How analytics gives Indigo Books & Music a read on its future as a retailer

The way Indigo’s Alison Chick sees it, analytics ain’t just about marketing anymore.

Although the Toronto audience she recently addressed at the Dx3 conference was heavily populated by professional marketers, Chick urged them to use big data insights for purposes other than, well, marketing.

“I believe you can use the data in lots of ways,” said Chick, VP of loyalty at Indigo Books & Music.

Here are key takeaways from her talk on breaking big data out of the marketing box, taking it to the store floor and rethinking the rules of (digital) engagement.

Analytics for all: Chick said Indigo uses data insights to make “all sorts of business decisions” unrelated to marketing or IT. “So we’re using the data for operational purposes vs. just network purposes,” she said.

For example, the merchandising division uses it to determine the right product mix and optimal pricing for ROI and profitability. Indigo has shifted its focus to offer more non-book inventory, a move that helped it post a $33 million third-quarter profit despite operating five fewer stores than it did a year earlier.

Even Indigo’s real estate unit decides “where to put up stores” based on customer analytics data, Chick said. (The chain closed three Toronto stores last year. It plans to shutter another in downtown Vancouver this summer but open a new one elsewhere in that city’s core.)

Get on the same page: Make sure your data team is on the same wavelength as your other business teams, Chick advised. “Do you know if your analytics team understands the strategy of your business?” she asked the audience. Chick interviewed every single top Indigo executive to gauge their business goals and thoughts about data. She then reported her findings to Indigo’s analytics staff.

She regularly puts two questions to her analytics team: “Do you know the five big things that matter to Indigo? What are you doing to help Indigo with that?”

Keep it real: Chick has also been known to ask Indigo analytics employees this question: “When was the last time you walked a store floor?” She believes they should “actually talk to real live customers” to test out some of their data-based hypotheses in reality. “The next step is to make that data available to field (store sales) staff,” she said.

Look within: Chick estimated most companies can probably get meaningful data sets on their customers by relying on 80 per cent internal data (i.e., in-store transactions, website browsing) vs. 20 per cent from outside data (like social media, third-party sources, etc.).

Find allies: Locate change leaders in key functional groups. Remember how Chick interviewed every top Indigo executive? She turned that into a spreadsheet tracking which ones “want to use data and which ones need more convincing.”

Rules of engagement: By far, the most interesting part of Chick’s presentation for me was her acknowledgement that Indigo is currently reassessing the way it deploys two of today’s hottest digital engagement strategies: email campaigns and personalization.

“One of the biggest things we’ve learned is to step back a little bit,” she said regarding emails. She added that many companies now realize customers “end up getting emails every single day, half of which they don’t even open.” According to Chick, Indigo has an email open rate of 20 to 30 per cent, well above the industry average of 15.8 per cent.

While Chick didn’t offer specific details, she said Indigo is also in the process of refining its personalization strategy to hone in on “what will drive the biggest business results.”

“It’s not about personalizing everything. It’s about picking the right spots” to personalize customer experience, she said.