In this era of big data, online retailers have state-of-the-art data collection processes of their online customers. There is no shortage of data a company can purchase to figure out what makes their online consumers tick. However, online retailers are struggling to use that data to improve the consumer experience and increase profits in their online sector.
What Do the Experts Say?
Although the problem is widespread, this issue is both measurable and solvable. Among the several causes of unproductive data analyses are:
- Obsessing over low-impact metrics such as product affinities, but ignoring high-impact metrics such as need-states or emotional connections.
- Compartmentalizing teams, channels, and processes, which results in a poor customer experience.
- Technology limitations and under-utilization of current technology.
The Shopper Genome
The term coined for the conversion of online consumer data into meaningful insights is The Shopper Genome. The amount of communication and marketing vehicles for online retailers to engage shoppers are plenty. The problem is acquiring the right data, and using it in the right way. Six shopper characteristics should drive the data-collection process:
- Customer Decision Journey records every decision a shopper makes from the very beginning of their engagement (ideas, reviews) all the way to the purchase.
- Digital Channel Preference records how the shopper prefers to interact with the company (apps, email, and social media).
- Product Affinity records what product and product attributes a shopper prefers across all brands and categories.
- Response to Offers records how a shopper responds to various offers, which helps a lot in future marketing efforts.
- Life Moments and Context records shopper behavior through various moments in life that are universal to us all (birthdays, holidays).
- Demographics, Preferences, and Needs records both hard geographical data as well as location-based.
So what is the solution to cracking the shopper genome? While no company is perfect, the solutions can be broken up into two categories: people and technology.
- Online businesses need to acquire the best Customer Relations Management (CRM) software they can afford, and zealously seek to improve and optimize it.
- Third-party data is both available and valuable to any online business. If possible, they should seek out data packages that deliver the most impact on their bottom line, such as offline behaviors, tags, and others.
- Hire data specialists in-house or outsourced to monitor competitors and incorporate that data into current marketing efforts.
Instead of compartmentalizing staff by task, account, or media type, online companies should divide their staff into teams that completely manage specific customer segments. That allows the same people to have control of a specific type of customer’s entire journey from idea to purchase.
Online-based companies, as well as brick-and-mortar companies with an online sector, should put more resources into applying what data they already collect into meaningful insights, instead of chasing after more of it. The companies that do, stand to gain a bigger foothold in their market.
This piece was written from content originally published by McKinsey&Company.