Could big data help retailers compete with Amazon?

Credit: Thierry Gregorius via Flickr

On its 15th birthday, Amazon has announced its best-selling product list. For a company that started out as an online bookstore, it’s no surprise to see The Girl With The Dragon Tattoo and Fifty Shades of Grey on that list. Call of Duty reflects the company’s evolution into the online entertainment retailer, while HDMI leads and Memory cards reflect a company that has become the ultimate retail platform in a connected age where many customers are mobile-first and showrooming.

They’re the gold standard of online retail. Their mission “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices” is something I’m sure many board rooms have aspired to in the past, but Amazon have certainly delivered.

The impact this has had on the high street has been well-documented. Our Price, Comet, Virgin Megastore, Zavvi, Jessops, Woolworths went belly-up citing online competition as a major factor. But it’s not just about their first-class retail platform and super-low prices. They are up there with Apple, Facebook and Google when it comes to big data, customer insights and experience. Understanding the customer, and effective CRM to meet their needs, are critical for any retailer to prosper – and with its data set Amazon has become king of the hill.

As a relatively young company Amazon did not have to battle with a traditional way of doing business or adapt to the new world. As online-natives they have always had the edge when it comes to data, and have created a daunting prospect for any CMO asked to create a customer experience “like Amazon’s” without the vast amounts of customer data required to deliver. Where chickens are free range, organic, fair trade or basted and toilet paper comes with multiple pleats, aloe vera or a donation to charity – consumers define themselves through their purchases and it’s the brands that understand what is truly important will succeed – data helps CMOs to understand what motivates.

So we think predictive analytics will become increasingly important for CMOs – enabling them to plug gaps in their own data, and deliver these opportunities  by working with companies that spend their time in understanding consumers. We have found that using predictive analytics can not only increase conversions three-fold, by identifying ‘look a like’ customers from an ‘unknown’ population – but can be used to use to personalize and optimise their site experience for loyalty.

Since it is now virtually impossible for any brand to compete on the functional – product features, delivery speed and costs – it is more important than ever for CMOs to use the power of their brand. By understanding the motivations, aspirations, attitudes and values of their customers there is a real opportunity to create relevant experiences that drive loyalty.

Consumers will not be best-served by a Model T Ford retail landscape where “you can buy from any retailer you like, as long as it’s Amazon”: so big data, and the insights that come with it, will be increasingly important.