Surprises make holidays memorable. The astonishingly perfect gift, the unexpected problem overcome, the fortuitous time spent with friends or family; these are the moments remembered long after the wrapping paper is cleared away and lights are taken down.
When it comes to business, however, surprises are best avoided. The more that is known about the future – about clients, trends and products – the better the company’s results. This is especially true in ecommerce, where building relationships with consumers and deciphering their preferences can be difficult. But it doesn’t have to be this way.
Audience data allows companies to overcome these challenges. Firstly, it provides insight into the online behaviour and interests of consumers, even on other websites or devices. With this knowledge, retailers can gain a better idea of who their shoppers are and what they want. Secondly, it gives online businesses the ability and intelligence to interact with customers in the right context of the individual’s path to purchase rather than anonymous members of a general mass. The convenience and experience of shopping online will be improved, motivating shoppers to return for future purchases.
Promoters of innovation
The benefits of audience data apply to both established companies and younger start-ups. But there are specific ways that companies in either group will find the data advantageous. Take for example Amazon. Founded in 1994 it quickly established its reputation as a pioneer of ecommerce. It became the poster child of a company that is innovative and unafraid of new frontiers, growing from an internet book dealer to an online megastore offering products for consumers’ every need. Yet despite its history of success, the company issued a profit warning for the fourth quarter, triggering a fall in its share price.
What is the cause of such losses for the retail giant and others who found themselves in choppy waters at the end of 2014? Is there realistic potential to undergird profits and solidify a place at the forefront of ecommerce?
Amazon has been busy with post-sale innovations (such as Prime Air, its pursuit of drone delivery devices), but arguably it hasn’t given the same priority to customers’ pre-sale experience. Sites like Etsy and Zalando are prospering by reaching shoppers in new ways and aiming to increase first-time sales, but this is eating away at part of Amazon’s base.
A knee-jerk reaction is to push prices lower but this cuts into profit margins and creates a reliance on price-based consumer engagement. While temporarily effective, this model is unsustainable and must be abandoned for wiser practices.
This is a place where audience data proves invaluable for established companies. It removes blindfolds so a retailer can know who its consumers are, what they’re interested in, and why they’re purchasing. With this knowledge, shopping experiences can be tailored to match the individual buyer.
For example, if a clothing retailer knows that half of its customers have been researching sportswear and gym memberships in January, it can promote exercise clothing on its homepage instead of outdoors wear. Inviting a well-known fitness expert as a guest curator, pursuing new partnerships with sporting companies and specialty brands, creating a special collection for achieving New Year’s fitness resolutions in cold climates, and reviewing inventory to ensure what is offered interests and adds value to target audiences are all possibilities with such insight. This positions the company as a relevant and valuable resource for shoppers, while also leading to sustainable growth in sales and client base for the company.
While benefited by audience data in the same ways as established companies, start-ups also gain information that plays a formative role in evaluating business models and making decisions regarding future development. Especially important is the ability to see whether precious money spent on marketing is translating to desired results in web traffic.
Take for instance a newly opened jewellery retailer that caters to teenage girls. With audience data, the company can judge whether site visitors are within its target group. If data reveals the majority of people visiting the site are interested in crocheting and walking canes, the business will have important information that guides its future decisions. It might adjust marketing tactics to reach the target in new ways, or – thinking of these visitors as grandparents of teenagers – the jeweller might promote gift wrapping, vouchers and selections of jewellery for special occasions.
Relevant and contextual customer engagement
Regardless of a company’s size or how long it has been in the market, success is found by putting the customer at the centre of every plan. Innovation is absolutely necessary, as resting on one’s laurels will never move a business forwards. But progress should not distract from the goal of taking care of consumers. Audience data certainly plays a unique and very necessary role in the pursuit of long-term growth and sustainable profits, but its greatest quality is that it helps retailers learn how to best serve their shoppers. And happy customers are the greatest sign of well-being for any company, even those in the increasingly competitive online retail market.
Kevin Tan is chief executive of Eyeota