Two Chicago-area data companies predict big purchases of organic products and gift cards
BY SANDRA GUY Business Reporter email@example.com December 21, 2012 8:02PM
FILE- In this Jan. 10, 2008 file photo, gift cards for various retailers are offered for sale at a supermarket in Omaha, Neb. Conventional wisdom holds that gift cards make the perfect present for picky teens. But guess what? Not all teens love gift cards. (AP Photo/Nati Harnik, File)
Updated: January 24, 2013 6:34AM
While shoppers make their last-minute dashes to grab Christmas deals this weekend, two Chicago-area data analytics companies foresee big purchases of organic products and gift cards.
Retailers increasingly turn to such data-crunching companies to gain details about customers’ buying patterns and to tweak pitches designed specifically for each customer.
The stakes are particularly high this holiday because shoppers eager to get deals at the start of the spending season in November have pulled back and see no “must-have” fashions or toys to snap up.
Indeed, two sales-tracking firms, ShopperTrak and IBIS World, lowered their holiday sales-gains forecasts last week: ShopperTrak to a 2.5 percent increase from its earlier 3.3 percent forecast and IBIS World to an unspecified “lower rate” than its initial 4.9 percent increase from 2011.
Other analysts believe shoppers will come out in droves for a full weekend of gift-grabbing.
The analytics companies — Chicago-based Mineful and Northbrook-based Mu Sigma — crunched numbers exclusively for the Chicago Sun-Times to get a read on retail sales so far this season.
Sales of gift cards are up this year, as are tablet computers and the latest big-screen TVs, according to Mu Sigma, an eight-year-old data analytics consulting firm that has grown to $63.2 million in 2011 revenues and 2,000 employees worldwide.
Shoppers this holiday increasingly use social media — websites, Facebook, Twitter and Pinterest — to find coupons, promotions and incentives, partly because retailers are sending out offers based on their research showing what shoppers really like, said Dhiraj Rajaram, Mu Sigma founder and CEO.
Anything labeled “organic,” from cosmetics to vitamins, shows fast-growing sales, said Jaime Brugueras, owner and president of Mineful, a two-year-old company in the 1871 tech center at the Merchandise Mart.
Another trend this season shows shoppers buying gifts in bundles, such as gloves with hats or nutritional supplements that benefit the heart with those that boost immunity.
Brugueras started the company with his cousin, Jose Rubio, a software engineer, to give small online retailers insights into their customers’ behavior and software tools to market to those customers.
“We dig up what people buy and when they buy it, and make rules to automatically email the customer,” Brugueras said. “We might say, ‘Hey, you bought this shampoo; here’s the conditioner that goes with it.’ ”
Claudia Lombana, a shopping specialist for PayPal, compiled a list for the Sun-Times of her tips for procrastinators: Use the Milo app to search local stores’ inventories to find in-stock items; order e-gift cards and certificates online, which often allow waiting until Christmas Eve; and scan bar codes using an app such as RedLaser to quickly see whether another retailer is offering a better price on an item. And, if all else fails, click on decide.com to see whether you should buy an electronics, appliance or home-and-garden item now or wait for the price to drop and to check quality ratings on the products.
Holiday shoppers are clicking online at a 13 percent higher rate than a year ago for the first 44 days of the shopping season, according to analysis firm ComScore.
The amount spent online stands at $33.8 billion, the company reported last week.
For the entire season, the National Retail Federation forecasts a 12 percent increase in online shopping, to $96 billion. The numbers are helped by the calendar, since this is the longest shopping season in four years and includes two extra shopping days between Thanksgiving and Christmas.
A separate report released Dec. 17 by Mastercard SpendingPulse predicts that the final 10 days before Christmas have the potential to account for nearly 24 percent of the season’s overall retail sales, primarily because of a slowdown in spending in some parts of the country after Hurricane Sandy.