July 18, 2007

Multichannel Retailing Week: Web Analytics

A Vice President attends between one and two thousand meetings a year. Maybe a quarter of those are higher-level meetings, with multiple VPs discussing business issues.

Frequently, a VP will bring a technician or business intelligence analyst to a meeting, to help support an important point.

During the past twelve years in multichannel retail, I can count on one hand the number of meetings I've been in where a Web Analytics guru was one of the chosen technicians to demonstrate key customer insights.

This is not a harbinger of things to come, or a criticism of the folks who do web analytics. It is a failure of multichannel retailers to appreciate or understand what web analytics can do to help the business improve.

Could you imagine if an analyst walked into a meeting at Bloomingdales, and told a team of merchants this fact: 67% of store customers walked past a coat after looking at it, 33% stopped by to pick it up. Of the 33% who picked up the coat, 25% took the coat to the dressing room. Of the 25% who took the coat to the dressing room, 38% bought the item. In total, for every 100 customers who walked past the coat, three purchased the item.

Retail merchants would salivate if they knew that type of information, by item.

And yet, every multichannel retailer has individuals who do this type of measurement on a daily basis for the websites they support.

In our multichannel businesses, we still have disconnects between catalog employees and online employees. There are bigger disconnects between online employees and retail employees. The language barriers are enormous.

Web analytics practitioners suffer from two language barriers. First is the technical to practical language translation that must happen for business folks to act upon what a technician describes. Second is a direct-channel to retail-channel language translation that must happen for retail folks to act upon what has been learned in a direct-channel.

Web Analytics is a wonderful field that has enormous potential to improve multichannel retailing. This potential will be harnessed when multichannel retailers hire "translators" to convert language from technical to business-oriented, from direct-channel to retail-channel. When this happens within the right culture, eyes will open, and web analytics will become tightly integrated with all business systems and analytical teams.

3 comments:

  1. Jacques Warren4:34 AM

    Kevin,

    You are quite on the money. A large part of Web Analytics success is its adoption, i.e. managers really making decisions based on what insights it brings. Being a translator is crucial, because it specifically adresses that dimension, regardless of technology, etc. If a web analyst can't communicate in terms that transform the way the marketing manager sees things, WA adoption will take a long time, or be plainly ignored (which is still very much the case).

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  2. Willyzekid6:38 PM

    I would add that those language barriers are not technical. Retail and web folks share the same analytics knowledge/background. Actually - please dont be pissed :) - I do find that retail analysts deals with a wider range of analysis technics from geographic/census analysis, market basket analysis, trafic data, customer database, etc. Retail analysts are also usually very much aware of direct-channel languages as a lot of retail chain also do (e-)mailings through good old reward programs and their sales are intrinsically linked to those direct marketing campaing.

    So the problems lies into translating knowledge gained from web customers to retail. It's all the more difficult as web and retail activities are integrated into different departments, depending on different managers and evaluated on different metrics. In those cases, retail and web experiences are usually miles away. Customers are definitely different, merchandising / layout / presentation / product order / colors /etc. are different, promotions might even be different. So you can't easily go from 67% of web customers left the coat web page to 67% of store customers walked past a coat after looking at it. Chances are, differences between web and store experiences are so high and departments so de-integrated, I, as a retail manager, would still heavily rely on the good old camera and in-store customer movement analysis. That said, I am sure product managers would deeply value that information (along with the camera analysis) as they are supposed to nurture all customers…in store or online. BTW, Kevin, I am waiting for your text on multichannel product managers :)

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  3. I agree that retail analysts deal with a wider range of problems, and in actuality, have to make good decisions with much less data.

    I disagree with the concept that retail analysts are familiar with the concept of direct-channel language. They are reasonably familiar with catalog language, but struggle with the online channel.

    That being said, we each bring our own biases and experiences to the discussion, so it is certaily reasonable to assume you're right.

    I'm probably not going to talk about retail product managers, as I don't have a lot of experience with these folks. I need to write about topics I have experience in, areas where I have some level of credibiilty ... the key word being "some"!

    Jacques --- our good friends, the web analysts, will need to sneak out into that complex retail ecosystem, and get to know folks.

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