It's all about context. Understanding when and why consumers are interested in a product or service are key insights that companies are only beginning to leverage as a competitive differentiator. At VentureBeat's Marketing.FWD summit, retailers shared their strategies for injecting relevancy into their products and services by tapping into contextual data insights.
Target goes after spring breakers.
By waiting until late spring/early summer to launch its swimwear collection, Target realized that it was missing out on a large consumer group--college students preparing for spring break. "Our data showed us that our guests were talking about swimming for two months without us," said Kristi Argyilan, SVP of media and guest engagement at Target.
In order to attract college students, Target started selling its swimwear collection online in February, weeks before its traditional launch date but just in time for Spring Break. Even though this required a major shift in supply chain management and marketing, it's important to "time the flow of merchandise based on who is buying when," Argyilan noted.
Booking.com wants to know what you're passionate about.
Booking.com, a subsidiary of The Priceline Group, is selling hotel rooms based on what guests like to do and not just where they want to go. The company recently introduced a new feature called Passion Search which gives destination recommendations based on activities and interests. The site, for instance, lists 1,886 destinations for downhill skiing, 1,191 destinations for wild swimming, and 494 destinations for stargazing.
"We've made passions part of our core search," said Booking.com CMO Pepijn Rijvers, who added that the company has already mapped 230 "passions" based on data that it has gathered over the past 12 months.
Rent the Runway fine-tunes its analyses.
Founded in 2009, Rent the Runway grew rapidly with stores in Chicago, New York City, Las Vegas, and Washington D.C. The startup's service--designer clothing rentals--was a hit with women who don't want to be seen in the same outfit more than once. Behind the scenes, though, the company went through several trials and errors before it found an effective strategy for personalizing its recommendations, explained Vijay Subramanian, chief analytics officer and head of growth at Rent the Runway.
"We're a fashion company and in our case, the customer has a specific event that she needs a dress for," Subramanian said. "But our first iteration [of personalized recommendations] wasn't very successful because each event was different...so we changed the whole infrastructure to start with the event."
By mapping the events that customers tend to rent dresses for, the company was able to estimate the probability of a customer needing a dress for a certain occasion such as a fall wedding if she rented a dress for a summer wedding. "Now we ask the customer what event are you doing to and personalize around that," Subramanian said.
Understanding the customer's emotional state was also important for add-on sales. The company learned that customers were more likely to be interested in additional items like shoes and accessories only after they had found a dress. "Post-dress acquisition, you can see the customer is in a different emotional state and that's when we tell them that these accessories can go with this dress," Subramanian added.
When competitors are only a click or tap away, businesses have a slim opportunity to deliver the right message at the right time to consumers. While it's often difficult to do, understanding the "who" and "why" of a customer interaction is essential for building a long-lasting customer relationship.