When shopping center pioneer John Smith wanted to determine how long customers were staying at his malls in the 1950s, he would walk the parking lot counting cars and placing his hand on hoods to see whether the engines had cooled. His intuitive strategies worked — he developed successful retail locations across the country and became a founding member of the International Council of Shopping Centers.Today, his grandson, Will Smith, has found a much more precise way of gauging retail success — as co-founder, executive chairman and chief strategy officer of San Francisco-based Euclid Analytics, Smith leads a company that brings data analytics capabilities to brick-and-mortar stores, where 9 out of 10 dollars are still spent in the U.S. When Euclid Analytics was founded in 2010, Smith had the deep roots in retail and his co-founder, Scott Crosby, had long-time analytics expertise; Crosby was a previous co-founder of Urchin, which was acquired by Google in 2005 and became Google Analytics.
“The concept is, how do we take the data that online businesses have come to know and use and bring it to the offline world to illuminate shopper behavior and identify shopper identity,” says Christiana Rattazzi, Euclid Analytics’ director of marketing, “so that brick-and-mortar stores can have the same luxury around data that their online counterparts have?”
CASE STUDY: JO-ANN FABRIC AND CRAFT STORES
With 850 stores in 49 states and more than 23,000 associates, Hudson, Ohio-based Jo-Ann Fabric and Craft Stores’ investment in brick-and-mortar runs deep. The company came to Euclid Analytics for help in learning more about the people coming into their stores each day — not just learning demographics but measuring behavior and targeting their message based on that behavior.
The key to the strategy lies in the Jo-Ann stores’ wi-fi access. Through signage and associate messaging, customers are encouraged to sign onto the store wi-fi with their smartphones, which automatically triggers an email sales offer, such as $5 off a $25 purchase. That allows Jo-Ann to track how long that customer stayed in the store, whether the visit resulted in a purchase and what the customer does next. The resulting data can determine whether that visitor — identified by email address — went online to shop instead and can also feed ads to them through social media. Integration between stores tracks each successive visit to that or any other Jo-Ann store.
Rattazzi says that the social media campaigns built upon this data have increased store visits between two and six times, and she estimates that Jo-Ann will double its customer profiles over the next year as a result of this program.
“CHANNEL AGNOSTIC, EXPERIENCE FOCUSED”Most retailers have long been focused on conversion, says Rattazzi — whether an individual store visit resulted in a purchase. But increasingly, retailers don’t care whether customers buy in-store or online. “The trend we’re seeing is the need to be channel-agnostic and experience-focused,” she says. “There’s a shift happening in that if the store had an influence on a purchase, even if it didn’t happen that day or in the store at all, that’s really important. Jo-Ann certainly recognized that.”Rather than the brick-and-mortar store being solely a place for an individual transaction to take place, Rattazzi says stores will increasingly become “product playgrounds” — places to interact with products and associates who play the role of expert. It’s those authentic experiences that customers — particularly Millennials and Gen Z — are craving; in fact, research by Euclid Analytics found that 66% of Gen Z shoppers prefer the in-store experience.
But right at the heart of creating that experience is permission. “There needs to be an exchange of value,” says Rattazzi. “I’m opting into something that’s clear and explicit, and I know by giving my email Jo-Ann has the right to market to me. But in exchange, I want that relationship with Jo-Ann. [Permission is essential] for building an authentic, trustworthy relationship with brands and shoppers.”