eCommerce Analytics

I’ve been reading a lot recently about the current squeeze on baby boomers and how this is affecting the traditional targeting methods used by many retailers. Noreen O’Leary over at AdWeek had a pretty good article last week on how the recession is weighing on the minds of boomers getting ready to retire – so much so that many have already curbed spending and are starting to discard brands that now seem too expensive or luxurious.  This is a huge problem for many retailers – baby boomers are the heart of many businesses and represent the best and most profitable segments. So what’s a retailer to do?

Read Appealing to Baby Boomers through Enhanced Cluster Analysis »

I have to admit that it’s been a while since I’ve written on this Istobe blog, but for good reason. My wife and I welcomed a little girl into the world (Vivian June) on December 28th and have been battling sleep deprivation and dirty diapers ever since (and yes, she’s definitely worth it).  The bad news is that I just haven’t had much time to read all of the news feeds and blog posts that I would have liked to over the course of the last few weeks. So, as I looked blurry eyed through my blog posts and news items this morning, I noticed a few articles that point out some important marketing trends for retailers in 2009:

Read Marketing Trends For Retailers in 2009 »

With so many reports out there talking about why retailers are going to be taking such a hit this year, I thought it might be worthwhile to focus on the positive. The down economy has opened up several opportunities for retailers to try out new and interesting ways of reaching their customers.  I wanted to share a few of these with you.

• Read Surviving the Holidays: 5 Marketing Tips for Retailers »

With today’s news peppered with articles about the possible demise of Circuit City, the sinking Dow, and the continued decline in consumer spending, many companies are concerned about how their customers are going to respond to the tough times ahead. Several online retailers are already going down the discount path to try and get customers to spend their money early– well before their credit dries up. I’m sure many of you have already been hit up like I have with numerous discounts from shops that don’t typically give discounts – I’ve been surprised by the recent emails I’ve received from the likes of JCrew, a company that never seems to discount their merchandise.

Read Finding Customers Who Will Weather This Storm: Customer Segmentation in a Down Economy »

Being a Boston-area, MIT-based company, Istobe always pulls for other Boston-area, MIT-based companies. And this goes double for companies in the customer analytics and targeted email realms. Such is the case with Constant Contact, one of the email service provider (ESP) titans out there. And now we get a new survey from Constant Contact that echoes our ramblings at Istobe. email marketing is becoming more and more important for small businesses as the economy stumbles into the Christmas season.

Read Constant Contact Survey Shows Small Businesses Will Rely on Email Marketing this Holiday Season »

With the holiday season upon us, and with the specter of economic downturn no longer looming but now in full unfurling, the hue and cry for free shipping to draw customers has never been greater. Almost everyone insists that drastic price cuts and coupon-like free shipping are necessary evils to keep your customers from the competition. But I would urge smaller retailers to resist giving up margin and making deal-seekers of their entire housefile. Instead they should get more personal.

Read Retail Marketing Strategy Should Rely More on Personalization, Less on Free Shipping »

I had planned to write about new businesses and business concepts that I observed at the unConference last week. But given the economic meltdown that only seems to be accelerating, I thought that I’d better continue along the lines of Chris and Doug the last two days and address how multi-channel retail businesses can profit from customer analytics in an economy where consumers are wary of spending money. The truth: customer analytics will better help you protect your customer base from larger retailers who dangle lower prices.

Read Protecting Your Customer Base in Bad Economic Times »

Since every news site and blog I look at seems to be focused on the economy, I felt it only appropriate that I change it up a bit from my usual analytics rants and write a post that looks at the recent financial concerns.

Read What’s happening: the economy and analytics »

Participated in the MassTLC unConference as a sponsored entrepreneur last Thursday (thanks Bill Warner) and came away with the impression that the Boston startup community is still thriving despite the continuing downturn in the economy. However, money is apparently going to be a much scarcer resource for startups in the coming year.

Read MassTLC unConference Serves Startups Economic Reality Check »

With today’s news that the retail sector is experiencing a slowdown, now is a better time than ever for multi-channel retailers to do two things: turn to cheaper forms of advertising (email) and use quick-return customer analytics to compete with gargantuan discounters like Wal-Mart that threaten to swallow retail whole. The truth is that Wal-Mart will continue to invest in analytics during the tough economy because they will see immediate ROI from understanding which customers are poised to buy, which items they want, and how much those customers are willing to spend. I can think of two, good reasons for smaller multi-channel retailers to follow suit.

Harvest your current customers
Most would say that the thick of a poor economy is a poor time to invest in new marketing projects. If these projects are tied to new customer acquisition, I might agree. It’s damned expensive to acquire customers and you tend to forget what you already have while you’re out prospecting, buying lists, etc. Sometimes, the answer is in front of you. In a poor economy, isn’t it imperative that you retreat to your base? Multi-channel retailers need to figure out ways to:

A. Not lose your current customers to competition (like Wal-Mart)
B. Harvest your existing customers by making them feel as though you understand them

Really, achieving B is the answer to question A. A redoubling of your customer service effort will always make your customers more loyal and less likely to jump ship. But we have to remember that larger players can always offer deeper discounts in an effort to combat your superior customer understanding. One way around this is to deepen your customer understanding on the marketing front with timely, personalized emails to your customer base. Ultimately, if you can address your customers’ needs first - make your customers offers at the cusp of when they need those products - then you are likely to win their business. This is the advantage that predictive models based on your customers behaviors provide you: the ability to beat your larger competition on timing as opposed to discounting.

Quick ROI
Customer analytics like those that Istobe proposes are great because the analysis takes advantage of data that you, as a multi-channel retailer, already possess. You’ve already got a record of your cusotmers’ purchases. In other words, there is no up-front infrastructure or talent investment. What this ultimately means is that your ROI emerges quickly. How quick? Well, let’s just say that you’re in the black (or, green) around month two. This is especially true if you’re already used to sending your customer data to a co-op database (like Abacus or NextAction); you’ve already made your data collection and transfer investment. Now it’s simply about turning those investments to a different use - customer development not acquisition - by focusing how that data helps you pull in the monetary margins in your current customer base.