A recent study by leading management consulting company McKinsey & Co confirms what so many of us already know - that Big Data is big news. The report, entitled "Game changers: Five opportunities for US growth and renewal," suggests that effective use of Big Data could fuel up to $325bn incremental annual GDP in retail and manufacturing by 2020. To this end it is more vital than ever for companies to manage their strategy when it comes to Big Data effectively – as those that do stand to gain the most.
Yet for many brands, the term ‘Big Data’ alone still strikes a certain element of fear – it can sometimes to overwhelming just to know where to start. For any retailer looking to cash-in on the data they have easy access to, we believe there are essentially four steps that they need to consider.
1. Analyse search terms
Search terms are one of the most powerful insights into customer behavior on your site. You should evaluate your most frequent online searches to find out what the “hot” search terms are in your online shop and whether you are delivering relevant results to them. Not only will this allow you to move with the times in terms of what people are searching for, but it will also reveal whether there are gaps in your product range that could be quickly satisfied to deliver a boost to sales. Alternatively, like Lovehoney, you may be lucky enough to uncover the need for an entire new range of products to satisfy your customers’ needs.
On top of this, you should look at the types of words your shoppers are using. If they are using a lot of trend and slang words, then adjust your on-site search and navigation system so that these words are leading to a matching product selection. This again will help you boost your conversion rates, and so ultimately your sales.
It may seem surprising, but one of the most important tools for any retailer is their “zero-result” pages. By looking at which searches have delivered no result and asking why no products were found, you can see where the gaps in your online offering are. Are customers misspelling product names? In which case you need error tolerant search. Are you lacking products in your online shop? In which case you should think about offering them, or at least suggesting, appropriate alternatives.
You should be evaluating these figures as much as possible – ideally on a weekly basis.
2. Combine your offline and online stores
Today, as retailers you need to think in a multi-channel way; after all your customers will do. They will expect the same level of shopping experience both online and offline. This means, for example that you need to – where possible – make information available in-store that is available online, from key products being searched for to the most popular colours. Of course, you can go further than that and use location-based services to target customers near a branch with special offers. By linking your online data to your physical stores and vice versa, you are creating a seamless experience for the customer, which will help convert browsing to buying in both environments.
For brands the focus needs to be on reducing the number of touch points in the user journey and creating a holistic shopping experience that incorporates online and offline. Increasingly, consumers want to make a purchase online, or using their smartphone, and then simply pick the item up in store without queuing for it. This is definitely one of the ways in which online and offline channels will combine in the future.
3. Make the most out of your product data
As many as 55% of visitors to online stores are not completing purchases because they feel they are lacking information about the product. If you are selling multiple-brands from various data sources, it is essential to match and combine the products and create a structured, master product database, that includes all relevant information around a given product, for example any descriptions such as “made in…”, “texture”, “fit”, “style”.
There are packages on the market that allow you to do this automatically and then generate filters around these specific attributes. We handle on-site search for over 1,000 top European retailers and we are seeing more and more search phrases containing attributes or brands together with a specific product. To capitalise on this, you need to be able to set weightings within a structured database, to ensure that your customers only find the relevant information when they are searching with multiple words, such as red, suede, high-heeled shoes.
4. Personalise the customer journey
Ask yourself key questions such as which colour is the most popular in your store, which brand people most often select when it comes to faceted search and which categories are clicked most often? By doing this you can dynamically change the orders or priority of the filters on your site and also rank your products according to the most popular attributes. So, for example, if a lot of customers are searching for T-shirts and then select the “men” category afterwards, the men’s products will be ranked higher in future searching.
Analysing individual user behaviour is as valuable to online retailers as analysing “wisdom of the crowd” behaviour. But this must be done in context. If a customer buys a number of bikinis on a website, it is no use offering deals on the same type of product six months down the line when the same customer has returned to look for a winter coat.
Data is the one of the most powerful tools at a retailer’s disposal when it comes to making the individual shopper journey as targeted as possible, and ultimately converting browsers into customers. By following these four simple steps, and enhancing the usability of their sites, retailers are putting themselves in control of their data and giving themselves the best possible opportunity to create sustainable revenue and conversion rate growth for their online store.
By Carsten Kraus CEO and founder, FACT-Finder.com.
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