The more you know about your customers, the better you can connect with them, market to them and ultimately give them what they want.
Creating a profitable retail business used to be a guessing game reliant on a bit of luck married with years of experience and observation. It required jewelry store owners to know not only which products their customers are interested in now, but which they might want next week, and how much they should order so as to achieve the fine balance between having enough and overextending themselves.
And what about targeting new customers? How can a retailer appeal to them if they’ve never met them and have no idea what they want? How should they optimize pricing so as not to undersell themselves, while at the same time avoid pricing themselves out of the market?
Big data is a way for retailers to easily find all the answers to these questions. It can help jewelers gain insights into their business, their customers and their products. Collecting and consolidating large volumes of data about what you’re selling, to whom, how much and at what price point, can be used to reveal patterns and trends. It can highlight what’s being done well, what can be improved and how to better understand a customer’s needs, shopping habits and potential future purchases. Considering customer acquisition costs are one of the highest expenses retailers have, any big data gleaned that can be used to market specifically to those who are interested is highly useful.
IN THE MARKET
“There’s a lot of outside data that’s collected on everybody in the web and that data can also be integrated with what’s happening on your platform,” says Marty Hurwitz, founder of jewelry consulting
group The MVEye. This data includes demographic information, age, marital status, household income,
birthday and even other shopping behavior. “Which makes it easier to market to them in a very precise
way,” explains Hurwitz.
Matt Guarnieri, a digital strategist for retail growth agency The Smithee Group, agrees, noting that data is the absolute most important thing to consider before initiating any type of marketing. “Data intelligence
should help lead marketing strategies,” he says. “Without data, you’re operating blind. Now, more than ever, it’s crucial that any marketing professional can find ways to access the data that is out there and
leverage it strategically and effectively.”
Inventory management can be a big pain point for retailers. Knowing what customers will want, and what
doesn’t appeal, allows store owners to put their money where their profit is, so it’s not sitting on the back shelf gathering dust.
“Stock management is a very big issue for retailers,” Hurwitz notes. “Big data allows them to monitor product selection so they can determine what products are most likely to sell from their inventory. They can really improve their stock value and weed out items that are not good sellers or not priced well, which will help them become much more efficient at what they post on site and what price they sell it for.”
Targeting your customer, understanding what they need and when they’ll need it is key to running a successful business, says David Marcotte, senior vice president of global research at retail advisory group
Marcotte believes it’s “an absolute requirement” for any reasonably complex retailer to have access
to, and be able to use, very large amounts of data. “Consider: I have a product and I have a shopper. And that’s interesting data, but that doesn’t tell me anything about the conditions that were prevalent for a further transaction to occur. That’s the most important information I can get at the end of the day. What closed the deal?”
Getting deeper insight into different aspects of what your customer will be looking for based on the information you have access to about their lifestyle can help you reach them in a more effective manner.
“Let’s say I have a shopper and I understand who they are – I know they’re living in a house, I have a location and then they start buying baby food,” says Marcotte.
“I think I can now make the natural assumption that they have a baby in the house, and I can use that information to start expanding my offerings to them and the way that I market to them. I can offer them baby formula.”
This could start with baby formula, but in two or three years’ time Marcotte says he expects that same family is going to be looking at school supplies and other things associated with having children, such as
family vacations, toys and so on. He can start to add time lines against that customer’s future purchasing
habits. “That becomes a rich enough environment that I can really tap into.”
Image: Signet Jewelers’ Zales banner. (Signet Jewelers)