Sometimes it seems that retailers, and the merchandisers who work for them, have little chance in the battle to keep up with consumers’ changing habits, tastes and priorities.
But Sarah Rasmusen of Kohl’s took to the stage at the Shop.org Digital Summit 2015 on Tuesday to say there is hope. Like so many things these days, the hope lies in data and the ability to employ it as a seer and an ally in the daily work of connecting what customers want with what a retailer has.
Sure, merchandisers have always worked with data, whether it was written long-hand, typed out, entered into spreadsheets or digested by powerful analytic tools. But life is accelerating. And so is the ability to analyze large amounts of data in a way that provides immediate insights for those working on retail’s front lines.
Like everything in retail, the significance of being able to act fast is magnified in the holiday shopping season.
“A little story from last year,” Rasmusen said during a presentation with BloomReach CEO Raj De Datta. “In holiday ‘14, my team was able to take the signals that the customer gave us on Black Friday in record time — to be able to analyze, report and share what the customer was doing and affect the rest of the holiday season, through ship deadline.”
I should note that Kohl’s is a BloomReach customer and relied on BloomReach tools, among others, during the 2014 holiday season. But the notion that merchandisers need to be able to access data that is understandable and actionable is all but universal in retail.
From history to cognitive computing
IBM, for instance, has been for some time developing analytics tools that are more immediately and more practically useful. Patricia Vekich Waldron, an IBM retail and consumer product marketing director, told me shortly after Rasmusen’s presentation that just as consumers have evolved, so too have the tools that help retailers keep up with them.
“The industry is also changing. It used to be that reports only came from corporate and that they came every week or every month,” she said. “Today everything is in real time.”
Technology has moved the science of understanding customers from one that looked at what customers had done in the past, to predicting what they would do in the future, to applying cognitive computing, ala Watson, to the shopping experience, Waldron said. Cognitive computing uses natural language processing and constantly learns, so that factors such as the weather, for instance, can be figured into a consumer’s likely intent.
The leaps forward have transformed the job of online merchandisers, Rasmusen told the Shop.org crowd. The tools her team used during last year’s holiday season, for instance, provided quick insights, which meant her team of merchandisers could spend their time and energy thinking creatively about how to satisfy customers.
“It’s hard to inspire people to be, I’ll say intellectually curious, when they have to spend a lot of time slogging through reports to get to the data,” she said.
Data can transform teams
And intellectually curious is good. In fact, Rasmusen has seen a transformation in her team.
“They have become a customer-centric organization,” she said. “They’re not report-runners anymore. They have become customer-oriented, strategic thinkers. And it’s my job, as their leader, to maximize their impact across the organization by giving them the tools they need to do so.”
In some ways, for retailers, it is not simply a matter of wanting to change; it’s a matter of needing to change in order to compete against other retailers and Amazon. More than 40 percent of consumers go straight to Amazon.com when they begin searching for a product. That’s more than use search engines or start on a retailer’s site. So, retailers need to differentiate themselves by creating a memorable experience for their customers.
“Retail is a now business,” Lauren Freedman, president of the e-tailing group, said Tuesday. “Anything you can do that’s quicker or faster, that’s always beneficial.”
During her presentation, Rasmusen provided a number of examples that proved Freedman’s point.
First, she flashed a slide with a picture of a garment commonly know as a “skort” on the screen. She explained that Kohl’s had labeled the item a “scooter,” a more precise, but less common description.
At least “scooter” was how Kohl’s described it until they looked at the data. In fact, those searching for a “girls scooter” expected to be presented with a toy you ride around the block. Those searching for “skorts” expected to see what Kohl’s initially called a “scooter.” The Kohl’s team made the change.
Changing at the speed of the Internet
“In a traditional bricks-and-mortar environment, there is no way that change could happen overnight,” Rasmusen said. “We were able to do this very quickly on the digital side. We were able to read it very quickly and react very quickly. But in traditional brick-and-mortar merchandising, where there is fixed real estate, there are fixed pages in a catalog, you can’t ever make a change like that so quickly.”
During the holiday season in 2014, no one at Kohl’s was surprised to see high search volume for “Christmas dress.” They were surprised that a relatively small number of those who searched ended up buying a dress. They dug into their customer behavior data and found that what customers searching for “Christmas dress” really wanted, was a girl’s Christmas dress. It was an insight that Kohl’s could and did act on quickly, boosting the sought after girls dresses and bringing immediate improvement.
And then, Rasmusen said, there was the “dancing diamond,” a term online shoppers were using to describe a particular pendant on which the diamond center appears to dance. The Kohl’s team was not familiar with the term, but picked up on it from the data and made that type of jewelry easier to find. But that’s not all.
In what Rasmusen said she hoped was a sign of things to come, the online insight also benefited brick-and-mortar sales. Sales associates had a parallel experience: customers asking for the dancing diamond and the associates not knowing what that was — until the online insight was shared with them. At that point, the diamond pendants were recognized as a hot trend.
“The jewelry brick-and-mortar team took notice,” Rasmusen said. “They put dancing diamonds on the cover of the Mother’s Day catalog. What you have, is something that started on Valentine’s Day in digital, that traveled a couple of months to the front cover of something that was very much a brick-and-mortar effort.”
To some, nearly three months to get from search query to catalog cover might seem like a long time, but Rasmusen explained that in a traditional, slow-moving brick-and-mortar operation, the move was made at “lightning speed.”
And if Rasmusen and the data get their way, it’s the kind of big move that will be happening all the more often as merchandising marches on.
Photo of Raj De Datta and Sarah Rasmusen by Mike Cassidy. Whimsical data photo by VirtualWolf published under Creative Commons license.
Mike Cassidy is BloomReach’s storyteller. Contact him at firstname.lastname@example.org; follow him on Twitter at @mikecassidy.