Be it in stores or on sites, the dollars are in the data
We sat down with chief executives and senior managers from 20 retail real estate companies at the ICSC New York National Deal Making show in December, and each and every one had something to say about e-commerce competition. Something, but not the same thing. They fell into two groups.
There were those who said that online retail’s magnitude was greatly overblown. They held that the media over-covered online sellers and placed them on a lofty perch not backed by the facts. They had a point.
The U.S. Census bureau pegged e-commerce receipts at a mere 7.7% of total retail sales in Q3 2016. Starwood’s Scott Wolstein argued they were even lower, noting that an item bought online registers in the revenue column of a retailer’s website, but is deducted from the sales of a store if it’s returned there.
Then there were those who acknowledged that online’s sales impact is still minimal, but retailers who use that fact to dismiss e-commerce players as serious threats make a grave error. They asserted that pure-play e-commers lapped retailers in social media, purchase behavior and in-market status, a mastery that will shine when they move in next to them at shopping centers.
Trademark’s new director of marketing Jencey Keeton has direct experience in the power of leveraging online data at retail. Formerly Fossil’s digital marketing manager, Keeton clued us in that e-coms were way ahead in cleaning up their CRM systems and building data files filled with customer insights.
I once interviewed an executive of a cloud-based marketing agency who was putting together a second-party data service through which several top 100 retail companies would share customer data on an anonymous basis. When I expressed surprise that secretive retailers would share such resources, even with customer identities hidden, he laughed.
“We work with a top retailer whose online business is one of the largest in the country,” said Jacob Ross, the general manager of the Audience Product Business Unit at Media-Math. “Their online division was more eager to share the data with us than they were with their own brick-and-mortar business.”
It’s a scenario that plays out in the corporate headquarters of many traditional retailers. They may have highly developed and profitable online businesses, but the gold mine of customer data captured there is not shared with or leveraged by the brick-and-mortar business. And retail is hardly the only vertical stymied by the so-called siloing of data.
A new study conducted by the Winterberry Group for the Data & Marketing Association found that fewer than 20% of marketing executives surveyed were confident that their business processes and organizational structures were geared to optimal data usage. Asked what would best fix the problem, 60% said dissolving silos between business units in their companies.
We ran this by Mohannad El-Barachi, CEO of SweetIQ, a data-driven solution expert who works with retailers. He agreed that the melding of data between stores and sites was lacking: “If you look at where the industry is going as far as connecting with individual customers, few are getting any analytics on the in-store impact.”
I once asked a noted computer scientist to explain to me, in basic terms, the value of data to consumer marketers. “Someday soon,” he said, “companies will make more money from the customer data they possess than the products they sell. Data is the new currency.”
The retailers that work to break down the data barriers and harness that currency will be the ones to win the day.
Al Urbanski
[email protected], @AlUrbanski (Twitter)