence (BI) to build customer loyalty and improve the customer shopping experience. Solutions such as customer relationship management (CRM) enable retailers to target premium customers using customized promotions and advertisements, thereby increasing the customer lifetime value (CLV) involved. Investing in cross-channel solutions can also result in effective understanding and management of their business.

Besides reducing total cost of ownership, retail software also assists in providing uniform brand communication across various channels. Optimization across the various processes and channels allows the retailer to respond quickly and more efficiently to customer requirements.

Retailers are hesitant to invest in solutions such as point-of-sale (POS) upgrades and other additional expenditures on hardware as investments have taken a backseat to cost-cutting during the current economic slowdown. SaaS can help counter this by reducing upfront capital expenditure. It is leased out to retailers on a yearly basis and its SOA, allows the software modules to be used as middleware once SOA has been deployed in the store.

“The growing popularity of the SaaS model and packaged solutions in Asia Pacific and Latin America will gradually make the solutions more affordable for small and medium sized enterprises. Further, to overcome competitive pressures from regional vendors, global vendors need to increasingly focus on after-sales services, such as maintenance and consulting, and customized solutions,” said Prakash.

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