embracing analytics to boost profits and loyalty

Embracing Analy.cs To Boost Profits And Loyalty

Presented by Session sponsored by

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About CCS 2013

ü 9 Webinars, 4 Days

ü Sessions covering Mobile,

Social, Store Ops,

X-Channel, and more

ü Featuring industry

analysts and consultants

ü Free for Retail executives

www.retailtouchpoints.com/connected-consumer-2013

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About Retail TouchPoints

ü  Launched in 2007

ü More than 25,000 subscribers

ü Provide executives with relevant,

insightful content

ü  Free Resources such as White Papers,

E-book, Webinars, Research and

Podcasts

www.RetailTouchPoints.com

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BrightTALK

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Today’s Panelists

Pam Goodfellow Consumer Insights Director Prosper Insights & Analytics

Debbie Hauss Editor-in-Chief Retail TouchPoints

MODERATOR

Marc Schroeder VP, Industry Marketing Teradata

© 2013, Prosper®

Consumers’ New Normal 5 Ways to Identify Modern Shoppers

May 21, 2013

© 2013, Prosper® Disclaimer: Prosper Business Development and its affiliated companies (“Prosper”) make no warranties, either expressed or implied, concerning: data gathered or obtained from any source; the present or future methodology employed in producing the statistics; or the data and estimates represent only the opinion of Prosper and reliance thereon and use thereof shall be at the user’s own risk.

1 Confidence in the Economy is Unsteady

2 Pragmatic Purchasing Plans Continue

3 Spending at the Expense of Saving

4 Modern Shoppers Value…Well, Value

5 Looking for a Showroomer? Look in the Mirror

5 Ways to Identify Modern Shoppers

© 2013, Prosper®

Confidence in the Economy is Unsteady 1

25%

27%

29%

31%

33%

35%

37%

39%

41%

Very Confident / Confident in Chances for Strong Economy [adults 18+]

economic sentiment is volatile those very confident/confident in chances for a strong

economy climbed to 40.1% in April 2013

no consecutive months of increase since Q3 2012

evidence of fiscal cliff, payroll tax hikes, sequester taking toll on consumer psyche

Source: Monthly Consumer Survey

…yet the stock market is bullish: one out of three Americans judges the health of the U.S.

economy by the performance of the stock market

© 2013, Prosper®

U.S. Unemployment Rate / Labor Force Participation Rate

Source: U.S. Department of Labor: Bureau of Labor Statistics

Confidence in the Economy is Unsteady 1

employment

fewer counted as “unemployed” as an increasing number of consumers become discouraged / drop out of the labor force – driving this percentage down

official U.S. unemployment rate is in decline, yet the labor force participation rate is shrinking as well

0.0

2.0

4.0

6.0

8.0

10.0

12.0

61.5 62.0 62.5 63.0 63.5 64.0 64.5 65.0 65.5 66.0 66.5

Civilian Labor Force Participation Rate Civilian Unemployment Rate

Labo

r For

ce P

artic

ipat

ion

Rate

(%)

Civil

ian U

nem

ploy

men

t Rat

e (%

)

© 2013, Prosper®

2 Pragmatic Purchasing Plans Continue

In the last six months, have you made any of the following changes? [adults 18+]

30%

35%

40%

45%

50%

55%

60%

65%

Apr-0

7 Ju

l Oc

t Ja

n Ap

r-08

Jul

Oct

Jan

Apr-0

9 Ju

l Oc

t Ja

n Ap

r-10

Jul

Oct

Jan

Apr-1

1 Ju

l Oc

t Ja

n Ap

r-12

Jul

Oct

Jan

Apr-1

3

I have become more practical and realistic in my purchases

I focus more on what I NEED rather than what I WANT

3 month moving average


consumer spending while practical spending and focus on needs peaked

during the recession, consumers still haven’t reverted to their old habits

as of April 2013, more than half (53.4%) still focus more on what they need rather than what I want

when at the store, while nearly as many (48.1%) cite pragmatic purchase plans

© 2013, Prosper®

3 Spending at the Expense of Saving

Real Personal Consumption Expenditures

Source: U.S. Department of Commerce: Bureau of Economic Analysis

Personal Saving Rate

8600

8800

9000

9200

9400

9600

9800

10000

Apr-0

7 Se

p-07

Fe

b-08

Ju

l-08

Dec-

08

May-

09

Oct-0

9 Ma

r-10

Aug-

10

Jan-

11

Jun-

11

Nov-

11

Apr-1

2 Se

p-12

Fe

b-13

Billio

ns o

f Cha

ined

2005

Dol

lars

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

Apr-0

7 Se

p-07

Fe

b-08

Ju

l-08

Dec-

08

May-

09

Oct-0

9 Ma

r-10

Aug-

10

Jan-

11

Jun-

11

Nov-

11

Apr-1

2 Se

p-12

Fe

b-13

Perc

ent

spending / saving

how precarious is this balance for the stability/growth of our economy?

real personal consumption is increasing while 2013 personal saving rate levels have dropped to lows not seen since before the Great Recession

© 2013, Prosper®

3

90 Day Retail Outlook Score [adults 18+]

Source: Monthly Consumer Survey, Bureau of Labor Statistics, U.S. Census Bureau

future spending looking into Q2 2013, the Retail Outlook Score indicates

that the average direction of seasonally adjusted retail sales (excluding automobile dealers and gas stations)

will generally trend upward

Spending at the Expense of Saving

spending will likely be driven among upper income, luxury shoppers who generally spend on a higher level,

have a more solid financial footing, and aren’t as likely to be affected by fluctuating fuel expenses, rising food

prices, etc.

© 2013, Prosper®

Modern Shoppers Value…Well, Value

10%

14%

18%

22%

26%

30%

34%

38%

Jul-0

6 De

c-06

Ma

y-07

Oc

t-07

Mar-0

8 Au

g-08

Ja

n-09

Ju

n-09

No

v-09

Ap

r-10

Sep-

10

Feb-

11

Jul-1

1 De

c-11

Ma

y-12

Oc

t-12

Mar-1

3

Department Store Discount Store Specialty Apparel Store Linear (Department Store) Linear (Discount Store)

3 month moving average

Store Format Shopped Most Often for Women’s Apparel [adults 18+]

highlight: women’s apparel for women’s apparel, department stores have been

trending upward with shoppers, while discounters have relatively flatlined

while price is still an critical motivating factor, department store shoppers more value-driven, placing high

importance on quality, selection, brands available… as well as special sales and coupons

department store growth has largely been fueled by increasing loyalty toward Kohl’s and Macy’s – while

Walmart has been flagging


4

© 2013, Prosper®

Looking for a Showroomer? Look in the Mirror

Regularly / Occasionally Use Smartphone to Comparison Shop [among those who own a smartphone]

20%

30%

40%

50%

60%

70%

80%

90%

Adults 18+ Millennials Gen X Boomers Silent showrooming showrooming isn’t just a trend, it’s a full-fledged smart

shopping strategy

while Millennials and Gen X-ers are the most likely to comparison shop via their smartphones, this activity has

jumped 50% in the past two years among members of the Silent generation

Millennials = born 1983 – 1995 Gen X = born 1965 – 1982 Boomers = born 1946 – 1964 Silent = born pre-1946 Source: Monthly Consumer Survey

5

© 2013, Prosper®

Looking for a Showroomer? Look in the Mirror

Regularly / Occasionally Use Amazon’s Price Check App While Shopping [among those who own a smartphone]

the Amazon influence as of April 2013, nearly half of Millennials regularly /

occasionally use Amazon’s Price Check app while shopping

while Boomers and Silents are the least likely to be using the Price Check app, usage may rise as an increasing

number of consumers opt for smartphones over feature phones – and adopt this smart shopping strategy

Millennials = born 1983 – 1995 Gen X = born 1965 – 1982 Boomers = born 1946 – 1964 Silent = born pre-1946 Source: Monthly Consumer Survey

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Adults 18+ Millennials Gen X Boomers Silent

5

as consumers become increasing connected, the lines between in-store, online, and mobile retailing begin to

blur

retailers focused on a seamless, omnichannel strategy will be best positioned to speak to and perhaps capture

today’s flitting consumers

© 2013, Prosper®

1 The economy remains a big question mark for consumers – with uncertainty likely leading to hesitant spending, worry about employment, and financial well-being.

2 While practical spending and focus on needs peaked during the recession, consumers are still trying to maintain guarded spending.

3 Personal consumption expenditures are increasing, perhaps at the expense of savings. Luxury shoppers are likely driving the increase in spending.

4 Department store shopping is on the rise, appealing to consumers’ value-driven needs.

5 As consumers become increasingly connected, retailers focused on a seamless, omnichannel strategy will be best positioned to speak to and perhaps capture today’s flitting consumers.

Key Takeaways

CUSTOMER CENTRICITY THROUGH DATA DRIVEN MARKETING Marc Schroeder, Teradata Applications, VP Industry Marketing

19 5/20/13 Teradata Confidential

Increased Strategies Around Customer Facing Mobility and Social Marketing •  Accounts for up to 9% of Retail Sales •  By 2014 Almost Every Mobile Phone will be a Smart Phone •  Influences about 50% of Store Sales

Retail Trends

19



Consumers Control Their Experience •  Flexibility, Transparency, Relevancy and Convenience

Retail Trends

20

email

Direct Mail

In-Store

Mobile

SMS Offers Web

Social




Retail Trends

21

Impacts of Showrooming •  According to recent research 1/3 of customers purchase

from a competitor after researching prices online at the store


Increased Strategies Around Customer Facing Mobility and Social Marketing •  Accounts for up to 9% of Retail Sales •  By 2014 almost every mobile phone will be a smart phone •  Influences about 50% of Store Sales


Retail Trends

22

Impacts of Showrooming •  According to recent research 1/3 of customers purchase

from a competitor after researching prices online at the store

Showrooming Impacts all Retail Segments


Strategies that Retailers a putting in place to counter the act of showrooming

Is Showrooming a Threat to Retailers

•  Price Matching •  Not Sustainable

•  Specially Featured White Labeled Products

•  Product Centric vs. Customer Centric

•  Products only unique for a small amount of time


So if not price matching then what…

Retailers need to develop a multi-prong approach that focuses on customer centricity

•  Use price matching sparingly




•  Empower their Associates with Data and Offers to be Used for each Unique Customer



So if Not Price Matching Then What…

Retailers Need to Develop a Multi-prong Approach that Focuses on Customer Centricity


•  Extended Warranties

•  Use Price Matching Sparingly





•  Extended Warranties •  Loyalty/Reward Points






•  Extended Warranties •  Loyalty/Reward Points •  Enhanced Convenience/

Service



More Efficient & Effective Marketing

•  Creates Relationships •  Drives loyalty & satisfaction •  Saves on agency costs •  Lets the marketer focus on creative,

messaging, offers •  Increases average purchase price •  Store/product/brand recommendations

Better Customer Experience

•  Channel preference/convenience •  Ability to easily find Product/brand

information •  Relevant & timely promotional

incentives •  Highly personalized communications

delivered more frequently

Product Info Incentives Category/ Brand Interest

Customer Centricity Engagement Channels


Marketers Face Big Challenges: •  Leveraging Data Across the Organization

•  37.5% of retail marketers agree that silos within Marketing prevent them from having a holistic view of a campaign across channels

•  Integrating the Digital and Physical Worlds •  Only 25% of retailers create a single view of all customer

actions (purchases, call center interactions, web history, etc.)

•  Optimizing the Customer Experience •  Only 22.5% of retailers routinely use Data Driven

Marketing strategies to customize marketing messages and offers to improve customer experience

•  Analyzing marketing Initiative Effectiveness Across Channels

•  58% of retailers claim the top obstacle preventing retail marketing organizations from applying data to make more informed decisions is their existing technology is inadequate, outdated

Retail Marketers are Faced with Challenges in Delivering a Customer Centric Experience


Customers Customer Interaction Management

Marketing Analytics

Marketing Operations


Customer Engagement

Real-time Interactions

Key Questions from Retail Marketers

What customers

match certain social

behavior?

What message should I send

next?

Where is the customer

engaging with me?

What has the customer purchased?

How do I attribute value

to the channels?

What have I learned about my customers?

How should I respond to the

customer?

Where should I spend my marketing

dollars?


Data Driven Marketing Drives Customer Centricity

• Analyze Customer Interactions • Discover Customer Behaviors •  Visualize Social Relationships

• Deliver Relevant, Targeted Messages •  Track Customer Response •  Ensure Governance and Compliance

•  Connect Data Across the Enterprise • Understand Customer Behavior • Deliver Self-Service Analytics in Minutes

• Optimize Spend Across Channels •  Enable the Next Best Action •  Streamline Campaign Execution


Key Marketing Business Challenges

•  Need to drive consistent messages across multiple channels

•  Want to adjust marketing spend based on performance

•  Need to gain insight to understand the right message to

communicate

Engage the Customer with Relevant Messages

•  Desire to evaluate past behaviors to understand how to best engage

the customer

•  Need to empower marketers to engage customers with relevant data

•  Want to make social connections and understand the relationships

Gain Meaningful Customer Insights

Develop a Full Perspective of the Customer

•  Desire to leverage all enterprise data to drive decisions

•  Need to make decisions based on data; not gut feel

•  Want to have a complete view of the customer, regardless of

channel used

Integrate & Understand

Analyze & Discover

Act & Optimize


Integrate & Understand Customer Success

•  To grow, DSW knew it needed to increase it rewards program members, who tend to purchase more

•  Needed information from all channels to build right incentive to drive behavior

•  Data infrastructure was unable to connect customer experience from both in store and online

•  Teradata Integrated Data Warehouse allows capture of customer input from all channels

•  Robust system can quickly scale to support the 18 million DSW Rewards program members

•  Front-line employees are now using data to differentiate DSW from the competition

DSW has:

•  Increased loyalty program customers

•  Increased average market basket size

•  Delivered more targeted marketing, driving customers to appropriate channel

•  Climbed to the number 2 spot in market share

DSW is a leading US shoe retailer, with goal of being America’s favorite place for shoes. Connecting with customers is how DSW propelled itself into the number 2 position in market share.

Challenge Solution Results


Analyze & Discover Customer Success

•  Preserve a loyal base while building the eBook business

•  Create a multi-channel

behavioral view to drive segmentation & targeting strategies as well as marketing spend

•  Incorporate data from digital devices like the Nook, website, contact center, in-store kiosks & in-store point of sales.

•  Behavioral Analysis of Paths to Purchase: Teradata Aster MapReduce Platform joins customer data and analyzes multi-channel paths to purchase

•  Organic & Planned

Touch Marketing Attribution: Goes beyond single-touch insight to provide guidance to marketers

“The multi-channel, multi-touch marketing optimization insights that the Teradata Aster platform provides have been critical to transforming our company.” -  Mark Parrish VP of Retention and Loyalty. •  Reduce churn: analytics

from 5-6 hours previously to now 20 minutes

•  Increase conversions from recommendations

Barnes and Noble was a leading retailer of physical books, video, music and more. Over the past few years, Barnes and Noble has shifted from a physical seller of books to a digital technology company with eReaders with the Teradata Aster MapReduce Platform



Act & Optimize Customer Success

• Needed a solution to assist in the kick-off of their Customer Centric Marketing program

• Wanted to re-launch the Buzz Club Rewards customer loyalty program in all of Big Lots’ stores

• Required an integrated marketing solution to carry these out


Due to instrumental new and revised marketing initiatives, Big Lots was in need of a technology refresh to help them succeed in bringing these programs and plans to fruition while ensuring their effectiveness.

• Using Teradata Campaign Management Big Lots segmented customers better to allow for better messages and offers

• Using Email Marketing, Big Lots created more personalized e-dialogues for more effective communications

• Using Campaign Management, Big Lots collected, maintained, evaluated and analyzed buying patterns of customers

• Reduced costs by phasing out preprint distribution

• Realized revenue lift from existing customers

• Increased average market basket size

• Performed RFM analysis to determine how recently a customer has purchased, how often they purchase and how much the customer spends

• Retained members of the Buzz Club Rewards program


Technology-Enabled Customer Centricity

Workflow & Rules

Plan & Spend

Assets & Offers

Source Data

Product/ SKU

Inventory

Sales/ POS/

Franchise

Supplier

Promotional/ Loyalty Data

Strategic Insight and Marketing Processes

Seamless Customer Engagement / Experience

Call Center

ATM/ Kiosk

Email

Mobile

Channels Customers

Sales

Customers

Partners

Social Media

Web

Digital Marketing

Acquisition/ Loyalty

Campaign

Customer 360 Data

Warehouse

Mining Modeling

Reporting Trending

Profiling Segmenting

Big Data

Customer-centric Data Management

Assets Multi-Channel Real Time Marketing Management


Marketing Analytics


Real-Time Decisions Experiment & Iterate

•  Social Graph •  Multivariate testing

•  Segmentation

Behaviors •  Path to Purchase

•  Attribution •  Sentiment Analysis

Results •  Spend •  Wins •  ROI

All Your Analysis

Digital Execution •  E-mail

•  SMS/RSS •  Blogs

•  Social Marketing •  Personalization •  Landing Pages

•  Multi-channel Campaigns

Marketing Management •  Planning

•  Dashboards •  Workflow

All Your Interactions Cloud •  Web •  Mobile •  Social •  eCommerce •  Search •  Mobile •  Ad Placements •  Tags •  Visitor Clickstream

Applications •  POS •  Care •  OSS/BSS

Digital Data Management •  Weblog Analysis & ETL •  Web Intelligence Data Model •  Workload

All Your Data

38

Tools to Optimize Performance


•  Integrate and Understand your Customers >  Pull data across your organization (offline, online, inventory/

warehouse, social, call center) into a single platform to create a comprehensive view of your customer and your operations

• Analyze and Discover >  Enable big data analytics to understand what is driving customer

behavior like path to purchase, or causes for abandoning the online basket as well as what and who influences your customer purchasing behavior

• Act and Optimize >  Leverage the insights and analytics, empower customer touch

points including your in-store personnel with the information and ability to deliver relevant and specific offers to each consumer

In Summary the Key to Customer Centricity


THANK YOU

#CCSeries13

Q&A

#CCSeries13

Q&A // Panelists

Pam Goodfellow Consumer Insights Director Prosper Insights & Analytics

Debbie Hauss Editor-in-Chief Retail TouchPoints

MODERATOR

Marc Schroeder VP, Industry Marketing Teradata

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Leveraging The Power Of Data Today, 2 PM ET / 11 AM PT

Thank You For Joining Us

www.retailtouchpoints.com/connected-consumer-2013

The next Connected Consumer Series session…

embracing analytics to boost profits and loyalty

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department of labor

strong economy adults

monthly consumer surveyyet

personal saving rate

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thelabor force

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