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In God We Trust: All Others Bring Data

September 6, 2017

Listen to episode 10 here!

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These are the glorious, immortal words of W. Edwards Deming. According to Wikipedia, Deming served as an ‘American engineer, statistician, professor and author who helped develop the sampling techniques still used by the U.S. Department of the Census and Bureau of Labor Statistics.’

I can only wonder what W. Edwards Deming would think of the data-driven world we live in today. …

On my weekly podcast, Channel Mastery, I interview experts on what’s working best for today’s most successful multi-channel businesses. While my interviewees are diverse (from authors, to venture capitalists, to Amazon and marketplace specialists, to software entrepreneurs, to (of course) brands and retailers) they all share one strong commonality: The importance of capturing and deploying data.

The data conversation is nothing new. We’ve been reading and watching the onslaught and subsequent ‘folding in’ (or ‘unleashing of’ if you’re Amazon.com) for some time now. As I was doing my daily research around multi-channel mastery earlier this week, I came across one quote caught that captivated me from Larry Dignan, a columnist with ZDNet.com, in his article, Omnichannel Debunked in Five Minutes.” (May 14, 2017) (1).

“It’s the data stupid. … The idea that consumers will engage with companies via multiple channels is interesting. But without data serving as the glue the omnichannel dream goes down in flames,” he writes. “A customer-first mentality will translate everywhere. Amazon Prime is about omnichannel–it’s about the touch points and a broader plan.”

Dignan’s point of data serving as the glue for our omnichannel dream is as close to a North Star as I’ve seen. It’s also a much-needed one during a time when business leaders are on the hunt for a map of sorts to guide the ongoing evolution of their multichannel businesses.

Capturing and using data from your best consumers and how they interact with your brand is how you unlock an understanding of their preferences. From there, the shaping of on-brand, creative experiences can happen.

Data-driven approaches were strongly proven in the positive second-quarter earnings reports from Best Buy and Home Depot.

  • (NOTE: I recognize that these two retail behemoths are in categories that are more positive than apparel, footwear or sporting goods in terms of consumer confidence and spending trends today, but there’s still a lot to be learned from what these two companies are deploying in the fight against Amazon.)

Best Buy and Home Depot are both exceeding analyst expectations and projecting favorable runs respectively through the end of 2017.

Best Buy (NYSE: BBY)’s August 29, 2017 earnings report included online sales growth of 31.2 percent and second quarter earnings of $8.94 billion, up from $8.53 billion a year prior. The details of the report can be found here.

Looks like CEO Hubert Joly’s “Best Buy 2020: Building the New Blue,” is not only working, it’s taking names.

Key progress points on Joly’s plan included the following, taken from the Best Buy analyst conference call (2).

“The first priority is to explore and pursue growth opportunities around maximizing the multichannel resell business and providing services and solutions that solve real customer needs and help — and help us build deeper customer relationships,” Joly said.

Solving the customers’ needs and building deeper customer relationships happens at every single touchpoint today. And, Joly continues, his team is continually monitoring for changes and shifts in the Best Buy target consumer preferences. How?

“Through digital innovation that improves the customer experience,” he said.

A great example can be seen in Best Buy’s new ‘In-Home Advisor’ program, which is proving to be a successful modern day twist on clienteling.

“Our In-Home Advisors …. can help you design, including place for great entertainment system or to pick out your appliances for a kitchen remodel or help you stream music and content across your home without annoying buffering issues. After testing the program in several cities over the last 1.5 years, we are currently rolling it out nationally. By the end of September, we will be offering these free in-home consultations across all major U.S. cities nationwide,” Joly elaborated in the Best Buy earnings call.

Meanwhile, over at Home Depot (NYSE: HD), second-quarter revenue was reported to be $28.11 billion versus an estimate of $27.84 billion. This was a 6.2 percent increase from the second quarter of fiscal 2016 (3).

CEO Craig Menear pointed to ‘interconnected retail’ as a key growth engine powering these results. Home Depot’s dot com business represents 6.4 % of sales and grew 23% approximately in the quarter.

“Our digital team continues to invest in content … (and in) better mobile experiences to take the friction out of the interconnected experience online, while our operations team remains focused on improving the interconnected experience in store,” he said.

The ‘interconnected experience in store’ jumped out at me. Home Depot is not just investing in its ecomm, it’s dployin an improved experience across all points of entry to remove friction for a better consumer experience. It’s also investing in improving in mobile – because that’s where the brands’ target consumer expects and wants to experience Best Buy during the consumer decision journey.

Consumer preferences are nearly impossible to pin down, but knowing preferred points of entry and working to offer a seamless (frictionless) experience is not only valued today, it’s expected by consumers.

“In many, many categories, the shopping experience … is truly a blended experience today where the customer, the front door of our store is no longer at the front door of our physical store for many, many product categories. The customer starts digitally, looking at products, doing research. And then, in many cases, particularly in large ticket, they come in and they actually want to talk to one of our associates before they make a purchase. But we clearly, in big-ticket categories, we sell both in the physical and the digital world,” Menear said.

Larry Dignan, in his article cited at the start of this post (1), points out that enterprises need to know what and how people buy through data and consistently engaging with them.

“Amazon didn’t win the retail war as much as it did the data war. Amazon knows its customers better.” Larry Dignan

Every enterprise struggles with data. It’s a challenge to understand what to watch and what should trigger changes in strategy and tactics. It’s also super challenging to procure and ‘unleash’ it.

I always try to bring solutions through the Channel Mastery podcast, and this week, I interviewed John McCoy, Digital Industry Adviser, SAP Hybris. Prior to his role with SAP/Hybris, McCoy served as E-commerce Director for The Sports Authority (TSA).

This week’s episode is the second of a two-part series featuring John. In both interviews, he shares examples of excellence from brands and retailers being consumer centric, as well as some guffaws. There’s much to learn from Mr. McCoy. While I have many favorite aspects of John’s two episodes, my most favorite McCoy-ism was when he said ‘technology is basically sh*t.” What? Well, what he meant was that data’s not the end all and be all, it’s a means to an end. A means to use data to inform how you and your team can be absolutely remarkable to your “Kings and Queens” – a.k.a. your target end consumers.

Here are the links to these two great episodes:

If you got a lot of value out of this LinkedIn post, please give my podcast, Channel Mastery a listen and a share. It’s sponsored by Verde Strategy.co, your multichannel business accelerator and the strategic consulting arm of my company, Verde Brand Communications. Also, know that every week, a free downloadable Playbook is created to make what you learn in Channel Mastery implementable. John’s Playbook was a fun one to research, it outlines today’s best practices for successful data-enhanced ‘Clienteling.’ Grab it here.

Kristin Carpenter-Ogden is the founder of Verde Strategy, which provides guidance to businesses and brands to build and scale multi-channel businesses that are profitable, sustainable and consumer-centric. Verde Strategy offers project-based consulting, as well as free weekly resources and training, in the Channel Mastery podcast and blog. Verde Strategy is the strategic consulting arm of Verde Brand Communications, founded in 2002 by Carpenter-Ogden. If you’re interested in learning more about Verde Strategy services, or Verde Brand Communications, email Kristin: kco@verdepr.com.

Citations:

1 – Larry Dignan, “Omnichannel Debunked in Five Minutes,” May 14, 2017: http://zd.net/2vMowIZ

2 – Larry Dignan, Best Buy Reports Strong Q2, Ups Outlook, Hits E-commerce, Omnichannel Stride,” August 29, 2017: http://zd.net/2wLNkFq

3 – Marketwatch, Home Depot Announces 2nd Quarter Results, Updates Fiscal Year 2017: http://on.mktw.net/2esh7fm

4 – Best Buy Reports Better-than-Expected Second Quarter Results, August 29, 2017: http://bit.ly/2wqbNxC

5 – Best Buy Investor Relations News and Events, Q2 earnings conference call: http://bit.ly/2eHkNGI

6 – Home Depot Q2 Earnings Press Release: https://thd.co/2vI7Y5v

7 – Lauren Thomas, CNBC, “Home Depot tops Street Views, Raises Forecast f or Second Time this Year,” (August 15, 2017): http://cnb.cx/2eHmBQe