Data-Driven Shopper Marketing, Part 3: Closing the Loop to Purchase

The key to data-driven success may hinge on tying digital insights to in-store purchases – aka “online to offline attribution.” Although still in its infancy, sales attribution may eventually enable CPGs to close this final loop and bring data-driven shopper marketing full circle.During a spring 2014 Best Buy analyst call, CEO Hubert Joly made one point crystal clear: Data-driven shopper marketing will be the key to Best Buy’s future.Joly announced that a new big data project called “Athena” will unify the chain’s online and offline data (past purchases, browser histories, locations, demographics, etc.), enabling it to develop more targeted, relevant and personalized customer communications for “key touchpoints” along the shopper’s journey. “With Athena in place,” Joly said, “over time we will be able to … implement programs for key buying occasions like gifting, life events and registry, [and] create greater engagement with customers for our loyalty program and our credit card offerings.”With that statement, Best Buy joined a long list of retailers and brand marketers searching for what’s been called “the holy grail” of data-driven shopper marketing success: The ability to close the final loop between online and offline (i.e., in store) behaviors, especially if the effort can directly tie digital activity to bricks-and-mortar sales and ROI.In a world where 88% of shoppers research products online before heading out to the store to buy (aka “webrooming”), and nearly half continue to hang on to their smartphones while they walk those store aisles, any ability to “tie back” or “attribute” what they see on their screens to what they do at the register is potentially game-changing.Stress potentially. “Data-driven shopper marketing is so new that it really hasn’t been defined yet,” says Catapult CEO Paul Kramer. “It’s like where digital shopper marketing (DSM) was five years ago.”There are also skeptics. “Data-informed marketing” that can reach shoppers on a complex path to purchase and find out not just what they’re buying but why, and how they reached that decision, will be a monumental challenge, says Ari Lightman, professor of digital media and marketing at Carnegie Mellon University and director of their CIO Institute. “There are certainly a lot of interesting things you can do that you could never do before. But whether you can tie it back to motivation and behavioral patterns and the idea of multitouch attribution is very, very challenging.”Personal RelevancyBut the grail quest is definitely underway. Like Best Buy, bricks-and-mortar retailers are under pressure to compete with the e-commerce giant Amazon.com – an enterprise built upon its ability to capitalize on customer data within a completely electronic shopping environment. “This kind of intimate knowledge allows you to personalize the entire brand experience,” says Brian Cohen, EVP at Catapult eCommerce (formerly Etailing Solutions). “Today’s shopper has little patience for waste in their lives, so if a communication is not highly relevant, you’ll lose their interest fast. This is why retailers like Amazon and CVS have dedicated so much time to personal relevancy.”The quest is being mounted on many fronts. Bricks-and-mortar retailers as varied as Kroger (a pioneer through its work with dunnhumby), Target and Walgreens (a relative latecomer) are using loyalty program data to measure insights and target individualized offers to households based on their purchase histories. Privacy and security concerns generally keep the details of these programs shrouded in secrecy. This has been especially true since 2012 when Target received some unwanted publicity for delivering coupons to shoppers that its “predictive analytics” program guessed might be pregnant.And then there’s the issue of retailer willingness to share their data with brand marketers. On the positive side are the growing number of examples of retailers who are partnering with brands on win-win data-driven shopper marketing promotions:CVS/pharmacy, for example, analyzed its ExtraCare loyalty data and found that members who buy allergy medicine also tend to buy facial tissues at the same time. This led to a collaboration with Sanofi-Aventis (the makers of Allegra) and Kimberly-Clark (who make Kleenex) on a two-month program that included an endcap display and a promotional presence on the CVS website.ConAgra Foods is buying retailer purchase data and crunching it along with other data sets to gain insights into an individual shopper’s buying habits – how often she buys Hunt’s tomato sauce, for instance, and how regularly she buys it along with related items such as pasta, or seemingly disconnected items such as diapers.And there have been reports of success with mobile-based promotions, such as Frito-Lay’s recent Bold Flavor Experiment, that combined unique bag codes and texting, data that was then tied to sales results.But according to Shopper Marketing magazine’s 2014 Trends Report, only one out of five CPG executives said they had access to all of the retailer data they needed. That’s one reason why so many of them have also told the magazine that they’ve tried to “go it alone” in measuring their online-to-offline sales-attribution efforts by:conducting test-versus-control store studies;timing digital overlays against a promotional calendar;deploying online tactics individually to tease out sales lift; andcomparing sales lifts to key metrics like click-throughs, sign-ups and brand surveys.“There’s an art to piecing all of these different types of data together,” says Lightman, and in his opinion, no one company is as of yet able to fully capitalize on it.Picking Up the PiecesMark Hertenstein, vice president of enterprise solutions at data giant Epsilon, agrees – to a point. “The reality is that nobody who is doing this work, whether it is with us, or Catalina or Datalogix, is doing it alone because nobody has all the pieces yet.” CPG marketers shouldn’t – and no longer have to – “go it alone,” he adds. Epsilon currently works with a variety of customers on targeting shoppers by matching online cookies and serving them online ads based on their offline behavior, preferences, household attributes and propensities, he explains.The technology is evolving and the tools are there now to close the attribution loop. “With some of our retailer partners – Staples being one – we can close the loop right there,” he says. “CPG can be a little bit harder if you have a retailer who won’t share data in the middle, but then we just bring in a Kantar or a Spire to do the match back and the analytic. It’s not always seamless at this point, but the more elements you can add from the retailer, brand and third-party-partner toolboxes, the stronger the program is going to be.”Although program details are usually held close to the vest, there are a growing number of partnerships between top digital shopper marketing practitioners and data vendors that deal with “data blindness” and effectively tie in-store sales back to online activities:Kimberly-Clark, for instance, recently announced that it is building its own deal database and CRM program through Revtrax, a New York-based digital optimization promotion and analytics company that specializes in trackable coupons. K-C has begun to track how often and where customers redeem digital offers, as well as how they share them with friends through social channels. It is also analyzing which consumers are the biggest social influencers and at which retailers their friends shop at the most. As a result, the company is compiling data that it can share with retailers – not just the other way around.Revtrax, which works with more than 100 national brands including Chobani, Heinz and Bayer, enables shopper marketers to execute measurable, retailer-specific single-use coupons. “There’s a need for CPGs to engage with each customer online and to track the resulting redemption and purchase offline,” says Jonathan Treiber, CEO of Revtrax, who notes that even retailers with vibrant loyalty programs could benefit from layering in this kind of tracking. “We have visibility into the digital journey consumers went through to get to their offer.”Facebook’s new “Custom Audiences” measurement, which is the result of the social networking leader’s partnerships with leading offline data providers, including Epsilon, can help brands determine which segments saw digital ads and how the views affected sales. Facebook might gather data on users who buy cleaning products containing bleach, for example, based on their past purchase behavior. A similar product could target potential customers with Facebook ads – and the brand might determine that a percentage of those who saw the ad bought $5 worth of its bleach-filled cleaning products in a month, far more than the Facebook advertising investment.The ROI, in this case, becomes clear. “This allows the CPG to gain insights that the retailer has traditionally had,” says Graham Mudd, Facebook’s director of advertising measurement, North America. “Instead of a one-size-fits-all approach to targeting, you can pick five relevant targets and measure the sales lift for each of those buckets – whether that lift came from more trips to the store or greater spend per trip. And we can provide sales lift breakdowns by gender, geography, age, whether they are previous buyers of the brands vs. new buyers of the brand.”Google recently tested a way to bridge the gap between online activity and in-store purchases. Its pilot program, dubbed “In-Store Attribution Transaction Reporting in AdWords,” launched in April with six advertisers, including the Michaels arts & crafts store chain. The program connects anonymous tracking cookies on user computers to in-store sales information.Shopper-research firm InfoScout, funded by dunnhumby Ventures (part of the same company responsible for Kroger and Tesco’s data analytics successes), recently announced a $16 million round of funding, which will help it expand its pool of mobile shopping apps meant to boost data access for CPG clients.And when it comes to the latest “bleeding edge” technological angle, in May, Apple shared its latest vision for iBeacon, its Bluetooth Low Energy (BLE) location trackers. Theoretically, at least, iBeacon should enable brands to instantly target and track consumers one-to-one while they navigate inside a store and pass through the registers.Hertenstein says that other innovative approaches are being discussed that will help facilitate the partnerships required to overcome data blindness. “If some of the parties simply aren’t willing to turn their data over to each other, one solution is to place all of that data together inside a neutral, third-party safe haven – a ‘black box,’ in other words – while we accomplish the targeting goal.”The Power of CollaborationA related approach is the Abacus Cooperative, a database of transactional data from more than 2,000 marketing companies, including a variety of specialty retailers, B2B companies, not-for-profits, publishers and cataloguers that have contributed on a blinded basis and maintained for shared targeting and marketing purposes. “If a marketer wants to find active kitchen accessories buyers,” Hertenstein says, “they can go into the cooperative and get the blinded transactions of all the relevant items bought at the various competitors, build up the best possible buying audience in America, and then market to them. There’s a lot of learning and a lot of power in bringing a data set like this together.”Catapult eCommerce’s Cohen agrees: “Imagine if a marketer was able to leverage its loyalty data in concert with a retailer’s purchase data? The result would be a true 360-degree view, and the ability to deliver a highly customized experience for the shopper vs. the mass communication approach we take today. Both the brand and the retailer would be firmly established as trusted, knowledgeable resources for their best shoppers … the true impact of finding the holy grail.”About the SponsorCatapult is the behavior-based marketing services agency that delivers accelerated business growth through the Art of Conversion™. This unique data-driven approach identifies the core, actionable insights that inspire brilliant creative with the power to convert consumers into shoppers, shoppers into buyers, and buyers into loyal advocates. Catapult delivers channel-agnostic solutions that are brand savvy, retailer smart, and digitally enabled. Catapult is an Epsilon brand.

P2PI MEMBERS

JOIN P2PI

You May Also Like

Cracking the Code on Incrementality in Brick-and-Mortar

Member Perspective: 5 Rules of Thumb for Data-Driven Omnicommerce Marketing