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Data-Driven Marketing Efforts Open New Doors
A changing landscape calls for a shift in marketing strategies.
Posted Apr 11, 2014
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The marketer's landscape has changed drastically in the last decade—some experts estimate that social networks now drive more than 70 percent of consumers' buying decisions. In fact, according to Bain & Company, more than 60 percent of Internet-connected individuals in the United States are engaged in social media platforms every day.

With consumers now shopping online, in store, and via social media networks, valuable data is available to retailers, but unless they have the data analytics and technology to harness this data, they will be left behind. For those with the ability to harness big data, the sky is the limit for the types of profitable, innovative, and interactive marketing efforts that retailers can leverage to increase profits, customer loyalty, and brand awareness.

Following are two types of data-driven marketing efforts that retailers are leveraging for a more personal and engaged relationship with their customers.

Location-Based Marketing

The location-based marketing ecosystem is expanding fast. According to Pyramid Research, global market revenue for mobile location-based services and location-enabled mobile apps should reach more than $10.3 billion by 2015. More potential consumers "checking in" means more opportunity for consumers to "check out" when targeted offers are presented at the right place and at the right time.

Examples of location-based marketing include efforts by American Express and Starbucks, which began incorporating Facebook check-ins within their loyalty programs. In the United Kingdom, Nestle "hid" GPS trackers in some of its chocolate bar wrappers. A team tracked the users after they unwrapped the candy and contacted them within 24 hours to deliver a cash prize.

For location-based marketing to be truly successful, it needs to be fueled by data analytics and analysis to accurately pinpoint the right messaging and offers to relevant audiences.

Many technology companies boast that they have capabilities in location-based marketing, but retailers need to ensure that they choose a solution that gives them the data analytics and analysis to target the right customer, at the right time, with the right offer, to ensure optimal success and profitability.

Gamification: Gaming for Profits and Loyalty

In the retail industry, it's the "perfect storm" for gamification, which is the blending of social media, mobile, big data, and wearable technology/computing. With the blending of all these technologies, retailers have the opportunity to leverage what is at the core of gamification—desire, incentive, challenge, reward, and feedback—to drive engagement with consumers, increase customer loyalty, and drive higher profits.

This type of marketing is gaining substantial industry growth—according to Markets and Markets, the gamification industry is expected to grow at an astonishingly high annual rate of 67.1 percent, reaching $5.5 billion by 2018. Gartner predicts that about 70 percent of the top 2,000 global companies will have at least one gamified application by 2015.

Examples of retailers leveraging gamification strategies are Best Buy and Home Shopping Network (HSN). Electronics retailer Best Buy partnered with mobile app provider Shopkick to increase its traffic. Shoppers can collect Kick Points (the application's currency) by accessing Shopkick via iPhone or Android, and scanning items at Best Buy locations. The Kick Points are redeemable for discounts and free goods in stores. According to Doug Galen, chief revenue officer of Shopkick, Best Buy's partnership with Shopkick was targeted to its nonloyal customers, as their loyal customers would use the company's branded mobile application. By engaging with these customers through Shopkick, Best Buy was able to guide them to browse, compare, and buy with ease.

Online and television retailer HSN employed gamification by releasing an online arcade tool. The company added video games to its Web site and increased the level of engagement with target consumers. With this tool, while about two-thirds of a computer screen is covered with games, such as sudoku and crosswords, a live stream of the company's television channel captures the remaining space. Players earn tickets, which are redeemable for digital badges for each game. The company also captures players' feedback for game improvement and future game designs. Players can share their scores on Facebook, thereby tapping engagement through social media as well.

Whichever strategy a retailer decides to use, for any marketing activity to be truly successful, it needs to be fueled by data analytics and analysis to accurately pinpoint the right messaging and offers to relevant audiences.


Anurag Kapoor is the vice president of business development in the analytics division at The Smart Cube, a research and analytics organization.


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