By leveraging Big Data your business will gain 60% in your operating margin, this according to a new study by McKinsey Global Institute. Successfully using Big Data will impact 5 different functions within your company like Supply Chain, Operations, New Business Models, Merchandising and Marketing.
Let’s focus on the last function, Marketing, an area where Sociocast data intelligence has much experience.
From the report: Some of the most effective ways to leverage data within the marketing flow include:
Cross-selling. State-of-the-art cross-selling uses all the data that can be known about a customer, including the customer’s demographics, purchase history, preferences, real-time locations, and other facts to increase the average purchase size. For example, Amazon.com employs collaborative filtering to generate “you might also want” prompts for each product bought or visited. At one point, Amazon reported that 30 percent of sales were due to its recommendation engine. Another example of this lever is using big data analyses to optimize in-store promotions that link complementary items and bundled products.
Location-based marketing. Location-based marketing relies on the growing adoption of smartphones and other personal location data-enabled mobile devices. It targets consumers who are close to stores or already in them. For instance, as a consumer approaches an apparel store, that store may send a special offer on a sweater to the customer’s smartphone. Nearly 50 percent of smartphone owners use or plan to use their phones for mobile shopping.
In-store behavior analysis. Analyzing data on in-store behavior can help improve store layout, product mix, and shelf positioning. Recent innovations have enabled retailers to track customers’ shopping patterns (e.g., footpath and time spent in different parts of a store), drawing real-time location data from smartphone applications, shopping cart transponders, or passively monitoring the location of mobile phones within a retail environment.
Customer micro-segmentation. The next marketing-related big data lever is customer micro-segmentation. Although this is a familiar idea in retail, big data has enabled tremendous innovation in recent years. The amount of data available for segmentation has exploded, and the increasing sophistication in analytic tools has enabled the division into ever more granular micro-segments—to the point at which some retailers can claim to be engaged in personalization, rather than simply segmentation. In addition to using traditional market-research data and data on historical purchases, retailers can now track and leverage data on the behavior of individual customers—including clickstream data from the Web. Retailers can now update this increasingly granular data in near real time to adjust to customer changes.
Sentiment analysis. Sentiment analysis leverages the voluminous streams of data generated by consumers in the various forms of social media to help inform a variety of business decisions. For example, retailers can use sentiment analysis to gauge the real-time response to marketing campaigns and adjust course accordingly. The evolving field of social media data analysis plays a key role because consumers are relying increasingly on peer sentiment and recommendations to make purchasing decisions. A variety of tools has emerged for the real-time monitoring and response to Web-based consumer behavior and choices.
Enhancing the multichannel consumer experience. Enhancing the multichannel experience for consumers can be a powerful driver of sales, customer satisfaction, and loyalty. Retailers can use big data to integrate promotions and pricing for shoppers seamlessly, whether those consumers are online, in-store, or perusing a catalog. Williams-Sonoma, for example, has integrated customer databases with information on some 60 million households, tracking such things as their income, housing values, and number of children. Targeted e-mails based on this information obtain ten to 18 times the response rate of e-mails that are not targeted, and the company is able to create different versions of its catalogs attuned to the behavior and preferences of different groups of customers.
Click here to download the entire report from McKinsey
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