Multi-channel shopping, along with the arrival of smartphones, is the most significant
change that has taken place in retail lately. Mobile shopping behaviors are
considerably different from the shopping behaviors of other existing channels such as
offline, TV, and the Internet. However, initially, Korean retail companies had trouble
coping with this market change owing to a lack of understanding of mobile shopping
behaviors. Therefore, they espoused big data analytics, expecting to obtain customer
insights on not only mobile shopping behaviors but also multi-channel shopping
behaviors. This case study discusses a trial made by a leading Korean multi-channel
retail company to implement big data analytics in its marketing.
The company was confronted with two issues, which prompted it to embrace big data
marketing. First, the company recognized that it is extremely important to understand
customer behavior across the entire shopping process and accordingly conduct the
targeted marketing. Second, the company seeked to encourage the customers who
used only a single channel to use diverse channels for sales as well as retention. The
company thus tried to develop its rules for triggered marketing by analyzing the
behavioral characteristics of multi-channel customers. For this, behavioral data for
three years, covering about 10 million customers, were gathered and analyzed. Lastly,
the company came up with detectable customer metrics that were expected to forecast
the sales. In addition, customer segments were derived from data clustering based on
customers’ shopping pattern, and marketing strategies were developed accordingly.
Furthermore, the big data analytics revealed the importance of returning customers,
and recommended modification to the royalty program and promotion of specific
product categories.
This case study proved the merits and demerits of big data analytics. On one hand, it
helps in understanding the market trends of complex environments such as multichannel
retail, and the significance of developing marketing strategies accordingly
and reaping immediate benefits. On the other hand, it analyzes only the data of a
given condition; therefore, it is hard to forecast the results if the condition, such as
product-related offers, changes considerably. Big data marketing seems to work more
effectively when it is used in combination with other qualitative research. This case
study shows the status of big data marketing in a Korean multi-channel retail
company and highlights its potentials as well as limits in this industry.
change that has taken place in retail lately. Mobile shopping behaviors are
considerably different from the shopping behaviors of other existing channels such as
offline, TV, and the Internet. However, initially, Korean retail companies had trouble
coping with this market change owing to a lack of understanding of mobile shopping
behaviors. Therefore, they espoused big data analytics, expecting to obtain customer
insights on not only mobile shopping behaviors but also multi-channel shopping
behaviors. This case study discusses a trial made by a leading Korean multi-channel
retail company to implement big data analytics in its marketing.