“We make some of the best known brands in the world, and those brands are used by 2 billion people every day.”
Few industries reach out to and impact the lives of more consumers every day than the Consumer and Retail Industries. Yet the industry’s transformation from Mass Marketing to 1:1 Marketing is mostly all hype with dramatically negative bottom line results. Let’s begin by considering the current state of the Consumer and Retail industries:
- Despite billions of dollars spent on market research every year, big food Companies were slow to respond to changing consumer tastes from packaged and processed food to fresh and wholesome alternatives. Some 43% of US consumers are planning to eat less processed food in the next year according to Mintel’s American Lifestyle 2014 report.1 The bottom line impact? As per Fortune’s Special Report: The war on big food, “Major packaged-food companies lost $4 billion in market share alone last year, as shoppers swerved to fresh and organic alternatives.”
- According to Ad Age, “Quite simply, big brands are losing one of their most valuable assets: consumer trust. And the fight to regain it will shape the industry for years to come.” 2
What Do Consumers Really Want?
In the past direct consumer interactions were mostly restricted to calls or complaints into the call center. Most retail and consumer companies were surprised when consumers began to reach out and communicate to them directly via digital and social media. Responding to individual consumers was not their expertise. In fact, consumer conversations were unheard of beyond regimented settings such as facilitated focus groups and primary research interviews.
Today’s digital consumer is much more vocal and diverse. What do they expect from their favorite brands? The four most common needs include:
1. Personalization: Investing in providing products and associated services and information that are specifically relevant to them as individuals. Practically speaking, this could mean a shift from what’s good for the company i.e. “Packaged and Processed” to what’s good for me “Fresh and Wholesome.”
2. Two way dialogues: Communicating with them on their terms, be that time, channel platform or message. Consumers seek a thoughtful dialogue with brands, where consumer opinions are solicited and their responses are acted upon
3. Omnichannel: Clear and transparent access, via multiple channels, with a single and consistent proposition and treatment strategy be it online or in-store
4. Permission-based marketing: Consumers dislike general and unsolicited push marketing, particularly through personal devices such as phones and tablets. They are also much less likely to respond to generic messages or mass media
Why Have Retail and Consumer Companies Failed at 1:1 Marketing?
Call it what you may – but ultimately the industry shift from mass marketing to 1:1 (or personalized, individual) marketing calls for a major transformation in how business is done today. There are three major challenges to address:
Challenge 1: How do you manage the volume, variability and ownership of data?
- For a retail or consumer company gaining the right insights and responding to the billion consumers who buy your products each week with the right personalized messages is key. The challenge is volume.
- Consumer data that combines demographics, purchase history, preferences, promotional responses and location – comes in multiple formats and data structures. The challenge to overcome is variability.
- Data on consumers comes from multiple external sources including consumer panels that may be owned by the syndicated data providers, retailers who own in-store loyalty data, social and digital data that you may need to buy from Facebook, government demographics, as well as internal research done across brand, consumer insights, and sales departments. The challenge is obtaining and integrating the consumer data.
Challenge 2: Who responds to the consumer?
- Consumers expect not only a seamless experience but also a personalized response versus the generic mass-content they get from TV and cable advertising.
- Responding via personalization to create a seamless shopping experience over any channel calls for the integration of multiple sources of heterogeneous data to derive insights and create more targeted responses.
- Organizational ownership of consumer response sits somewhere between brands and marketing, sales, consumer insights, call centers and, of course, your IT organization. Today’s mass market consumer and retail organizations clearly weren’t structured to respond to individual consumers.
Challenge 3: Existing IT systems just weren’t built to respond to a billion consumers live!
- Retail systems largely utilize Relational Database Management Systems (RDBMSs) first developed in 1970s and driven by Oracle, IBM DB2, Microsoft. Using SQL (Structured Query Language) as the programming language for managing the data, structure is actually the primary challenge of using an RDBMS to store and manage content. Because in order for RDBMS to perform well, the data must first be mapped with a pre-defined schema, or set of constraints, that defines how it is structured and organized for analysis. Unfortunately for industry users of RDBMS, consumer data is not just vast and variable, it is also largely unstructured and does not fit neatly into rows and columns. This is a problem because today’s consumers need to be responded to individually and live at the point of purchase in-store or online. Take the case of Jen Dough and Joanne Deogh, both 30 years old and living in the same apartment building. Joanne is single while Jen is a married, new mother. If your loyalty database was not updated to capture Jen’s unique new status as a parent, these women are not likely to be offered personalized, differentiated promotions at the point of purchase – and you are not likely to succeed in your marketing efforts. Agility and the ability to encompass (and make sense of) unstructured data is a crucial aspect to any effective, enabling technology for today’s consumer data. Designing the perfect schema with rows and columns for a billion consumers with the goal of responding to them each as individuals just won’t work with RDBMS technology!
Designing a Consumer 360 Approach That Works
Ultimately consumer and retail companies need to listen, analyze, and engage with consumers 1:1 and live at the point of the transaction whether that’s online or in-store. We call that Consumer 360. Clearly traditional mainframe or RDBMSs lack the flexibility and scalability to support Consumer 360.
NoSQL Represents a Revolutionary Solution for Consumer 360
NoSQL (Not Only Structured Query Language) technology represents a transformational change in perspective. Instead of getting the schema just right before doing anything else, NoSQL advocates loading up the data first and then seeing where the problems lie. This problem-oriented approach focuses on how the data will be used (queried) rather than how the data must be structured to fit within a traditional RDBMS. For Consumer 360, this shift means you would not have to spend a year trying to figure out the right data model and perfect schema to analyze and store data on a billion consumers. Instead, you can load the data, have it indexed automatically, and then search and query it for emerging trends and demand signals.
Why MarkLogic is the leading NoSQL Database for Consumer 360
In a nutshell, there are four key value differentiators MarkLogic brings to retail and consumer companies, including:
1. Enterprise Grade Performance
Firstly, and perhaps most critically, we’re talking about consumer data in your database. This is all about handling huge volumes of data while ensuring transaction integrity and security. Most open-source vendors fail at just this crucial requirement. MarkLogic’s platform was designed to be enterprise-ready from day one – which means that you have all of government-grade security, high availability, disaster recovery and transactional consistency you need for your mission-critical consumer applications.
2. A Superior Operational Data Warehouse
A Consumer 360 calls for real-time, operational capabilities. You need to recognize and respond correctly and accurately to Jen Dough the moment she enters your store or online. Making the right product and promotional recommendations to her is what will close the deal. Simply put, your data warehouse must be transactional and operational to enable websites, e-commerce and other applications in-store while at the same time enabling analytics and storage of terabytes and potentially petabytes of data.MarkLogic was the only NoSQL database appointed to Gartner Leaders Quadrant for Operational Database Management Systems. Also, in the 2014 Gartner Report: Critical Capabilities for Data Warehouse Database Management Systems, MarkLogic came out ahead of all other vendors in the customer rating for Operational Data Warehouses.
3. Search and Query Capabilities
MarkLogic has a built-in search engine that no other database has. You can fine-tune search across structured or unstructured data—including full text, large binary and geospatial data—getting lightning fast results and advanced features such as alerting. From a consumer or business user’s perspective this makes your website and e-commerce business much more appealing because they can finally find the products they seek. MarkLogic’s semantic capabilities also enable storage and search for logical product linkages (e.g., ingredient linkages for dinner recipes or the right toner for my HP Printer). With semantics you can store and query billions of facts and relationships, and infer new facts – making your data and your database much more intelligent.
4. Application Services for Consumer Analytics
For a Consumer 360 to work you want to build the right applications on top of the data. MarkLogic’s integrated HTTP Server has full-featured Java and REST APIs, among many others, to make managing data and building two and three-tiered applications easy, giving your developers faster access in the language they’re most comfortable with using.
The consumer and retail industry are at a critical crossroads when it comes to listening, analyzing, and responding to consumer needs. Sure, part of the problem has been internal organizational structure and change management issues. But the biggest issue has been the lack of credible technology solutions to deal with the problem. MarkLogic represents a transformational approach to this technology challenge – and the business case has never been clearer.
Please be sure to read my other articles in this series:
- Big Data, Little Insight: Challenges for the Retail and Consumer Industries
- Removing Roadblocks to Omnichannel 360 in Retail
- Products and Packaging in a Digital World
- e-Commerce – Closing the Deal with Consumers and Search
- Loyalty – Hype vs. Reality