What do professional baseball, Google, political forecasting and retail all have in common? A love of big data. Whether that comes in the form of Billy Beane harnessing its power to build a better baseball team, Nate Silver taking all the fun out of the political horse race coverage, Google…well, being Google or retailers finding new and interesting ways to learn about and reach out to their customers – big data – and more importantly the ability to see the patterns behind the data – is big business, and seems to be growing.
And while this undoubtedly creates opportunities for retailers, it also creates a challenge. Billy Beane had Paul DePodesta, Nate Silver is a “quant” at heart and Google literally employs the largest fleet of data scientists on the Planet Earth. Retailers, generally speaking, do not keep data scientists on hand, for the same reason they don’t generally keep acrobats flying around – until very recently there was no need of such things.
However, in the mobile/digital/omnicommerce world that the 2010s are delivering, it largely goes without saying that big data is retail’s next frontier, but without context to go with that information, big data is just an opportunity to deal with a big mess of numbers.
And that is where Rubikloud thinks it can step in and help.
The Toronto-based startup picked up $7 million in Series A funding in late January to help retailers use a big-data approach to customer analytics. The round was led by TOM Group — a joint venture between Cheung Kong Holdings and Hutchison Whampoa — and Ule, the Chinese e-commerce platform launched by TOM Group and China Post.
“What Rubikloud is all about is helping the retailer really understand and know their customer at a deeper level,” Rubikloud’s Chief Product Officer Dan Theirl told MPD CEO Karen Webster in an interview shortly after their Series A round was announced. “Retailers don’t really want to go through all the expense or effort to hire all the expertise to create their own big data solution. They also aren’t looking to go searching in their data to find insights.”
And so, Theirl explained, Rubikloud instead is seeking to bring the insights to their customers.
“We ask the complex questions for them,” Theirl explained to Webster. “We are also asking the right questions behind the scenes for them and using those answers to generate insights on a regular basis for them. Instead of creating personas ahead of time, which a lot of marketers do and then try to figure out who sits in that persona that they can pitch a product to – we use a more advanced way to let the data segment itself.”
Those more advanced ways involve using their proprietary algorithms to cluster the data and then send retailers back the insights. Their data that feeds the Rubikloud platform is a combination of mobile, e-commerce and POS data that is sent through a backend feed. Theirl noted that what makes Rubikloud’s product a little different is instead of guiding their retail partners to a standard analytics dashboard, the Rubikloud product spits back a report with insights in “a very human, readable form.”
And with that form, Rubikloud hopes to help brands understand their customers a bit better. – particularly when it comes to unearthing consumers who have widely divergent browsing and shopping habits.
“For example, new moms, with fairly young babies, looked at and browsed more aspirational brands (makeup, strollers) but they actually ended up buying much less expensive necessities. This can is useful information when one is trying to make an upsell.”
“True,” Webster noted, “ but I look at the million dollar Ferrari all the time and I am sure they’d like to upsell it to me, but I am not buying a million dollar car. How are you able to determine what’s feasible for people to buy?”
Theirl noted that among things the platform can do, is pair consumer data with census and other economic data to draw a better profile of customers. But, he said, the point isn’t necessarily upselling on one particular good, but instead learning where the opportunities lie.
“You can start telling how much can you upsell and how much can AOV [Average Order Value] be increased at certain points and certain promotions to get people to reach to a very much higher level. You’re not going to completely shift their behavior, it’s about finding the right opportunities.”
Moreover he said, because brands have a tendency to decide their marketing audience “young mother, athletic 25 year olds etc.” retailers may be missing parts of their market without even knowing it.
“[Retailers need to] be able to customize their experience offline and online for each customer. What we’re finding is they’re certainly underserving a lot of markets because they are pitching their products and services to one set of customers, and completely missing others.”
Rubikloud is a young company – just over 18 months old. The new funding pickup will go in part to double Rubikloud’s headcount from 13 full-time employees today to between 25 and 30 by year’s end, increasing its data science team while also expanding more in North America and China. Rubikloud has already signed up a group of retailers focused in the fashion, health and beauty verticals, together generating about $25 billion in annual sales.
As for their specific client list? Webster asked Thierl if he would be willing to give PYMNTS a peek.
“Not at this time,” he told her. “We’re too young, and they’re too big.”
Maybe we’ll have to enlist the help of Rubikloud’s platform to find out.