Monday, December 7, 2015

Case Study: Go Big or Go Home, Nordstrom Experiments with Big Data

Retailers that leverage big data will design products that are more embraced by consumers, better anticipate and respond to market shifts, and engage consumers with predictable results. In the simplest terms, big data offers a means to understand shoppers via myriad digital touch points-from their online purchases to their presence on social networks (Forbes, 2014).

Today, a fourth generation of the Nordstrom family, along with an executive team, helms the company in partnership with a talented team of innovators and fashion leaders. From one tiny shoe store in 1901, founded more than century ago by John W. Nordstrom and Carl F. Wallin, headquartered in Seattle, Washington. Nordstrom has grown into an upscale fashion specialty chain with global reach. It offers an unparalleled selection of shoes, clothing and accessories, and an extensive range of services to make shopping fun and convenient. In 2014, the company achieved an all-time record for total net sales at $13.1 billion.
Nordstrom currently operates a total of 323 stores located in 39 states and Canada, with 121 full-line stores in the United States and Canada, 194 Nordstrom Racks, two Jeffrey boutiques and one clearance store. Nordstrom serves customers online through, and private sale site HauteLook that was purchased in 2011. The company also owns Trunk Club, a personalized clothing service that takes care of customers online at and its five clubhouses. Looking ahead, the company plans to open three new full-line stores in 2016, and will be relocating one full-line store. The company plans to open its first Manhattan store in 2018, while expecting to reach a total of 300 Rack stores by 2020.
(Nordstrom, 2015).

Nordstrom Innovation Lab consists of a team of techies, designers, entrepreneurs, statisticians, researchers, and artists and they currently have several experiments in place that tests and create new concepts each week.
Nordstrom’s objective is to create the finest customer engagement both online and in the traditional store space. As such they have implemented a cross-channel inventory project to effectively allow customers to see in real-time where a product is available and when they can expect to receive it. Nordstrom has been able to integrate online inventory as well as in-store inventory and this gives shoppers an unprecedented experience and the opportunity to leisurely shop how, where and when they want. Providing these real-time services has proven to be successful as thanks to all the data used same-store sales increased for Nordstrom.

Also, Nordstrom rolled out mobile kiosk devices and has provided tablets to make its POS (or point-of-sale) devices completely mobile. These POS devices allow sales staff to help customers check out from anywhere in the store, thus improving the shopping experience. Plus, POS devices help the staff to look for a product across the company’s inventory.

Two years ago Nordstrom started investing heavily in big data technologies, from $1 billion investment in e-commerce planned over the next five years. Their goal is to figure out what products to promote to which customers when and via what channel. Nordstrom wants to provide a customized personal experience and with the vast amounts of data they collect they can achieve this goal.
Apart from the data from their website or the Point-of-Sales data, they generate lots of data from their 3.6 million likes on Facebook (2015), 4.5 million followers on Pinterest and 645.000 followers on Twitter. In addition they generate vast amounts of data from their Fashion Rewards Program as customers that want to enjoy the large amounts of benefits provided in this program will have to use a Nordstrom credit card that tracks shopper spending and reward points.

Nordstrom’s digital capabilities make complete sense and what makes them important is that they are tightly integrated with all the parts of the business that ultimately serve the customer. This is not a matter of having the best apps, analytics, or social media tools. Instead, it’s a matter of tending to the details of building integrated digital capabilities, one at a time, making the right data accessible, and simplifying processes.
Possible Problem
Most retailers will struggle to do this because they haven’t architected their product or customer data for easy access by new digital capabilities. Without those core capabilities, integration with and among new digital capabilities is virtually impossible (, 2015)
It is very important to understand the customer’s need to find time to shop.  Nordstrom gets this. Consumers, especially young working people, are less and less interested in store visits that require a drive in a car and a major allocation of time.  In contrast, the Internet – open 24 hours seven days a week – allows for a leisurely shopping experience at a personally convenient time (Forbes, 2014).
Over the years, the Nordstrom family has been good at reading consumers’ minds. Nordstrom’s multichannel strategy and best-in-class customer service have made the company famous.

Proposed Solution-How can you use the data collected
Nordstrom is using the data they collect to attract Millennials—consumers between the ages of 16 and 34. They are well informed about the products that they buy and are one of the key drivers of the company’s online business. Nordstrom is catering to Millennials by bringing in famous brands like Topshop and by investing heavily in digital channels. E-commerce is Nordstrom’s fastest-growing channel. The company expects Nordstrom Rack and online business to generate over 50% of revenues going forward.
Millennials (born between 1980 and 2000) represent a trillion-dollar demographic and are poised to transform retail expectations. They are a generation 79 million strong, and by 2030 the number of Millennials in the U.S. will outstrip non-Millennials. They are platform-agnostic and expect a seamless shopping experience in every channel, including the desktop, mobile and in-store.

As of today, once you enter Nordstrom’s website you will see you have many options from signing into your account/opening a new account, taking a look at recommendations for favorite brands/bestsellers and new items, to what most love Trending Now. You also have your standard stores/events, wish list, and shopping bag tabs. And because the holiday is upon us Need A Gift Now? Buy Online And Pick Up In Store stands out to me because of the rush that happens every year! For some at least!

Currently the retailer does a great job at retargeting consumers! Since I am a Nordstrom shopper I browse and buy off the site often and love to look at trending items. I took a look at a pair of boots, a holiday skirt and jacket earlier today, logged into Facebook this evening and similar items came up for me to click on! As a marketer, I get the reason retarget to bring the sale in and as a consumer I don’t mind because I may just buy all three tomorrow especially because of the reminder.
Retargeting converts window-shoppers into buyers. Generally 2% of shoppers convert on the first visit to an online store. Retargeting brings back the other 98%. Retargeting works by keeping track of people who visit your site and displaying your retargeting ads to them as they visit other sites online (AdRoll, 2015).

Nordstrom can use Google Adwords to target audiences by using the keywords: apparel, shoes, handbags, cosmetics and then go into depth by using Kate Spade, Dior, Coach and Marc Jacobs for example. Once consumers use these words and store nearest you will show up as a place to purchase. By using conversion-tracking tools by Google, Nordstrom can see if Adwords are working effectively.

E-commerce Tracking
Transaction data is a vital piece of information when analyzing online business performance. Besides measuring conversion rates, revenue is more tangible to many business owners. Having the e-commerce data in your web analytics application makes it easier to perform analysis.

Nordstrom noted that while five years ago using personal data to advise customers about what they might like seemed "creepy," customers have shown that they want a personalized experience. Possessing knowledge about a customer will play an increasingly large role in building loyalty with her, Nordstrom believes, citing the way in which iTunes and Netflix create loyalty by providing very relevant recommendations.
By utilizing Pinterest, consumers can purchase directly from saved boards and Nordstrom can measure if this way of promoting products can help drive results.
Bottom line, Nordstrom should continue to use a team and Big Data to find actionable insights leading Nordstrom to enhance their customer’s experience.  

Monday, November 30, 2015

Google the Behemoth

Founded in 1998 by Larry Page and Sergey Brin, Google has lent its name to a verb: to Google something (or someone) is to search for the thing or person on the Web. Google is also a forward-looking corporation filled with brilliant thinkers and one of the largest companies in the world in terms of market capitalization .
Outside of owning the top-ranked search portal and email services, I want to take some time to explore three news related topics Ethics, Privacy and Security from GOOGLE the behemoth.

Earlier this year, Google was honored by the Ethisphere Institute for their ethical business practices and good corporate citizenship.
Google was the only company in the computer services category to be placed on the list. The influential search and Internet advertising giant has garnered a reputation for being outspoken on a number of social issues.
In February, Google announced it was awarding one of its RISE
Awards to Engineers Without Borders Australia, a nonprofit working on computer science outreach with Aboriginal and non-Aboriginal girls. The RISE Awards are grants that Google gives to organizations that promote computer science education and support girls and underrepresented minorities in technology.
Since 2010, more than 200 organizations have received an award, and this year, 37 organizations are receiving a cumulative $1.5 million to keep this vital effort humming along. Honorees not only promote ethical business standards and practices internally, they exceed legal compliance minimums and shape future industry standards by introducing best practices today.
Corporate social responsibility is not only gaining mind share among the general population, it's increasingly viewed as a business-boosting attribute. From stakeholders, employees and customers to executives and investors understand that ethical leadership drives outcomes ranging from operational performance to corporate integrity, transparency and workforce behavior. 

From my viewpoint 

As a consumer I am increasingly becoming interested in the social responsibilities of the companies behind the products and services I use and buy from. This is just one example where Google is truly going beyond just talking about being ethical.
In 2013 Nielsen surveyed 29,000 online respondents and half of all respondents (50%) said they would be willing to reward companies that give back to society by paying more for their goods and services—up from 45 percent in 2011 (Nielsen, 2013).

As of 2014, the global Internet population grew 14.3% from 2011-2013, and now represents 2.4 Billon people.
Can you imagine how much data is shared in one minute? Lets take Facebook for example, 2,460,000 pieces of data is shared every minute in a day! Infographic
Google keeps your personal information private and safe – and put you in control (Google, 2015).

So what data does Google collect?
The main types of data that is collected are based on the actions as consumers take using
Google services such as your basic account details and the things you create.

For example, do a search on Google, get directions on Google Maps, or watch a video on YouTube — they collect information based on the things you do, for better services. When you sign up for a Google Account, they will keep the basic account information you give Google, like your name, email, and password. And they store and protect what you create using their services, so you will always have your emails, photos, videos, and documents when you need them. They also give you tools to control the types of data that is collected and used (Google, 2015).

From my viewpoint 

Should I care about what Google collects from me since I am voluntarily using a mostly free service for things such as:

    Things I search for
    Websites I visit
    Videos I watch
    Ads I click on or tap
    My location
    My device information
    IP address and cookie data
    Account name
    Email address and password
    Emails I send and receive on Gmail
    Contacts I add
    Calendar events
    Photos and videos I upload
    Docs, Sheets, and Slides on Drive

Anyone who cares about maintaining some degree of privacy should pay attention and be aware.
For example, Gmail: prying and spying. In October of 2013, a federal judge refused to dismiss a potential class-action lawsuit brought by Gmail users who objected to its practice of analyzing the content of all the messages on its network and selling byproducts to advertisers. Those suing Google said it violated federal wiretap laws. This issue isn’t new to Google.
In congressional testimony in 2009, Google’s lawyers said its email technology was used for scanning for spam, computer viruses and serving ads within the Gmail user’s experience. U.S. District Court Judge Lucy Koh held that Google never told Gmail users that Google would create personal profiles and target users with ads. Nor did people who are not Gmail users, but who were writing to Gmail addresses, agree to let Google collect and parse their messages.

Google’s security philosophy
As a provider of software and services for many users, advertisers, and publishers on the Internet, Google recognizes how important it is to help protect consumer’s privacy and security. Understanding that securing products are instrumental in maintaining the consumers trust and strives to create innovative products that both serve the needs and operate in the consumer’s best interest (Google, 2015).

From GOOGLE’s viewpoint 

For the people who use Google services, the Internet offers so many opportunities to explore, create and collaborate. And to make the most of the web, it’s important to keep yourself safe and secure. Whether you’re a new Internet user or an expert, the advice and tools given by Google can help you navigate the web safely and securely.

Things to do:
·      Create strong passwords and keep your information safe.
·      Signing into your Google Account is simple and useful—but know when it is important to sign out as well.
·      Know how to control which account you use, and when.
·      If you use Gmail, you can follow simple steps to help make sure your account stays safe.     
·      Be extra careful whenever you go online using a network you don’t know, and learn about setting up your home router and WiFi network securely.
·      Find out some common signs that your device might be infected with malware—malicious software designed to harm your device or network—and how you can protect yourself.
(Google, 2015).

Lastly, Google seems to be in business to make information accessible and useful. It is up to the user to be aware of how information is being tracked and shared every minute of the day. Be proactive and monitor your online footprint but also know that this is the cost of using these services.