Business

How brick & mortars are stepping up their data game

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Zachary Hyman is co-founder of SpotOn.

The relationship between online software and offline business is a sordid affair, full of challenge and consternation.

The last few years, however, have seen Internet entrepreneurs turn their attention toward building platforms that make it easier for physical businesses to survive and thrive.

The next great frontier in the space between online and offline retailers is data. Part of what makes e-commerce so appealing is that, as opposed to offline sales where very little if any information is captured, every online transaction gives the seller a chance to better understand their customer.

But this same type of big data is creeping into offline businesses through new point-of-sale systems, digital loyalty software, and other tools designed to give owners and managers the information they need to make smarter decisions.

Here are the five most important new datasets helping offline retailers succeed in the new hyper-connected era.

Who are my customers?

Business owners first need to know key data about who their customers are.

This means ditching the old “win a free lunch” fishbowl and digging deeper to understand their customers’ purchasing habits: who is new, who is a regular, and who is lapsed and needs to be brought back.

But it also means understanding more about them outside the context of that particular business. What social networks do they use? What types of media do they enjoy? This data helps business owners customize and tailor marketing and product offerings for maximum benefit.

When are they coming in?

One of the key differences between offline and online commerce is that for offline, every hour that a business stays open costs them money, from employees to utilities and beyond.

With the right type of tracking from POS or digital loyalty programs, business owners can quickly visualize patterns of heavy and light traffic, enabling smarter staffing and products, services, and offers to help maximize off-peak times.

What is the best way to reach them?

Once a connection is established with a customer, data from new technology can help identify the most effective communication channels — email, mobile or social media.

From there, business owners can then determine which types of incentives compel behavior in terms of what’s being offered.

E.g., regulars might be inspired by key menu items, while lapsed customers might want to see something new). Also look at how it’s being offered (certain customers shy away from bringing in physical coupons) or when it’s being offered (customers don’t like to fumble with discounts during rush hour).
This information is virtually impossible to ascertain via more traditional offline marketing channels.

What is the ROI of loyalty marketing?

A customer loyalty program is an essential marketing pillar for many offline businesses, especially when it can be customized to a wide spectrum of customers with a wide spectrum of preferences and behaviors.

The reality is, when it comes to technology, not all consumers are created equal, and different methods of loyalty marketing will resonate differently within different demographics and geographies.

With a shift to digital loyalty programs, business owners can now better gauge what types of rewards actually resonate with customers by correlating those offers with effective data.

What’s more, the data these services offer help businesses the overall impact of loyalty programs with hard numbers versus subjective sensibilities. This data is made even more important in the context of new marketing channels like the daily deals sites that can, in certain cases, do more harm than good.

How do my locations compare?

Most business comes down to decisions about how to deploy resources. Better data can help companies understand the difference between customer bases at different locations.

This can include different patterns for heavy and low traffic and which types of products and offers are appealing to different groups.


Ultimately, the reason offline businesses persist is that there is something fundamentally different about purchasing a product or service from a person versus a website.

Local businesses are not just seats of commerce, but are also centers of community. And with the data from a new generation of integrated software, these businesses will be able to play this vital role for decades to come.

Zachary Hyman is co-founder of SpotOn, a company that specializes in digital loyalty programs for small and local businesses.


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