08 May How 4 Major Retailers are Using Big Data
When it comes to Big Data, it’s not how much you have — it’s what you do with it that counts. We all know that major companies like Amazon, Uber and Netflix use big data to drive everything from new product developments to predicting which movies will keep you glued to your chair — but retailers face a unique situation that many digital properties don’t.
Rather than being able to get a head start right out of the gate, traditional retailers have had to quickly adapt to the notion of collecting and analyzing all of this information about their customers. Before the advent of big data, the closest customers could get to a personalized experience with retailers was through their loyalty program. So what are major retailers doing now to capitalize on the data they collect? Let’s take a look at some innovative examples.
Costco Helps Solidify Customer Loyalty with Fast Warnings
If you need another reason to love Costco, here’s a good one. Like other big box retailers, Costco tracks what you buy and when. That should come as no surprise. What may surprise you, however, is that the information they collect could prevent you from getting very, very sick.
A California fruit packing company warned Costco about the possibility of listeria contamination in its stone fruits (peaches, plums, nectarines). Rather than send out a blanket warning to everyone who shopped at Costco recently, Costco was able to notify the specific customers that purchased those particular items. It first notified them by phone and followed up with a letter.
Costco has been collecting reams and reams of user data even before big data was a marketing buzzword. They were able to help the Centers for Disease Control pinpoint the source of a salmonella outbreak back in 2010.
Target Targets Pregnant Mothers Before They Share the Baby News
This is likely the retail case study that truly woke up the brick-and-mortar stores to the potential of big data. Back in 2012, data scientists at Target were tasked with a challenge. Once a woman gives birth, the baby’s birth becomes public record. Public records are often scoured by advertisers, and before she knows it, she’s inundated with offers on everything from diapers to strollers.
But what if you could target her before the baby was even born? Using data about women’s shopping habits, Target was able to identify that women buying large quantities of unscented lotion, cotton balls, supplements and washcloths might mean that she’s anywhere from a few weeks pregnant, to very close to her due date. And if they can get her shopping at Target before the baby is born, chances are, they’ll hook her for life. In one case, a teen was suddenly getting mailers from Target promoting cribs and bibs — before she had even told her father about the pregnancy. Oops!
The Weather Channel Takes Advertising by Storm
You probably think The Weather Channel is just…weather. But it actually goes much deeper than that. Through its data platforms, Location FX and Weather FX, The Weather channel monitors the weather’s impact on viewers’ emotions. These predictive weather analytics look at trends based on location, and guide advertisers on how and when to deliver their message to help spur action.
One such example was the partnership between Pantene, Walgreens and the Weather Channel. Using data collected by the Weather Channel, Pantene and Walgreens were able to anticipate when humidity in the air would be at its highest, prompting women to seek out a product at their local drugstore to prevent frizz and flyaway hair.
This was branded as a “haircast” and lead to a 10% increase in sales of Pantene at Walgreens for the months of July and August, along with a 4% sales lift across the entire hair care category at Walgreens. It also spurred the creation of social media discussions under the #haircast tag.
Another example involves a local pizza chain getting a 20% response rate through the combination of a location-based text marketing campaign coupled with cold weather and the potential for power outages. If you can’t cook, why not order out?
A (Red) Roof Over Your Head
There is probably no sinking feeling worse than the one you get when your flight is suddenly canceled. The next thought that enters your mind is “where are we going to stay?” U.S. economy chain Red Roof Inn capitalized on this by having a large number of hotels close to major airports.
During the busiest flight seasons, tens of thousands of passengers can become stranded every day. By looking at big data correlating weather conditions and flight cancellations, plus the fact that many travellers would be browsing on mobile devices, Red Roof Inn’s marketing team did a promotional campaign targeting those areas most likely to be hit by flight cancellations due to inclement weather. This ended up generating a 10% increase in business in those areas.
Loyalty is a Commodity that Can’t Be Bought
The truth is, despite all of these innovative uses of big data, there’s still a fine line to cross between convenience and creepiness. Advertisers and brands are becoming smarter about what information they use, when they use it, and how. In the not so near future, the question might not be “what do you know about me?” but rather “How are you going to use what you know?”
Preventing the spread of illness and helping stranded travelers have a comfortable place to stay are two smart ways to help further cement customer loyalty beyond just the pure common sense application of helping out your fellow humans, but being able to predict things as intimate as pregnancy, or how the weather might affect your hair could be getting a little too cozy with customers for comfort.
The fact is, loyalty is a commodity that can’t be bought, and well-known brands are scrambling trying to get their share of customer engagement. How successful they will be depends on many factors, such as their willingness to embrace big data and use it effectively.
But now it’s your turn. What are your thoughts on how these companies are using data on and about their customers? How do you feel about ads like these? Share your thoughts with us in the comments below!
About the Author: Sherice Jacob helps business owners improve website design and increase conversion rates through compelling copywriting, user-friendly design and smart analytics analysis. Learn more at iElectrify.com and download your free web copy tune-up and conversion checklist today!
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