The Drum caught up with Shop Direct head of insight Richard Boston, to discuss the group's data strategy and how it is shaping future developments in mobile and real-time communications.
Can you explain Shop Direct’s data strategy and the way in which you conduct data mining around customer behaviour?
As a business with experience of mail ordering across three centuries, customer insight is among Shop Direct Group’s core capabilities. As an account-based business, we are almost uniquely data-rich in the retail industry.
Over recent years, our business has developed from a traditional catalogue and store retailer into one of the UK’s leading pure-play e-tailers. Three-quarters of our sales are now completed online, with 18 per cent of those from mobile devices. E-commerce has enabled us to add journey data to the masses of customer information that we have always held and maximised.
What kind of data does Shop Direct have to collect to understand its business?
Understanding how shoppers arrive at our websites, how they browse and at what point in a typical session they tend to transact helps us to piece together a complete end-to-end picture of each customer journey. Coupled with the huge volume of VoC data that we collect, this enables us to remain ahead of the competition by continuously tailoring our proposition and service.
In online retail, collecting, storing and exploiting the right data in the right ways makes the difference between mediocrity and real commercial advantage. So over the last few years, our focus has been on adapting and finessing our approach to the mass of additional data that e-commerce, and particularly m-commerce, has afforded us.
In 2009, with online our greatest sales channel and mobile rapidly increasing in importance, several new challenges were beginning to become apparent. In particular, we were lacking a single customer view across multiple channels and wanted to increase customer retention while reducing our spending on paper.
In 2010, we began working with Celebrus, which provides real-time, individual-level online customer intelligence. By installing Celebrus’s tools and linking them to our existing Teradata software, we have succeeded in knitting together customers’ browsing history by loading every one of our millions of site interactions to our data warehouse in real time.
The results over the last 18 months have been game-changing.
We have almost halved the number of catalogues that we print and distribute as a result of being able to make more informed decisions about their effectiveness. We have also significantly improved conversion and retention rates by developing more advanced marketing campaigns. In email marketing alone, we have generated a 28 per cent uplift in incremental sales per email sent.
These initiatives helped us to increase our revenue by 1 per cent last year. And that’s without even scratching the surface…
What role does mobile play in the group’s data strategy, and how does capturing your online visitor behaviour shape real time communications?
We are now beginning to deploy web data to enhance leaflet targeting, optimise marketing investment and shape online and mobile development. We are also in the early stages of developing real-time personalisation in response to on-site customer behaviour.
With roll-out planned for the next six to 12 months, these initiatives will enable us to significantly increase profitability and position us firmly as the UK’s most insightful online and mobile retailer.
It’s an exciting time to be in retail and, despite our history, we feel like we’re just at the start of the journey.