Retailers and brands have a lot of data offline and now online. Accessing this data by better collection tools for ecommerce, or tapping into existing external or internal data by leveraging 3rd party tools is starting to become more possible and cheaper. VCs are going to be very excited about companies that utilize all the data that’s out there to better optimize shopping.
Retailer: The biggest challenge of a retailer is leveraging its data into actionable items, which historically has been challenging because there is a lack of knowledge around the following:
Who the customer is Buying habits or tastes outside of the retailer. Pre-purchase data (ie ‘in the store’ or things in the shopping cart that do or don’t convert to sales, etc… ). Customized/personalized incentives/deals to up sell, come into the store, etc…
Data is still siloed in these old systems and is very difficult to extract or integrate, but companies are starting to unlock this data . TellApart is for example, is tackling customer segmentation and ‘data-driven’ marketing /re-targeting. They identify the most lucrative customers and help retailers target their marketing dollars towards them versus low-value customers.
Brands: For brands, accessing any kind of data has been a challenge since most of the historical data has not been shared by retailers (or at least very little has) in addition to being able to leverage that information across retailers based on customer demographics. In fact, most retailers that have large amounts of data still use EDI , making it fairly costly to provide sales reports to their brands. Thus, there is a huge lack of visibility into sales let alone real-time data. . Brands have lower traffic if they have a website (many of them are just now getting web presences let alone ecommerce shops–mind boggling for all of us techies but true).Thus, they don’t have very good data from their sites either and are typically less sophisticated than retailers since they have more aspects of their business on which to focus.
Connecting the Dots: Generally, there are HUGE opportunities if a company can plug into the back end of the supply chain and push forward, BUT in terms of timing, there is higher likelihood that something more disruptive will come from the consumer side (as usual) due to the slow moving nature of the enterprise and having to integrate with their systems or the sales cycle associated with business sales. Thus, the innovation will need to deal with the data (consumer, retail, brands, etc..) that is out there—and there is quite a lot!!! . Now that product data and personal data is out there, we need to bridge the gap . Companies like ShoeDazzle employ surveys to get some level of personalization, but this is just scratching the surface. With all the tech talent and data out there, someone is bound to make the recommendation engine more ubiquitous and cross-channel and cross-vertical. You have companies like Polyvore, Svpply, Pinterest , Lyst, and Fancy where consumers are curating their tastes in different ways. So, now there needs to be a way for companies to leverage that information in an actionable manner.