Shopper marketers are increasingly faced with larger and larger quantities of data. Many shopper roles these days are starting to feel more like analyst jobs rather than insights or marketing, and the overall trend is towards more data being available. One big area of data growth is in retail data. Woolworth in Australia, following their acquisition of Quantium in 2013 are now talking to suppliers about buying the shopper data that system provides. Just this week Walmart announced the national rollout of Savings Catcher, which will create swathes of data for shopper marketers to analyze. Retailers are improving their data gathering ability, and more and more are launching loyalty cards, and many are realizing that there is a large profit opportunity in getting suppliers to buy this data. But in many cases the price of the data can be high; and so should manufacturers buy retail data?
Six key questions to ask before acquiring retail data
When retailers offer up their data, they unsurprisingly gild it a little (and who wouldn’t?). But before rushing off to commit what can be a significant share of your research budget to this, there are a number of considerations that will improve the chances of this being a meaningful investment in the growth of your business, and not an expensive waste of money.
Is this retailer important to you?
Whilst this is probably obvious, it is also worth reiterating. Is this customer is important to your brands? Buying retail data represents a significant investment and therefore should only be made in significant customers.
Are the retailer’s shoppers key to your growth?
Building on this, just because a retailer is large, doesn’t necessarily mean that they are key to your growth. Do you have a clear understanding of who your most important shoppers are (those will be the ones which are key to your growth, in most cases) and do they shop, and can they be influenced, in the retailer’s stores? If this retailer doesn’t play host to large quantities of your target shopper, then the value of more data must be questioned.
What would you do differently if you had this data?
By building hypotheses around what we believe about shoppers we can understand whether or not data will support the advancement of these opportunities. Retail data will not answer everything, so being really clear on the questions we plan to ask helps understand whether the data will be valuable or not.
Will this data give me what I really need to know?
Retail data is great, don’t get me wrong, but it doesn’t cover everything. Sales scanning data give a great deal of what got bought, when and where. Loyalty card data adds in ‘who’. But neither give much information on “why” shopper did what they did (nor indeed why not). In my experience, it is the ‘why’ question which most often yields the greatest insight.
Retail data has one even greater limitation: it only tells you about behavior in those stores. So, for example, frequency data only tells us about frequency in that retailer: it tells us nothing about shopping trips which may have taken place in other stores.
Are you using your existing data effectively?
As a gentle watch out, it is important to ensure that your team has the bandwidth and the skill set to handle the extra data. Retailers who provide data naturally expect their suppliers to use it. Most organizations we come across aren’t using their existing data as effectively as they could, so the value that will be gleaned from additional data is questionable. Check first that existing data is being used to its maximum.
What are the implications of not buying this data?
Of course there are other reasons for buying data from retailers. It can build relationships, and can be traded as a variable for other concessions. Not buying data may send a negative message, so always be careful when saying ‘no’ to an important customer.
Don’t get me wrong – I’m a big fan of gathering retail data of all types. But to many businesses it represents a significant investment and therefore should be a considered decision.
For a broader discussion of various data types available to shopper marketers and their relative value, please feel free to download this free ebook on shopper research
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