KHWS Blog: Have we reached D-Day for big data?

Have we reached D-Day for big data?

Behavioural Insight

Big data, as a term, has been used by marketers for many years now, but technology has proliferated its use on a more practical level. Its impact on the ecommerce arena is undeniable, you only have to look at the significant developments in data segmentation, trigger emails and website personalisation to see its effect. However, though big data might provide a scientific foundation for online marketing strategies, it does not give marketers the insights that are required to understand complex shopper behaviour and devise successful consumer targeting strategies. There are few disruptors breaking the mould in the area, and the greatest success stories remain the original pioneers, including Tesco Clubcard and Boots Advantage Card, which paved the way for the big data based loyalty programmes we know so well.

Amazon and other ecommerce platforms are now replicating the pioneers’ learnings for the ecommerce era. However, is this giving consumers what they really want when they’re shopping online? We’d argue perhaps not, for two reasons:

  1. We’ve all seen an email titled ‘Since you purchased ABC, you will be sure to want XYZ’ pop into our inboxes, only to be accosted by the corresponding banner ad day after day. It’s tiring, and after some time we just begin tuning out the messaging that brands and retailers are so desperate for us to receive. However, the fact that Procter & Gamble has slashed digital media budgets shows that brands and retailers are beginning to respond to negative consumer sentiment.
  2. When it comes into force in May 2018, GDPR legislation, will reveal how much data is being retained and how it’s being used. It’s doubtful that consumers will like what comes to light. With this in mind, GDPR is set to change the way companies use historical purchase data to inform marketing activity. Consumers can demand the data that’s held on them is removed from records or not used, and data collection will be subject to more rigorous restrictions. Marketers will be under increased pressure, struggling to establish a way forward in an industry where personalisation and tailored messaging are not a priority or even an option.

While it might be an easy option, pulling digital spend is not the way to deal with losing a connection with consumers as a result of GDPR. Marketers must instead base strategies on understanding behaviour, as opposed to big data. Demonstrating that they understand shopper thought processes will help brands connect with consumers on a deeper, more powerful level.

Heuristics are the mental short cuts that consumers unconsciously go through when making a purchase decision. There are 128 in total and they encompass a spectrum of emotions that are unable to be identified and understood by data alone. Through our research with Durham University Business School we know that these mental shorts cuts – from people valuing exclusives and limited editions, to consumers justifying higher prices by calculating long-term benefits – are rooted in behavioural science. We have identified the nine heuristics that are most relevant to purchase decisions, and we call these Sales Triggers.

With Durham University Business School, we are testing different creative messaging, in different environments, and at different points in the digital purchase journey, delivering unique insights into which behavioural science triggers brands need to use in each media environment. More details of our findings will be revealed in our report, which will allow us to reframe behavioural science, making it accessible and usable for brands and marketers. Ultimately, we’re aiming to help marketers answer the how, what and where of investing their marketing budgets.

Although the roll out of GDPR may seem intimidating for brands, the use of big data in ecommerce is falling short in informing marketing strategies. The decline of big data should be an opportunity for brands and retailers to rethink their approach. By stepping away from hyper-personalisation that is wearing consumers down, brands might find a more effective way to connect with them. Behavioural science can be the new springboard to ecommerce sales success. By altering the messaging used in the three key channels that link to ecommerce, brands can identify which is the most effective and tailor their marketing activity accordingly.