Role Of Analytics In Creating New Consumer Behaviors

I am in India visiting a large customer who has heavily invested into organized retail stores, a relatively new category for the Indian market. Their head of analytics shared some details of their last promotion with me. They ran an email promotion to send out coupons that were valid on one and only one day -15th August, the Independence Day of India, which is a holiday in the country. They were really bold to take out a page-long ad in all large newspapers on the 15th August highlighting this promotion.

Their sales, in all regions, soared on that day. It not only soared but broke all their previous records. They registered the highest sale in that year which was more than the Diwali sale. In the American terms, they managed to sell more on 4th July than on the Black Friday. This shocked me. I analyzed their efforts further to better understand this behavior.

Indians in India don't drink beer, barbecue, or watch fireworks on the Independence Day. In fact they don't do anything. It's just another day except that you don't go to work and kids don't go to school. That was the key. Since they didn't have anything else to do they went to the store and shopped. They bought things they were contemplating to buy for some time. This is where coupons helped and they also ended up buying things they didn't need. Yes, they are quickly learning from Americans.

What amazed me the most that the company manufactured this behavior that was analytics-led. They studied all kinds of data, created a promotion, made sure that they can execute on their promotions, and customers came. And, they are using this data to further refine their promotions and store inventory.

Big Data and analytics are not only useful to instrument existing customers' behavior but they could also help create new customer behaviors. This is especially powerful when the company is in high growth mode and has a bold vision to do whatever it takes to gain a top position in the market.

As I blog this, Indian government just changed their policy to allow up to 51% of foreign direct investment (FDI) into multi-brand organized retail sector. India has miles to go before the organized retail sector shapes up; Indians still prefer to shop at mom and pop stores and not at a large organized Walmartish store. Due to lack of a mature organized retail sector the (Indian) companies don't have a pre-conceived bias on how to run a large brick and mortar store - that's a good thing. They are not localizing a global brand. They are creating a new brand, and hence new consumer behavior, from ground up. And, analytics has been playing a key role than ever before.

Photo courtesy: McKay Savage