NASHVILLE, Tenn. -- In the second day of NACStech in Nashville, Tenn., retailers hoping to take advantage of emerging data-driven consumer insight are finding technology difficult to navigate.
Wright Gore, a retailer with Oil Patch--Brazos Valley Inc., Angleton, Texas, is having a tough time just trying to extract data from his point-of-sale (POS). "The trick is to get the technology and POS system to do more than ring up a transaction," he said.
One of about 200 people participating in a conference session on data mining, Gore listened to speaker Dave Hamilton, head of global analytics for a data-mining company called Aimia Inc., Montreal, speak to how it develops databases, segments customers and creates action plans.
Hamilton spoke of three components driving transaction analytics:
- Shopper behavior--developing ways to understand and motivate shopper attitudes and behavior.
- Retail offer--create a format, product offer and promotions tailored to customer needs.
- Third-party relationships--nurture mutually beneficial partnerships.
Data-mining companies are able to extract, refine and deliver information that creates an "agent for change," he said, noting that having information is only a step towards effective data use. Implementing change is equally as important.
With every transaction, information about the payment, product and the customer comes into play. "After knowing transaction history, I can say if this person just had a baby or bought a new car," he said.
In the c-store business, Hamilton said frequency was a major goal, with increasing spend per visit adding less to the bottom line than a returning customer purchasing a whole new basket of goods.
Appealing to that customer may sometimes mean cutting items, especially if the goods are redundant or fail to add to the "breadth" of opportunity for the store set. For instance, some products are preferable as a second choice if a first choice is not available, he said. Knowing what those products are and having them on hand is critical.
Connecting transaction data to specific individuals so that targeted offers can result can be a complex matter, especially if no names, cellphones or e-mails are involved, Hamilton said. Ultimately, via loyalty programs, those core elements are desirable.
Meanwhile, other speakers addressed related topics of mobile marketing and mobile payment. In a session on the future of payments, speaker Tilak Mandadi, senior vice president of technologies for American Express Merchant Services, New York, asked the group how many believed mobile payment was an inevitable trend. Most raised their hands.
Mandadi followed by asking how many were willing to invest in the devices that will accept that form of payment. Only about 5% of the attendees did so. Mandadi pointed out the irony and quested whether one could happen without the other.
"If you don't have the merchant acceptance, you can't have [a new payment option]," he said.
Historic trends show that payment methods will take off in areas most fertile. For instance, mobile banking in countries like China is growing because of the lack of banking infrastructure. The United States is a different story.
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