Big spenders hiding in plain sight
We know consumers no longer shop like they used to. Thanks to digital-first competitors like Amazon, retailers can no longer rely on price-slashing tactics, given profit margins are razor thin as it is. As a result, most have adopted an approach that is both profound and interconnected, focusing on establishing a brand connection through new retail touchpoints and expertly curated personalised experiences.
To achieve success through this approach, retailers need to be in a position to track individual customer preferences and profitability, identify and cultivate the high-lifetime-value customers who drive growth, and liberate the retail experience. This can be achieved by letting consumers buy anything they want, anytime, anywhere, in any way they choose.
While these expectations may seem daunting, the good news is that retailers’ best customers are hiding in plain sight. These are the high-value customers who should become retailers’ newest obsession. Not only are they out there, but it is possible to find them using data that most retailers have today.
For retailers, now is the time to undertake a fundamental and radical shift – from “shopkeeper” to “customer keeper”. When a retailer centres its whole business around serving its customers, everything changes. S Group, Finland’s largest retailer, has been collecting detailed shopping data for years through its popular loyalty bonus card, which is held by two-thirds of Finnish consumers. Last year, S Group gave customers access to their shopping history, providing valuable insights for consumers wanting to track their own spending habits. With access to shopping data, customers are offered increased control over its use, and it’s a lesson in building trust with data that many retailers can consider.
Embracing a data-driven mindset and discipline is a significant change for most retailers. But it can be simpler and faster than many might expect, and there are proven steps for achieving it. Retailers need to consider breaking down and integrating functional silos, acquiring data science and analytical skills, fostering a data-driven culture that measures what matters: which customers buy which specific items, where and how.
To generate the maximum value from this data, retailers need to apply analytics on an enterprise scale, across areas including revenue drivers, marketing costs, fulfilment costs and digital levers for customer behaviour.
Despite the obvious advantages data brings, getting data-use right can be a difficult balancing act for retailers. More than two-thirds of consumers (69 per cent) say they do not want to be greeted by name by a store associate they don’t know, and well over half (59 per cent) say the same about them knowing what’s in their online basket or on their wish-list.
Savvy brands are now able to collect, update, and consolidate data from a wide range of consumer channels. It means they acquire a 360-degree view of the customer – and the preferences, motivations, relationships and passions that drive them. In 2013, Woolworths bought a 50 per cent stake in data analytics firm Quantium, and in 2018 opened a new division called WooliesX, combining its data, e-commerce, loyalty and customer-service teams to leverage the information it collects about shoppers in order to establish meaningful relationships and an elevated retail experience.
Data is key to becoming a trusted adviser. By articulating that purpose clearly, consumers will truly know the brand, what it stands for, what it can offer, and how it can enhance their day-to-day life. Retailers must meet consumers where they shop, whether this be in-store or online, in order to create the genuine, meaningful, and personalised products, services, and offers that resonate with their customers.
Finally, retailers must also make sure they are learning the right lessons from their customer data. Only by analysing customer data on an enterprise scale can retailers develop a true picture of how each individual is behaving and how each product is performing. And that is vital for their future profitability.
Michelle Grujin is managing director for Accenture’s ANZ retail practice.