3 Big Data Methodologies Every Superstore Must Deploy – Customer Profiling

Posted on February 25, 2014 by A. Jain

Superstores are a complex set of stores to operate; they are a combination of a supermarket and a department store. Not only are hypermarkets massive with thousands of square feet in area, but they also have thousands of different products and are visited by hundreds of thousands of customers. With electronic POS software in nearly all superstores, they are now able to collect huge amounts of customer and transaction data, that’s truly big data! While maintaining the optimum supply chain logistics to optimize their operation, they also need to focus on the analysis of this data, which can help in increasing customer loyalty, optimizing their inventory and propping up their margin.

There are a lot of methodologies which can be deployed in the case of hypermarkets. Here I will be identifying the top 3 that are an absolute must for maximum benefits.

Customer Profiling

The customer is always King. The trick is treating all of them as kings, when you have hundreds of thousands or even millions of customers. Every customer is unique and has their own preference, schedule and history. The key to success is to identify each customer’s preference, figure out who your best customers are and which customers are the most likely to grow to become your most profitable customers. Other questions that should be asked are; what products attract your customers, which customers come frequently but spend less, and what are the key drivers that pull a customer into the store. This magnitude of data is hard to organize and analyze with only hundreds of customers, but in the case of bigger mid-sized retail chains, the customer counts run into hundreds of thousand to millions. Analyzing them as individuals per the business goals becomes a major challenge for all retailers.

Why this is needed: “Collecting data through loyalty programs will not increase your sales. Using that data to understand your customers and building engagement strategies around it will”. Once the retailer profiles his/her customer groups to a level where they can distinguish between ‘high loyal’, ‘deal seekers’, ‘value buyers’ and further narrow down the behavior to ‘female customers between 20 to 30 years of age’ or ‘people living in suburbs shopping primarily on weekends only’, they will be able to customize their merchandise and promotions to cater to each customer group’s specific needs.

How this can be done: Segmentation is the key to figure out who your customers are. The basic methodology uses a 3-axis segmentation, grouping customers by most recent visit, frequency of visits and spending habits. The more advanced methodologies use as many as 8-10 different parameters to cluster the customers, and create distinct groups that outline key behaviors for a customer. The more information the retailer has, the better the segmentation will be. Merging attitude and behavior with demographics can create micro-segments, which can also pinpoint and predict a customer’s behavior.

Benefits to the retailer: Creating the segments or the micro-segments is not enough. Only after each micro-segment is analyzed in detail and their KPIs studied, along with product purchasing behavior, spending pattern, etc the retailer will be able to a make an informed decision. Promotions can then be specifically created to reward specific customers. This will simultaneously reduce the cost of promotions significantly while increasing the customer’s response to promotions. Customer segmenting can also be used to push specific products to a specific group of customers, based on their micro-segment, purchase behavior and product affinity. The net result of all this is an increase in customer loyalty, a reduction in promotion cost, an increase in customer’s response to promotions and an increase in customer satisfaction with the retailer. Win. Win. Win.

How do you use customer profiling to improve margins and increase purchase behavior?

Capillary Technologies Welcomes American Express Ventures

Posted on February 11, 2014 by Aneesh Reddy

At Capillary, we strongly believe that we’re known by the company we keep. So we consider ourselves highly fortunate that our ecosystem includes over 150 world-leading brands such as Adidas, Benetton, Nicole Miller, Puma and Tennis Express; major partners like Blue Label and Abrar Telecom, who are helping us drive business in our newest market—South Africa; and marquee investors including Sequoia, Norwest, and Qualcomm, who are backing our vision of becoming the #1 provider of Intelligent CRM solutions to brands across the globe. All these stakeholders know what it’s like to compete at the top of their respective industries and this pushes us that much harder to deliver solutions that bring real value to the multi-channel retailing space.

With this in mind I am thrilled to welcome the latest partner in our journey: American Express Ventures. American Express Ventures joins our existing investor syndicate and I am confident that we will be pushed to scale even greater heights as a result of this partnership.

As part of this news, I also want to acknowledge Harshul Sanghi and Rohit Bodas of AmEx Ventures. Over the past few months, Harshul and Rohit took quite a bit of time to understand our business and vision and took equal time to make sure that we understood AmEx Ventures’ values and their unique investment model. After drilling down, it became clear to all of us that Capillary Technologies fits American Express Ventures’ investment philosophy and that AmEx Ventures was a great strategic fit for Capillary—both in the U.S. and around the world.

We look forward to great things from the partnership with American Express Ventures and know that they expect great things from us in 2014 and beyond!

We’ve got more in store for you, so watch this space!

Aneesh Reddy, CEO

Clienteling: Power to the Sales Associate

Posted on February 4, 2014 by A. Jain

We’ve entered the age of the consumer, where the customer is at the center of the retail universe, and data has made this possible. Customers are empowered with more information than ever before; with online stores, social media, and smart phones. Their expectations from in-store shopping experiences have changed, and so should the role of the sales associate. Clienteling is a customer centric CRM retail system, which empowers the sales associate with customer data in the palm of their hands to facilitate a highly personalized and delightful shopping experience that drives repeat visits.

Getting Customers To Visit The Store – Engage with existing customers by sending personalized communication to various channels, based on the context and past shopping behavior.
In-store – Recognize the customer in-store and personalize the interaction to better assist the customer. Effectively use customer preferences, notes from previous interactions and recommendations based on the customer’s past shopping behavior to increase your customer engagement.
Transform Customer Service to Customer Delight– Clienteling, when done effectively, also means handling customer returns and customer feedback effectively with the goal of achieving customer delight.

While clienteling systems have seen an impressive growth in adoption over recent years, this space has been rapidly evolving with the recent technology trends. Mobile devices and interactive displays are redefining the in-store experience for both sales associates and customers. Tablets have dramatically impacted how sales associates can participate in the customer shopping process. Tablets allow store associates to have a 360-degree view of every customer; information on the move as they engage in assisted selling and double as a product expert with relevant information at their fingertips. Experiences such as this, can bridge the gap between online and offline retailing and bring personalization in-store with all other advantages of in-store shopping.

Tablets also make it easier to enrich customer data by capturing customer preferences and interests based on one-to-one interactions. As this data becomes more accurate, retailers are able to serve customers better in the forthcoming shopping experiences, as well as use it for targeted communication to announce new arrivals, sales and other events the consumer may show interest in.

Beacons, among the other recent technological innovations have made intelligent customer identification in-store possible. This technology will also open doors to mobile phones becoming a customer’s trusted digital assistant to enhance their shopping experience inside the store.

Regardless of the promise many of the new technologies show, the final touch point inside the store will always be the sales associate and hence a critical link in building and maintaining the relationship between the brand and the customer.