Is Your Data Ready for the Holiday Season?
For consumers, October typically heralds the start of fall and all things holidays. For CG firms, of course, planning for the holiday season started months ago. Right now, CGs are having to place big bets on how COVID restrictions will affect consumers’ shopping habits.
Will everyone hit the stores again, excited to feel some degree of normalcy? Or will a new Coronavirus variant continue to threaten in-person retail, and will most shopping happen online? What will the supply chain look like? Which retail stores even survived the shutdown? Have customers moved to different markets or developed new brand loyalties over the course of the pandemic?
With all of these questions, and with the economy still in flux, strategic campaign planning has never been a more important tool in optimizing holiday sales. CG firms used to be able to use insights from previous years, such as point-of-sale data, footfall traffic, and online shopping trends, to forecast consumer habits for the season ahead. But now it’s not that simple.
For the past year and a half, the reality of daily life has changed every week. Supplying any advanced analytics or predictive models with only this historical data prohibits CG firms from painting an accurate picture of how consumers will behave in the future. Instead, firms will need to refresh their models with new data assets that provide insights into the current dynamic. These new assets will largely come from outside their organization, otherwise known as external data.
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There are several ways that consumer goods companies can leverage external data including for in-store promotions, email marketing campaigns, and even direct mail campaigns. Given the intense competition to get prospects’ attention, CGs develop comprehensive marketing strategies involving a variety of tactics such as online, direct mail, along with email marketing, and in-store promotions to increase the chances of reaching customers. All of these tactics can be further optimized with external data.
CG firms can use external data signals such as demographic information, post-COVID foot traffic indicators, and competitor pricing to strategize optimal locations for in-store promotion campaigns. They can also use spending potential data, customer behavior data, and search engine queries in related fields for more accurate segmentation of customers and prospects in order to build more personalized email campaigns.
Here’s one example of companies turning to external data to gain more context into customer behavior: a DTC brand that relied on direct mail to push promotions and events, but had a response rate dropping as low as 1%. The company built a new direct mailing model that combined internal sales and engagement data with new external signals. These included assets such as census data that showed older demographics (who were more likely to respond), Internet behavior activity that excluded younger users (who were more likely to engage with digital marketing) and information on customers’ hobbies and interests to identify more compatible target audiences. In a matter of weeks, the brand saw a 24% uplift in direct mail response rates and a 14% boost in direct mail ROI.
This example is indicative of any CG firm that maintained and even grew its business during the pandemic. The brands that thrived despite the constant market fluctuations did so because they acted quickly to find datasets that could give them visibility into customer’s changing habits. It will be the same story this holiday season.
The key to optimizing holiday sales will come down to your organization’s ability to create tighter analytics models. To build this ability, CG firms will need to augment their internal data with external data signals that provide deeper insights and a more complete view of the consumer landscape. They can’t wait, either. Soon, the world will change again, making their current data insufficient or obsolete. And the holidays will be here before we know it.
Omer Har is the co-founder and chief technology officer of Explorium.