“Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.”
That’s a quote from department store maven John Wanamaker, illustrating a conundrum for retailers (and merchants in general): Namely, you’ve got to reach out to consumers if you are going to convince them to buy your wares. But reaching out involves time and money — both precious commodities. Neither is good to waste.
Thus, in the age of Big Data, how to ensure that time and money are well-spent?
In an interview with PYMNTS’ Karen Webster and Nicole Jass, vice president of Data Products at Vantiv, the two delved into the ways insight (and new products) can be gleaned from Big Data, with an eye on cementing customer loyalty or forging new relationships in a hypercompetitive age of commerce.
Said Jass, initial efforts to reach consumers, at least done traditionally, begin with an advertisement or a similar prompt designed to lead consumers into mulling the shopping experience in the first place. Consider this advertising the first layer of product aimed at the consumer, akin to asking the question: How do we get ads “in front of the right eyeballs at the right time”?
With that initial outreach, said Jass, the importance is not just on trying to get it right the first time. It is equally important to measure and iterate as the retailer continues to engage with its target audience.
For the first time, companies are getting better at measuring online-to-offline attribution — a continuum of commerce of sorts, said Jass. Picture a person watching a YouTube video where a pair of boots from their favorite department store appears on screen. Stirred by the boots, perhaps that person decides to get in the car and purchase them. In this example, it may be difficult for the business to know exactly what media is igniting consumers’ desires, but, as Jass noted, “we are working with our customers to help connect many of these data points on their behalf.”
There may still be a bit of trial and error in place, Webster said, as inboxes pile up with emails and push notifications grow by leaps and bounds. Retailers are, of course, able to seize upon the knowledge of where and when a consumer has journeyed onto their site and what they sought. But now ad campaigns, promotions and suggestions around that search can be sent out with haste while the search is still fresh within the consumer’s mind.
There are two types of customers to be considered through different lenses to get the right product in front of the right people in the right format, said Jass. There is the new customer who has never been approached before and the loyal, recurring customer. The latter audience might be easier to approach — and here, for example, is where a company might craft a carefully, well-targeted catalog highlighting furniture, secure in at least some knowledge that the recipient of said catalog (paper or digital) likes the brand.
When it comes to prospective customers, leveraging data through ad tech players means the guesswork can be removed from the equation for retailers. But even if retailers have the right products in place, the right advertising and the right media (YouTube and elsewhere), there lurks one great lure or deterrent — price. Might this be a part of the product equation that can be leveraged for loyalty?
As Webster noted, the boots on YouTube may be enticing enough to result in a sale, yet for the business, all may be lost if that boots-minded consumer makes a beeline to the retailer that has the same pair of footwear at a cheaper price. To keep the prospective customer from going somewhere else to buy those boots for $10 less (along with free shipping), asked Webster, how can merchants keep the sale in their own channel — in an omnichannel world?
From a data perspective, a retailer would want to look at how they can price match, as loyal customers would already be predisposed to buy from favored establishments, Jass explained. Payments may offer some help as a strategic connector between a consumer and a shopping experience, said Webster. Taking friction out of the process, such as with Apple Pay, where data need not be entered time and again, can add a layer of convenience which, in turn, drives loyalty.
Thus, when thinking about data products, savvy merchants focus on wrapping insights about the shopper’s “journey” around payment methods, which Jass said extends to Vantiv’s issuing customers as well. For merchants, key considerations include whether they should tackle private label offerings or whether they should offer co-brands. Adding to those deliberations, she said, tongue in cheek, “I am not sure I can count the alternative payment methods out there.”
Preferred payment methods can also change according to a given demographic, and merchants should be aware of who pays when, where and how, along with gleaning insight into why.
After all, said Jass, the choice of card or payment is being made long before the checkout. Increasingly, an Amex card (to give but one example) may be a preferred choice in a mobile wallet or for recurring transactions. That’s an important consideration and data point for issuers, because the choice is being made ahead of the last mile of the transaction. Incentive and convenience programs can make all the difference to “help get a card loaded and saved.”
No conversation about commerce would be complete without a discussion about fraud. For Jass personally, coming from the marketing world to Vantiv and combining fraud and data teams has led to a holistic understanding of the shopper. Collecting data points and then creating predictive models helps explain how the shopper will evolve and the stickiness of that shopper across different merchants and categories.
Fraud prevention, she stated, is “really about understanding what a good transaction looks like and noticing the moment where something doesn’t feel right and fit right and goes bad.” Vantiv, through its data products, can stop the bad transactions and help the good ones go through, she said.
Throughout the holiday shopping season, merchants must “make sure that they take the friction out and make sure that they have various payment methods available,” measuring effectiveness well. “They make a lot of money, but they spend a lot of money this time of year,” she said, echoing the famous Wanamaker statement. Retailers must recognize “what’s driving or not driving the impact they are looking for.”