Commerce's New Connections
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The document discusses how retailers can leverage social networking and the internet of things to drive personalization and engagement. It notes that traditional marketing approaches are ineffective due to information overload. Personalization is key, but retailers struggle to truly understand customers due to fragmented data. The rise of connected devices and social media provide new insights into motivations, interests and preferences that can be used to engage customers and improve targeting. Leaders are using these insights to better segment customers and tailor assortments, offers and interactions.
Commerce's New Connections
- 1. Commerce’s New Connections Leveraging Social Networking and The Internet of Things to Drive Personalization and Engagement
- 2. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Competition for Consumer Attention Continues to Grow…
- 3. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL 500/Day 5,000/Day Image Courtesy: Wikipedia Image Courtesy: Wikipedia
- 4. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL 30,000marketing messages per day Today consumers encounter almost -Yankelovich Consumer Research Image Courtesy: Wikipedia
- 5. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Spray & Pray Marketing Hence the Fate of Most Marketing Messages… 1 – Silverpop e-Mail Marketing Benchmarks Study 2 – Clickz 83%Retail e-Mail Open Rate1 Unopened… One-to-One Personalization
- 6. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Spray & Pray Marketing Hence the Fate of Most Marketing Messages… 1 – Silverpop e-Mail Marketing Benchmarks Study 2 – Clickz 97%Retail e-Mail Click-Through Rate1 Ignored… One-to-One Personalization
- 7. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Spray & Pray Marketing Hence the Fate of Most Marketing Messages… 1 – Silverpop e-Mail Marketing Benchmarks Study 2 – Clickz 66%"unsubscribed from e-mail that I had opted into because it wasn't relevant”2 or Worse. One-to-One Personalization
- 8. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL And Meaningful Loyalty Remains Elusive Source: – Colloquy $48 Billionloyalty rewards distributed annually 36% Effectivein earning repeat shopping visits $32Bessentially wasted
- 9. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL So…What’s Missing? PERSONALIZATION
- 10. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL 59%believe personalized offers have a noticeable influence on their spend - Infosys Image Courtesy: Wikipedia
- 11. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL 40% buy more from retailers that personalize the shopping experience consistently across all channels - eTailing Group
- 12. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL 78%are more likely to be repeat customers of retailers with targeted, personalized offers - Infosys
- 13. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Retailers See That Personalization Can Pay Big Potential Value of New Marketing Opportunities Better Targeting via More Detailed Customer Preferences Real-time Personalized Offers 58% 50% 39% 47% Highly Valuable Somewhat Valuable Source: Retail Systems Research 97%find value in both improved targeting and personalization
- 14. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL 75%of Netflix views come from personalized recommendations --McKinsey & Co
- 15. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Image Courtesy: Aurelijus Valeiša 35%of purchases on Amazon are the result of personal recommendations --McKinsey & Co
- 16. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Loyalty Program Data Acxiom Data Purchases Website Clickstream Abandoned Shopping Carts Service Requests Returns e-Mail Opens, Clicks The Good News? Marketers Have More CRM Data than Ever Before
- 17. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Loyalty Program Data Acxiom Data Purchases Website Clickstream Abandoned Shopping Carts Service Requests Returns e-Mail Opens, Clicks The Problem? More CRM Data Has Not Led to More Insight 27%strongly agree that their company knows who their best customers are Only 4%strongly agree that they are proficient at target marketing across channels Only ? Source: Retail Systems Research
- 18. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Traditional CRM Segments Added Value in their Day Image Courtesy: XDesktopWallpapers.com Donald F. Draper Creative Director Sterling Cooper Draper Pryce 1271 Sixth Avenue New York, New York 10000 Klondike 5-5356
- 19. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Traditional CRM Segments Added Value Even 5 Years Ago Image Courtesy: Alpha Coders Geographic • Demographic • Lifestyle • Purchase Behavior
- 20. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL However, Traditional Segments Are No Longer Enough 71% of leading retailers indicate that fragmenting customer segments make it harder to reach their customers Source: Retail Systems Research They Tell Us Whom/Where to Target, But Three Key Questions Remain Unanswered…
- 21. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL What Motivates Them? Image Courtesy: Wikipedia 1
- 22. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Image Courtesy: Wikipedia How Do We Engage Them?2
- 23. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Image Courtesy: Charles Starrett What Do They Want? “Any customer can have a car painted any color that he wants so long as it is black” Self-Fulfilling Assortments 3
- 24. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL The Balance of Power has Shifted
- 25. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Retail, Upside Down “Sell What We Have” Has Become…
- 26. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Retail, Upside Down Sell What We Have “SellWhatTheyWant”
- 27. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Image Courtesy: Gabriel Saldana Strategic Actions by Best-in-Class Retailers Product strategies based on deeper customer segmentation Coordinate product placement with customer behavior Establish quantifiable methodologies for measuring customer activity Increase online ad relevance with search criteria 36% 29% 24% 24% Source: Aberdeen Group Top
- 28. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Linking Assortments and Offers to Customer Data is Mandatory Analysts All Agree… Image Courtesy: Rick Harris The best way retailers can deliver a unique, exceptional shopping experience is to personalize brand interactions to individual shoppers and groups that share similar preferences and/or demands. “ ”
- 29. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL CONNECTIONShold the key to customer relevance PEOPLE MACHINES
- 30. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Degrees of Separation 1.9BPEOPLESource: We Are Social 4 Social 140BCONNECTIONSSource: Facebook
- 31. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Private traits and attributes are predictable from digital records of human behaviour Going Beyond Likes
- 32. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Going Beyond Likes The Cambridge Study Revealed that People Who Like Onion Rings have Above Average Intelligence…
- 33. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Going Beyond Likes …and that People Who Like The “Sliding on Floors with Socks” Facebook Page Typically Do Not Use Drugs
- 34. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Image Courtesy: picstopin Many People Like Alcohol (and boy do we talk about it on social media!) But Few People ‘Alcohol’ Discovering Passions Hiding in Plain Sight
- 35. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL The $64K Question How Do We Monetize These Insights?
- 36. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Kraft Dips into Data to Uncover Advocates
- 37. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL
- 38. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL BEFORE the Shortage • CRM-Driven Consumer Analysis • Occasional Usage (1-3x/year) • Slow Growth Product • Being Milked for Profits AFTER the Shortage • Added Social Data to CRM Analysis • Heavy Usage Among Advocates • 10% Buyers = 40% Sales, 50% Profits • Lots of Growth Headroom • New Marketing Approach Source: Advertising Age Sales Share Ad Efficiency
- 39. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Walmart Labs: Social Sells More Stuff Semantic analysis of a huge data store of real-time social media streams to inform marketing and commerce The Social Genome Project
- 40. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL FRIENDS MENTIONS FAN PAGES PROFILES EVENTS CRM Worth Its Salt for Walmart? OMG! I love salt!!!! 02:12 PM • May 05, 2010 @Natasha95 -------------CONTEXT------------
- 41. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Walmart.com searches informed by the Social Genome see 10-15% higher conversion rates Image Courtesy: HDWpapers.com
- 42. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Loyalty Program Data Acxiom Data Purchases Website Clickstream Abandoned Baskets Service Requests Returns e-Mail Opens, Clicks Consensus: Social Insights Lead to More Targeted Segments Loves J.K Rowling Novels Guilty Pleasure: Downton Abbey Practices Yoga Drives a Prius Dodger Fan Climbs Mountains Sagittarius Vegetarian 52%of marketers credit social data with helping them identify new business opportunities 46%indicate social analytics help define customer personas and market in ways that resonate Source: eConsultancy 2013Source: eConsultancy 2013 ?
- 43. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL The Next Frontier in Personalization?
- 44. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL The Rise of the Machines
- 45. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL The Internet of Things “Equipping all objects in the world with minuscule identifying devices or machine- readable identifiers”
- 46. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL 1000devices connected to the internet in 1984 , Image Courtesy: NXE Wallpapers Source: Cisco
- 47. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Image Courtesy: MovieWallpapers.com 12Bdevices connected to the internet today Source: Cisco
- 48. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL 50Bdevices connected to the internet in 2020 Source: Cisco
- 49. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL The Connected Home By 2022 the average household with two teenage kids will own Internet connected devices Source: Reuters 50
- 50. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL 220MSmart connected cars will be sold by 2020 --GSMA The Connected Auto
- 51. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL The Connected Human Fitness Activity Trackers grew in 2013 and analysts expect in 2014 Source: Canalys 300% 9M
- 52. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL zettabytes Source: Tibco 2.8 Imagine the Possibilities
- 53. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL connections in our daily lives With the growing number of we will all become more in tune with our data and expect more relevance from retailers and brands
- 54. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIALCopyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Retailers and Brands Must Be Prepared to Complete The Trust Equation Personal Data + Respect Trust =Tailored Offers, Deals & Interactions
- 55. Thank You