One of the most sensible and thought-provoking things that I heard last year was “you can’t use all the data that you’ve got and there is a fine line between personalised and creepy”.
One of the most sensible and thought-provoking things that I heard last year was “you can’t use all the data that you’ve got and there is a fine line between personalised and creepy”. Thank you Ruth Spencer, Boots director of digital and loyalty.
If, like me, you’re becoming increasingly intolerant of the blizzard of emails, particularly those that tell me what I’m going to like, this struck a chord. It led me to wonder whether the art of retailing is going down the same dismal road as economic theory.
Let me explain. I studied the ‘dismal science’ at university and have seen almost everything I was taught become discredited. Since the credit crunch economists have as much credibility as bankers or politicians.
The fundamental mistake economists made was attempting to achieve respectability by treating economics as a natural science rather than a social science. The application of science, big data and the most powerful algorithms will not produce answers but mere probabilities.
Retail falls into the same bag - it has to contend with consumer behaviour, which is rarely rational or predictable. The secret of successful retailing is getting your basic market positioning right, not being seduced by big data.
The rush to use predictive analytics to drive personalised services is not a panacea. Just take a look at some of the conspicuous failures over Christmas 2013. In each case there were valid explanations and excuses for the disappointment, which include panicking and pressing the discount button too soon (Debenhams); the declining appeal of superstores (Tesco); the low exposure to online and convenience (Morrisons); and the time lag before an improved fashion offer is recognised (Marks & Spencer). All true of course, but in each case I would argue that there is a much more fundamental failing - the failure to give their customers what they want.
I never cease to wonder how often M&S management ever visit their stores (and Marble Arch doesn’t count in this context). There is a total disconnect between the new fashion ranges and the core customer base. The range appears to be targeted at the catwalk fashionistas rather than the customers.
Arguably Tesco has the same problem that M&S discovered 20 years ago in that it has become too big and bland. It is failing to provide either quality or price.
Morrisons has to choose whether to stay with its traditional price appeal or to focus on its fresh food credentials.
And Debenhams has always discounted but never reconciled how this can be done without undermining the integrity of its Designers at Debenhams strategy. To be fair to Debenhams and everyone else, I think the artificial creation of Black Friday is a big own goal by the industry - it smacks of desperation and sends the wrong pricing message at a critical time.
Get the basics right first - whether it’s product, choice, convenience, quality, price or service - and then you can apply big data to the personalisation of offers to provide the icing on the cake. And who does this best? I’d say Next.
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