What House of Cards can teach us about Retail?

Ed Armishaw

If you’re anything like me, you’re hotly anticipating the launch of the new season of HoC on Friday …and for good reason – it’s one of the most watchable (and watched) show’s that on TV/the Internet right now!

Now you’re probably wondering why I think HoC is in anyway relevant to your retail business? I’m definitely not suggesting any retailers employ Frank Underwood's style, mind tricks or manipulation when dealing with their customers, however, I think we can all learn a thing or two from Netflix when it comes to delivering a big new concept for our business.

Netflix have flown in the face of convention time and time again with House of Cards and it’s here that I think we should take note. Whether it was releasing a whole series at once for binge watchers, or commissioning the whole of series 1 without running a pilot episode they have put data at the heart of their decision making to break from the norm. In short, by analysing data collected from 44m subscribers they were able to outline a blueprint for a new venture, which was a guaranteed success. In taking a data driven approach to production and commissioning for HoC, Netflix were hedging their bets on a runaway success, and it has been – HoC alone added approximately 2 million new US subscribers in the months following it’s launch. But it wouldn’t have been able to do so without the emergence of new media services – in this case subscription streaming, which offer far greater opportunities for analysis, and therefore decision making than traditional channel television.

Embrace data to make bets across Retail

It’s here that I think retailers can steal a march on the competition – by putting new and emerging data sets at the heart of their decision making to help drive better customer experiences, make bets on new exciting in store ventures and build unique commercial models.

So here are 3 ways I think retailers can use new data sets to drive more value and efficiency from their existing stores and disrupt the status quo:

1. Test store layout changes in micro environments using customer movement data on a regular basis

Store formats and visual merchandising teams are always looking for that perfect blend of product placement coupled with operational efficiency. Whether it is placing that fancy new digital display screen to gain most impact and drive most sales or putting in an extra till point to a new format store, it all gets a little easier if they’ve got a baseline of data to work from – just like our friends at Netflix.

2. Measure sales conversion in new ways 

Retailers have long held “conversion” as THE metric (alongside sales, obviously), which dictates staffing rotas and even manager bonuses in physical stores. This age-old simple equation that pits the number of people counted through a door against sales just won’t cut it anymore. Happily now there are so many more factors, which can now be taken into account just by using data now available through Wi-Fi and iBeacon technology. 

For example, in a fashion store – why not count conversion from the number of people who dwell in the fitting room longer than 5 minutes? Or a grocer could measure those customers who come in at peak times, dwell for under 5 minutes and then pay using the self-service check outs?

By measuring conversion from different sections within store, or by customer browsing habits retailers can now make informed staffing decisions. Whether it's having more people at the fitting rooms, ready to offer advice and help to customers in our fashion retailer or staffing the check outs at peak times (now defined by customer type) to ensure a smooth customer experience in their grocery chain.

3. Deliver timely marketing campaigns to customers in store and measure their impact

With new technology comes a whole host of new opportunities for retail marketing teams, whether they’re of the digital persuasion or not. For a few years now, we’ve all been waiting with baited breath for the first retailer to really adopt iBeacon technology and put it at the heart of an in store offering, and if we’re honest, we’re still waiting. 

Setting aside some of the technical challenges of beacons, which you can read more on here, I think the big issue here is context. Namely, that it’s proving tricky for retailers to deploy a beacon campaign which either catches all or alternatively personalises to an individual’s buying needs. But happily with data comes context, and context as Netflix have shown us is key when making bets on big new ventures; including iBeacon in store campaigns.

Consider this scenario:

Two retailers have received large volumes of click & collect, online orders for little black dresses during party season. Both retailers have excess stock items in other categories to sell, and see the opportunity to upsell their customers with accessories for their newly purchased outfits. Both decide they’d like to run iBeacon campaigns to promote handbags, scarves and shoes to people around the click and collect pick-up area.

Retailer A is flying blind with no data to understand how people browse in their store. Their marketing team is forced to alternate between each of the 3 items on a rolling “timer” for their iBeacon campaign. They end up seeing low redemption of their beacon campaigns, and ultimately don’t take advantage of a great sales opportunity..

Retailer B has deployed in store analytics over the last quarter therefore has 12 weeks worth of customer browsing data to call upon when building their iBeacon campaigns. They choose to use this data to run each of the campaigns (for handbags, shoes and scarves) at the times when customer browsing and dwell time is high in each of the product sections.  As a result, they see an uplift in sales on all items promoted, with customers taking advantage of this semi-personal offering to accessorise their outfit ahead of that office party.

Data’s here to stay

To wrap up, it’s clear that whether it’s Netflix using subscriber data to commission and market smash new shows in industry changing ways, or retailers starting to leverage in store shopping behaviour data to sell more, staff better and build great customer experiences – putting data at the heart of your business is the way forward in 2016 and beyond.

With all that said, I’m off to plan a weekend of binge watching the new season – hope you enjoy whatever Frank Underwood has been up to next as much as I will!

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Walkbase provides a retail analytics solution for improving the impact of marketing on physical stores and personalising in-store shopping experience.