Is it the end of the road for big data in e-commerce?

The big data revolution has been the backbone of e-commerce. The term has been in the marketing lexicon for decades. Its use has grown exponentially and has led to significant developments in data segmentation, trigger emails and website personalisation, all of which have led consumers to marvel at the impact that big data has had on e-commerce.

However, though big data can provide a solid, scientific foundation on which to build a marketing strategy for online businesses, it is not as nuanced as marketers need it to be to understand complex shopper behaviour and devise successful consumer targeting strategies.

The greatest success stories in this arena are still the pioneers like Tesco Clubcard and Boots Advantage Card, which laid the foundations for big data based loyalty programmes as we know it. 

Amazon and other e-commerce platforms have learned from these pioneers and are replicating the same big data based recommendations for the e-commerce era. The question is whether this is truly giving consumers what they want when they’re shopping online?

Perhaps not. There are two issues why this might be the case.

Big Issues

Firstly, we have all received the familiar, ‘Since you purchased ABC, you will be sure to want XYZ’, email and seen the matching banner ad day after day. This is all very well, but when consumers are bombarded by messaging that is either based on a dated purchase or a one-time search, it can get very tired, very quickly and will most likely end up in the trash.

the upcoming GDPR legislation puts the spotlight on how much data is being retained

Brands are beginning to realise this too, and the fact that Procter & Gamble have slashed digital media budgets shows they are starting to take action in accordance with consumer sentiment.

Secondly, the upcoming GDPR legislation, which comes into force in May 2018, puts the spotlight on how much data is being retained and how it’s used by brands and retailers.

It looks set to change the way companies use historical purchase data, to inform marketing activity, for good. Consumers can demand the data that’s held on them is removed from records or not used, and data collection – in terms of opt ins – will be subject to more rigorous restrictions than ever before.

This will put marketers under increased pressure as they struggle to fathom a future in the industry where personalisation and tailored messaging is not a priority.

Another way

However, there is another way to avoid losing a connection with consumers in the face of GDPR, and pulling digital spend is not the answer. One that is based on understanding behaviour, rather than big data.

Big data alone does not enable the ability to fathom the vagaries of consumer decision making that leads to success in e-commerce. Brands have another, more powerful, option available to them to connect with their consumers. By demonstrating understanding of the thought processes consumers go through at every stage of the purchase decision, brands can shape marketing strategies for the future.

Heuristics, the mental short cuts that consumers unconsciously go through when deciding to purchase, encompass a broad range of emotions that cannot be identified and understood by data alone.

the mental short cuts that consumers unconsciously go through when deciding to purchase

Through our research we know that these mental shorts cuts – from people valuing exclusives and limited editions, to consumers justifying higher prices by calculating long-term benefits – are rooted in behavioural science. There are 128 heuristics in total, but working with Durham University Business School, we have identified the nine most relevant to purchase decisions, we call these Sales Triggers.

This in-depth research forms the basis for our upcoming report and has allowed us to reframe behavioural science and make it accessible and usable for brands and marketers across many sectors. To do this, we are testing different creative messaging, in different environments, and at different points in the digital purchase journey.

This will deliver some unique insights into the behavioural science triggers to use in each media environment, particularly focusing on the three main digital environments that your brand can use to drive traffic and e-commerce sales – a brand’s website, social channels, and how it is presented on third party e-commerce platforms. The desired outcome is to help marketers answer the how, what and where of investing their marketing budgets.

Practical applications

We have put this theory into practice with our work on a digital ‘shop-in-shop’ for Samsung. This branded platform was developed exclusively to feature in more than 50 electrical retailers’ e-commerce platforms.

We designed and built immersive content to clearly demonstrate the key features of the Samsung TV/AV range, simplifying consumer choice and guiding them through a considered purchase without hanging on over-personalisation. The results have been impressive, driving significant online sales.

Ultimately, although the roll out of GDPR may seem intimidating for brands, the post-big data era should be an opportunity for brands and retailers to rethink their approach to marketing.

By stepping away from the sort of hyper-personalisation that is beginning to frustrate consumers, brands might find an even more effective way to connect with them. Behavioural science can be the new weapon of choice for brands tackling the ongoing challenge of driving sales within the e-commerce channel.

By segmenting the messaging used in the three key channels that link to e-commerce, brands can identify what is the most effective and tailor their marketing activity accordingly.

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