I’ve been collecting my thoughts about my cross channel (PC to tablet to cell to in-store geofenced) Walmart and Target experiences and couldn’t get an old NPR report: From Harvard Economist To Casino CEO from November 2011 out of my head. The report featured Gary Loveman, CEO of Caesar’s Entertainment. Loveman was previously at the Boston Federal Reserve and a Harvard economist.
Truthfully, you should listen to the entire broadcast as it covers the importance of running tests, using data about your customers in smart ways, and improving the customer experience, but if you want to get to the crux of the issue related to this post, start listening at about 10mins into the broadcast (or if you’re pressed for time, start at 14mins).
If you’ve been to a casino in the last decade, you know that loyalty cards are an important part of the experience. Programs like Caesar’s Total Rewards track your usage across almost any Vegas activity: slots, table games, shopping, dining, etc. and give you rewards for your loyalty. Not unlike loyalty programs in the retail industry…until you hear who Caesar’s is looking at, the associated data, and the actions Caesar’s takes based on the data.
Caesar’s observes in real time the card usage of its Total Rewards members. It knows who the new members are and can track activity accordingly. If a new member is playing slots, for example, Caesar’s gets notified and the staff begins to monitor game play. The staff focuses on those people whose results are way out in the negative tail (playing a machine where they are getting back less than they should). Caesar’s knows this is a negative experience and sends someone out to talk to the customer, apologizes for the bad experience, and provides an offer (hotel room, dinner, limo, etc.). Caesar’s does these types of interventions and runs test and control against them to find out if customers who have a visit from a staff member are more likely to come back a second or third time. Not surprisingly, the data shows these interventions work.
Now ask yourself if retailers are thinking this way. Are they using their data in real time to provide a better experience or are they just running database marketing campaigns based on past purchase behavior? Have there been any major improvements in how online retailers address bounce rate or a piddling industry average conversion rate? Are they even collecting data in a useful way and analyzing it?
Yesterday, as I was walked through Walmart (Showers Drive store in Mountain View), utilizing the in-store mode of the Walmart iPhone App, I kept wishing Walmart was analyzing my behavior similar to how Caesar’s does. I couldn’t find a couple products on my shopping list and therefore walked up and down a number of aisles in the store over and over. I frustratingly and painstakingly re-visited the same aisle or even the same section in an aisle searching for my product. I tried in vain to find someone to help me, but at that moment, no one was around or available.
Walmart should look at this behavior and alert an employee to greet me and ask if I need help. And assuming I’m logged in to the App, the company knows my name, past purchase behavior, my shopping list (assuming I’ve created one or added products to cart), how many times I’ve been in the store before, what products I’ve purchased before online and in-store. Oh, the possibilities to delight me with all that information, whether through an intervention or an opportunistic engagement.
I’m not picking on Walmart. In fact, the basic idea behind their in-store App mode – to kill showrooming – is great.
But that’s just the beginning.
I rarely hear more than just a couple retailers talk about testing and data the way Loveman talked about it back in 2011 or how mobile gaming companies doing hundreds of millions in revenue discuss the importance of testing or customer feedback, but when I think about retail’s edge, it’s this focus on data which I think will drive considerable growth opportunities.
