Big Data Connects Online/Offline Fashion Shopping Experiences

Posted on by Jason Hahn

If they’re savvy enough, retailers can leverage big data to create a better experience for shoppers both online and offline.

Florent Peyre, cofounder and COO of retail analytics platform Placemeter, offered one hypothetical example how at a recent panel on fashion retailing and big data sponsored by Style Coaliton.

Imagine, he said, surfing JCrew.com. You add a pair of brown loafers to your cart but aren’t quite ready to purchase. The next day, as you walk by one of their retail stores, a J.Crew app pings you with an alert that those shoes are available in your size in that very store, and if you buy in the next half hour, you’ll get 10% off your purchase.

“That [would be such] a clever way to leverage those data points,” Peyre said. “And I would actually take that offer immediately and convert.”

This kind of data isn’t limited to on-site activity, noted Elizabeth Holmes, a reporter for the Wall Street Journal. For instance, mentioning your consideration of a purchase on Twitter is another way for retailers to discover an opportunity to engage. Brand mentions on social media channels are opportunities to understand customers in a broad way, though they’re difficult for brands to get a good handle of right now, she said.

Privacy and Big Data

The topic of monitoring what consumers do online and in stores and serving up personalized offers or recommendations brings up the obvious specter of privacy.

Jared Schiffman, founder of retail digital display provider Perch Interactive, notes that retailers have always had a lot of information on consumers—they just haven’t always done much of anything with all that data. Today’s younger generation is used to retailers taking more advantage of data to target them…but they want to know what they’ll get in return.

“It’s being really upfront about what you’re collecting and why you’re collecting it, and then showing the consumer how you’re using [data] to make the experience better for her,” noted Amy Jain, co-founder of jewelry marketer BaubleBar.

Social Hurdles

Consumer psychology and operational friction can present hurdles for the collection and use of data. Elyse Estrada, manager of client services for Foursquare,  offered an example of a retailer with 200+ stores and thousands of employees running a Foursquare special. Making this succeed might very well mean explaining to employees (and some customers) what Foursquare is and how it works. A newbie to the platform might be alienated by what seems to be too much effort on their part to participate.

Foursquare’s partnership with American Express, Visa and MasterCard (which gives discounts to users who sync their credit or debit cards with their Foursquare accounts) might help alleviate these types of problems for that social network. The benefit to consumers is that they don’t have to fumble for coupons, while the merchant benefits from the easier redemption process. “That’s kind of where the future of retail, payments and offers is going to go,” says Estrada.

The Online-Offline Connection

One trend that might seem backwards on the surface is the concept of e-commerce companies and startups taking their business into physical stores. Warby Parker, for instance, has opened a handful of storefronts, and Fab is in the process of opening more brick-and-mortar locations, but the question is why, especially when there’s already so much efficiency online?

To answer the question, Peyre pointed to a Bonobos survey, which found that its stores each saw double the average transactions versus online, and that repeat purchases happened 35% faster in-store versus online.

“These companies tend to know a lot about their customers, so they can place their stores very carefully,” Holmes said.

If a specialty store opened a thousand locations, the novelty wears off. “But if you are an online company, you know where your customers live and you ship to them and you can put stores where you have a loyal customer base to begin with. It really benefits them because they get really excited about the chance to actually see the product in person and buy it right away and have that sort of instant gratification,” she said.

Holmes added that physical locations can offer engaging and entertaining experiences. For example, a now-closed Warby Parker’s Annex location in Manhattan’s Meatpacking District offered visitors a photo booth where they could snap photos of themselves trying on eyeglass frames. Those photos could be emailed to them and subsequently posted on their social media accounts.

Jain cited two main goals for BaubleBar opening a physical location: community building and customer acquisition.

“We have so many very, very loyal fans and customers that are excited to experience us offline and then bring all of their girlfriends, wherever we are, in whatever city,” she said. “And for us it’s exciting because we get to introduce our brands and make it really fun and engaging.”

Jain also affirmed the findings of the Bonobos survey. “When a customer is being introduced to you in that really warm and friendly environment, their behavior, their subsequent purchases when they do come back online is much more interactive than some of the customers that we do acquire online.”

Fundamental Differences

Schiffman is curious to see how it all plays out. “I really do believe there is a fundamental difference in sort of the way that you behave in terms of – the psychology of online shopping versus the psychology of a retail space. In fact, I think it’s entirely different parts of your brain.”

While going to Zappos is a targeted activity that goes on until the searcher exhausts themselves or finds what they’re looking for, walking into a retail space is sort of like “entering the jungle,” Schiffman said. “I’m curious to see how online retailers apply what they do to the retail space and whether they can make that transition from one part of your brain to the other.”

Is merchandising becoming a lost art in this age of e-commerce? Peyre noted that in-store shopping is a “serendipitous experience” that’s more exploratory than online shopping, and that the surprise factor is “part of the charm of shopping physically.”

Estrada added that merchandising is a personal, human touch that’s lost when someone is just looking at e-commerce sites, adding that humans understand what it means to build wardrobes better than computers do.

“You have to serve up to the customer these surprise-and-delight moments that they didn’t even know about,” Holmes said. 

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