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

Why Wal-Mart Is Worried About Amazon?

Five years ago, the world’s largest retail chain didn’t have to worry much about the world’s largest online mall. Only about a quarter of Wal-Mart Stores (WMT) customers shopped at Amazon.com (AMZN), according to data from researcher Kantar Retail. Today, however, half of Wal-Mart customers say they’ve shopped at both merchants. That’s leaving the mega-retailer—which long ago bested local brick-and-mortar merchandise stores and supermarkets across America—with a massive online competitor that is too tough to ignore.

Threatening Wal-Mart’s dominance are two trends: The discounter’s traditional customers—bargain hunters making less than $50,000 a year—are getting more tech-savvy, and more-affluent shoppers who began frequenting Wal-Mart during the recession are returning to Amazon as their finances improve. Amazon has moved into merchandise categories that Wal-Mart traditionally has sold, from diapers to vacuum cleaner bags. In its last fiscal year, Amazon posted 41 percent revenue growth, to $48.1 billion, vs. 8 percent at Wal-Mart. The chain’s 2011 online sales amounted to less than 2 percent of its $264 billion in U.S. revenue, says Kantar. “Amazon is always in our sights,” says Jeremy King, chief technology officer at the retailer’s @ WalmartLabs skunkworks in Silicon Valley. “My biggest issue is playing a catch-up game.”

In the last year Wal-Mart has increased its investment in its online business. The company has spent more than $300 million acquiring five tech firms since May and hired more than 300 engineers and code writers in the U.S. and India. Wal-Mart is also launching a program to allow the 20 percent of its customers without credit cards or bank accounts to make online purchases.

Wal-Mart’s acquisitions include Kosmix, a social-media firm, and iPhone app creator Small Society. The company hopes the newcomers can find a way to stop shoppers from engaging in scan and scram. That’s when would-be customers use their smartphones in stores to scan an item’s bar code and then buy it online from a rival merchant. The chain’s tech team also is working on a concept called Endless Aisle, which would let shoppers immediately order from Walmart.com via smartphone if an item is out of stock. “You can’t ask people to leave their phones at the door. So you have to give them value and an experience,” says Venky Harinarayan, @WalmartLabs’ senior vice president of global e- commerce. The former Amazon executive joined from Kosmix.

Wal-Mart is trying to improve links between its store inventory, website, and mobile phone apps so that more customers can order online and pick up their purchases at stores, which half of Web customers do already. Wal-Mart is trying Web-based shopping tactics, like its Pay With Cash program for Wal-Mart customers who don’t have credit cards. The new program allows them to reserve products online and pay cash at their nearest store. To cater to its affluent customers, Wal-Mart is selling more expensive items—for example, high-end televisions from Sony (SNE) and Samsung—only online.

Harinarayan’s team is also trying to tackle a new problem for Wal-Mart. Last year the chain was the No. 1 destination for holiday shoppers, with 53 percent of U.S. customers visiting its stores. That was down from 59 percent the year before. To lure gift shoppers, the techies have developed a Shopycat feature that scans the social media preferences of a consumer’s Facebook friends and suggests gift ideas sold on Walmart.com. About 150,000 users have installed the app.

To roll out more such innovations, Wal-Mart must improve its in-house e-commerce technology, so King will hire 87 engineers and coders to bolster the links between the stores and the website. “We’re starting from scratch to build a foundation,” says the EBay (EBAY) veteran. “Ideally, we’d have this platform built a couple of years ago.”

 

The bottom line: Wal-Mart, which gets less than 2 percent of its U.S. sales online, aims to bolster its technical capabilities to compete with Amazon.

 

Look customers in the eyes to lock them in the aisles.

Shopkeepers adopt the hard sell with some tailored software, writes Mark Russell.

IN THE film Minority Report set in 2054, a brewer’s advertising billboard identifies Tom Cruise’s character, John Anderton, through a retinal scanner. As he walks past, the billboard calls out: ”John Anderton! You could use a Guinness right about now.”

Far-fetched? Not according to retailers who believe this type of targeted advertising may well be the future of shopping.

New York company Immersive Labs is already using built-in cameras and facial recognition software in its outdoor billboards to determine the gender and age of passers-by so it can customise the advertisement on display to suit them and prompt sales.

So if a man strolls by on a cold morning, the display might change from an ad for women’s clothing to an advertisement suggesting a cup of coffee at a nearby cafe.

As Australian online shopping – expected to be worth $21.3 billion this financial year and $30.8 billion by 2015-16 – continues to threaten bricks-and-mortar businesses, retailers are using the latest technology, combined with social media, including more shopping apps, to lure customers back into their stores.

German shoemaker adidas is planning to install touch-sensitive display walls in stores from next year. The virtual footwear wall will allow customers to view the company’s entire range of 4000 pairs of shoes. If a customer likes a particular shoe the store will order it in.

Two cameras above the screen will watch shoppers’ reactions to determine which shoes are most popular. And like other companies, adidas is also gathering feedback by encouraging customers to use Facebook and Twitter to review its products.

Brisbane company Yeahpoint believes its MiMirror creation is the missing link between instore shopping and social media that will revolutionise fashion retail.

MiMirror is a touch-screen display with a camera that acts as a mirror and takes up to six photographs of customers in outfits they are considering buying. The shoppers then email the images to friends or post them on Facebook to get a second opinion.

No retailers have installed the technology yet, but the company is confident major stores will buy the device in coming months.

”The factors driving retailers’ decisions for the future are basically that the cost of business continues to increase and competitiveness in the retail environment is being challenged by the online market,” Yeahpoint’s John Anderson says.

”On the flip side, you have the time-poor consumer who wants to have a much more friendly, fun shopping experience.”

Sean Sands, of Monash University’s Australian Centre for Retail Studies, agrees, saying many consumers are bored with traditional retail and the only way to lure them back into stores is to offer the latest technology linked to social media.

A recent report released by the centre found that online shopping was creating tougher in-store customers because they were ”better informed due to the power of the internet”.

Half the population now research their purchases online before setting foot in a store.

Many are also armed with a wide range of shopping apps that can be downloaded on to iPhones, iPod Touches, iPads and other tablets and smartphones, that allow them to hunt for the best deals.

The RedLaser app, for example, allows instore shoppers to scan the barcode of an item to get the price and then checks online to see if it’s cheaper elsewhere.

Supermarket giant Coles’ ShopMate app, which notes specials and lets you cross off your shopping list as you go, has been downloaded 400,000 times.

Rival Woolworths does not have a shopping app but has one to locate missing trolleys.

Woolies’ app-lessness is not likely to last, however, as retailers respond to consumer demand.

Russell Zimmerman, of the Australian Retailers Association, says ”every retailer has to be in the online space in the foreseeable future” or they won’t survive.

According to PayPal, 8 million Australians buy goods using the internet, and one in 10 buy them with their mobile phones.

Google Australia’s head of retail, Ross McDonald, says this increasing use of mobile phones to search for stores and products has become a noticeable trend in the past six months.

Previously, 95 per cent of online traffic for shopping searches was from computers but 16-18 per cent of online inquiries were now from mobile phones. ”What we advise retailers is that it’s not so much about the app but making sure you are visible on a mobile device when someone searches for you,” he says.

Jo Lynch from Myer – which has an iPhone app that lets you peruse and buy goods with a tap of your finger – says the company expects its online business to generate sales of $5 million for 2010-11 and be worth up to six times that in the next few years.

David Jones’ Brett Riddington says the future of shopping is all about multi-channel retailing. ”Many customers will still want to go in-store to physically see the goods after checking them out online, but we need to make that a more entertaining and engaging experience,” he says.

Successful Brand Marketing

With an increase in trust deficit world over, here is what brand managers need to weed out of their environments to retain their brands’ trust

MARKETING’s greatest invention is the brand. In effect unheard of 100 years ago, brands and branding now march triumphant. Everything and everybody — places and destinations, political parties and social movements, people (first celebrities and politicians, now, it appears, all of us) — are brands.

Yet, aside from a few usual suspects such as Apple, in the branding heartlands, all is not well. Y&R executives John Gerzema and Ed Lebar highlighted the problem in 2008, when they reviewed longitudinal evidence from Y&R’s Brand Asset Valuator research programme. In their book The Brand Bubble, they charted a ‘precipitous’ decline in brand trust since 1993, along with sharp falls in consumer perceptions of quality, brand awareness and ‘brand esteem’.

In 1993, for example, consumers trusted 52% of the brands researchers asked them about. Fifteen years later, the figure had fallen to 25%. Gerzema and Lebar pointed out that stock markets may have been pushing up the value of brand-owning companies, but brands themselves were being ‘hollowed out’.
Then came recession. Halfway through, Promise chief executive Charles Trevail observed that “according to every survey and index on trust in institutions and organisations from around the world, trust is in terminal decline”. Even when the recession was supposed to be lifting, Alterian chief executive David Eldridge commented on his company’s latest research: “Consumer trust is at an all-time low.”

So what’s the problem? How can brands and branding be so successful, yet so sickly at the same time? The answer may lie with the occupational diseases of brand management — diseases that are generated by the daily working lives of brand managers.

MASKING THE PROBLEM
Brand management as ‘mask management’ is the most common of such diseases. Because brands are all about external communication, many brand managers find it hard to resist the temptation to paint ‘lipstick on the gorilla’ — telling customers what the brand manager knows they would like to hear, rather than keeping to the truth of what the organisation can, or actually intends to, deliver.

In reality, the most important part of the brand manager’s job is one of internalisation: bringing customer views and perceptions from outside the organisation inside, so that the organisation understands, responds and resonates to customers’ changing demands. Yet, activity-wise, the minute-by-minute focus of the day job is external communication. When changing the external message is easy (and fun) and changing the organisation inside is hard (and painful), the lures of lipstick-on-the-gorilla mask management can become irresistible. In fact, they can even be dressed up as a new theory. Remember when we were told that punters didn’t buy the beer, but its advertising? Remember George, the Hofmeister bear?

Next on the list is brand hubris. Not long ago, it was fashionable among brand consultants to show their clients a chart depicting the relative prices of different T-shirts. Some sold for a fiver or less, while branded ones were at least £50. “Which T-shirt do you want to be?” the consultants would ask. The difference between being able to charge £5 and £50 lies in “branding”, they would say. “We can help you become experts at ‘branding’.”

Well, they may have been experts at branding, but they were dunces at economics. If you sell 1000 T-shirts for £5 with a £1 margin, you make £1000 profit. If you sell 10 for £50 with a £48 margin, you make £480 profit. By implying that the supply/demand curve could be ‘branded’ away, these consultants were usually doing their clients a real disservice. While they were doing the rounds with their presentations on ‘branding’, full of impressive words such as ‘intangibles’, the brand that romped it on the high street was Primark.

That is not to say that discounting is always the best strategy. Rather, it is to challenge the widespread belief that it’s the ‘extra stuff on top’ — the stuff added by ‘branding’ — that is the source of brands’ margins and profits. The fact is that, apart from some special cases such as luxury goods, if you look at most successful brands — such as Amazon, Apple, Dell, easyJet, Facebook, Google, IKEA, Nike, Starbucks, Tesco, Toyota, Virgin and Wal-Mart — what marks them out is not superb ‘branding’ (sometimes it’s superb, but very often it’s not) but that they deliver outstanding customer value, often via breakthrough innovations, technology and/or underlying business models.
‘Branding’ alone hardly ever makes a business successful. It is businesses, including their culture and ethos, that make brands successful. And as soon as the business drops the ball on innovation, service, quality or price, or forgets its cultural roots, the brand quickly loses its lustre.

CLARITY OF PURPOSE
Brand narcissism is our third, closely related, occupational disease. Brand narcissism works on two levels. At the first, every brand manager desperately wants their target audience to recognise their brand, love it and be loyal to it by, for example, acting as an unpaid yet enthusiastic brand advocate.
There is nothing wrong with these dreams per se. They are natural. What is wrong is when we morph the wish into a ‘strategy’ of ‘success by being popular’ — where getting people to talk about and ‘love’ the brand becomes an end in itself, pretty much divorced from the value it’s supposed to be delivering.

The second level of this brand narcissism, which is even more dangerous, is where the brand manager forgets the underlying purpose of the brand and starts acting as if it’s the job of the customer to add value to the brand (by paying a price premium or being its advocate, for example), rather than the job of the brand to add value to the customer.

An obvious point, perhaps, but it can be difficult to remember in a world where your every passing thought, and key performance indicator, is about how well-remembered you are, how preferred you are, or how many people are talking about you.

Our final occupational disease is toolkit myopia. Brand managers are surrounded by a dizzying array of sophisticated tools and techniques for research, testing, data-gathering and evaluation. They are on an endless quest for the breakthrough insight and the sparkling creativity. It’s difficult to master all these things and the quest easily becomes obsessive. So much so, that it soon seems as if excellence at these diverse technicalities lies at the heart of successful branding — when it is not.

You can, for example, use exactly the same technical toolkit, excellence, to build a brand that perfectly communicates a brand’s unique value.
And to hide the fact that the brand is nothing more than a me-too mediocrity. You can use technical excellence to articulate specialness and hide sameness, but content-wise, they are opposites, having an opposite meaning to the customer.

The one thing that branding as mask management, brand hubris, brand narcissism and toolkit myopia have in common is that they destroy trust. They are potentially catastrophic mistakes, yet they are in the air brand managers breathe, growing naturally in their working environment. So they have to be combated on a daily basis.

How? What’s the antidote? To remember that a brand’s real job is to build trust, and that everything the brand does must be tested against this yardstick. It’s this simple human understanding that successful brand managers never let anyone forget.

Build Your own Facebook Store

Shopping search engine Sortprice.com expanded its merchant store application on the Facebook Platform to help retailers expand their e-commerce capabilities that can be used by the social network’s audience.

The free application, available to any Sortprice.com enhanced merchant with an existing Facebook account, works hand-in-hand with their product listing on Sortprice itself and allows them to build a virtual store right on Facebook. Merchants can have their full inventory available to Facebook users for shoppers to peruse and compare prices on, complete with photos and direct links to their own Web sites, according to Sortprice.

The tools give retailers complete control over the ‘look and feel’ of their stores, with dozens of choices for color schemes, an option to upload category images, and the ability to add a slogan to their page as well. Sortprice also included an extensive FAQ section to guide merchants through the process of configuring their stores while offering tips for promoting the application to internal and external audiences.

On the user side, Sortprice’s unique Drag & Drop feature for the merchant pages is now compatible across all web browsers, facilitating each user’s visit. Shoppers can now quickly and easily compile a “wish list” of desired items from a particular merchant’s store. These lists are viewable to all users and are the foundation for a truly interactive shopping experience. Visitors can comment on other users’ wish lists, indicate particular items that they “like”, and even invite friends and family to check out wish lists or specific products.

To learn more about the Facebook store application, visit http://www.sortprice.com/facebook_store

A cartoonlike way to chat from Google

Google, known for its plain-Jane approach to Web design, has come up with something much wackier.

On Tuesday the company introduced Lively, an online tool that allows people to embody a cartoonish online avatar and have text-based conversations with friends and other Internet users in virtual chat rooms. The rooms can be added to any blog or Web site.

Google unveiled the new product in a post on its official blog – its characteristically understated way of introducing new features to the world. It can be reached at www.lively.com, but it is officially part of Google Labs, an area of the company’s site where it showcases projects that remain in the beta, or experimental, phase.

Lively and similar products from other companies have the potential to change the way people interact over the Web. Online chat rooms are two-dimensional – they include text, and sometimes voice and video.

Lively tries to make that conversation three-dimensional, more interactive and more fun. As if they were playing a game, users choose from a selection of unrealistically handsome or Disneyesque avatars.

They can also create their own chat rooms, which can be posted to a blog or social network profile as easily as a YouTube video.

Up to 20 people can occupy a room and chat with one another. (Text appears as cartoon-style bubbles atop the avatars.) Users can design their own virtual environments, hanging on the walls videos from YouTube and photos from Picasa, Google’s photo service, as if they were pieces of art.

Inside Google, the product was headed by Niniane Wang, an engineering manager. Students at the University of Arizona have been testing Lively for several months.

Wang wrote in the blog post that she developed Lively as a “20 percent project,” referring to Google’s philosophy that employees should spend one day a week working on projects outside of their day-to-day responsibilities.

Her spare time could cause some problems for companies with similar ideas. Second Life, the virtual world run by Linden Labs of San Francisco, is known for its much larger virtual world, where hundreds of thousands of users can enter at the same time. But it is accessible through a separate program, not a Web browser. (Lively, which works only on Windows computers for now, requires the downloading of a bit of add-on software.)

Mark Kingdon, chief executive of Linden Labs, said Second Life’s value was not just in 3-D chat but also in more elaborate environments where people can work, play, teach, and buy and sell virtual products.

“Users are highly motivated to create and transact in Second Life to the tune of almost a million dollars a day in user-to-user transactions,” Kingdon said.

Vivaty, a virtual-world start-up in Menlo Park, California, backed by the blue-chip venture capital firm Kleiner Perkins Caufield & Byers, opened its virtual doors on Tuesday. Vivaty’s product is a similar 3-D chat room that runs on Facebook and through AOL Instant Messenger.

In one version now available on Facebook, users can create a virtual dorm room and decorate it with furniture from Target.

Keith McCurdy, Vivaty’s chief executive and a former executive at the game giant Electronic Arts, said Google’s entry was a validation of the concept. He said that Vivaty could get more traction by putting its virtual worlds on every Web site – even those controlled by Google’s rivals.

“We are not beholden to any one camp or approach,” McCurdy said. “We are trying to create an open system where lots of people have branded virtual scenes.”

Google’s success is not assured, of course. Other test products it has introduced have languished, like Product Search, originally known as Froogle

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