SAS Institute, one of the pioneers in analytical software development, has long supported the marketing maxim that the more you know about a customer’s behavior, the more successful you will be in satisfying his or her evolving requirements.
Jim McCann, founder of 1-800-Flowers, has proven that utilizing IT tools for social-mobile marketing is an essential component in generating the $700 million sales of flowers and gift baskets coming from online purchases. Utilizing analytics software has improved the conversion rate of browsers to buyers on its website by 20 percent in recent months.
Christopher G. McCann, CEO of 1-800-Flowers, says that using analytics software to optimize manufacturing, distribution, and shipping operations helped cut costs by $50 million last year.
Elie Tahari, a $500 million clothing designer for men and women, is an experienced user of analytics technology. Their database of customer information has grown fivefold over the past three years and is constantly being mined for sales trends.
Nihad Aytaman, Tahari’s senior technology manager, explains that their IT systems provide market intelligence that is used for developing more targeted marketing strategies.
Wal-Mart has long been known for their sophisticated technology that allows them to analyze demographic information and in-store sales to tightly manage inventory and to efficiently allocate products to different stores.
Cheaper, faster computers and increasingly sophisticated analytic software are creating vast amounts of digital data that CEOs and their CIOs can tap into for marketing intelligence. The combination of better tracking of online visitors to company web sites, the growth of social networks, and the exploding number of users of smart phones provides CEOs with better real-time consumer trend information than ever before available.
The need for information is tremendous in the teenage apparel market where designs change rapidly.. Edmond S. Thomas, CEO of Wet Seal, a 500 store retailer of fast-fashion clothing targeted mainly to teenage girls, says that “staying in with the shifting tastes among young women is crucial.” Eighty percent of Wet Seal’s sales currently come from their stores, but web sales are growing.
Wet Seal has introduced a new web feature called “Outfitter,” which allows users to put together their own outfits online. As a result of this new online option, over 300,000 user-generated outfits have been developed, generating millions of page views.
This led to the creation of their own iPhone application called “iRunway,” allowing for customers in any store to tap into an item’s “ticket number” to see how other customers have created outfits using that item. “We can get a read on where our customer is headed faster than ever before using this neat new technology,” says Ed Thomas. These user designs have helped the company see early signs of a recent trend toward more informal outfits like dressy tops with casual jean bottoms.
As these examples clearly indicate, every CEO needs seriously to explore how analytic software can be utilized in their business to test how smart software and computer power can be applied to trends in their marketplace so that they can act upon this information faster and more effectively.
Just think – smart phones may be allowing your competitors to reengineer your products as you read this column!
The question is: how fast can you currently convert the data that you have into usable market intelligence?
||Bob Donnelly, is CEO of VAAS Americas, the U.S. unit of the Chennai, India based maker and distributor of industrial valves. A coach, educator, and advisor to founders/CEOs of growing firms, he is a serial entrepreneur, having started, grown and sold several technology based businesses. Earlier in his career he held senior management positions with IBM, Pfizer, and Exxon.
He has developed an online MBA program in Entrepreneurship for Rushmore University with managers from global firms enrolled in the program. Since 1998 he has served as a venture mentor at New York University’s Stern School of Business Berkeley Center for Entrepreneurial Studies, where he advises start-ups on business plan development, marketing strategy, and presentation skills.
He writes the online Entrepreneurial CEO column for Chief Executive.