"Retailers are grappling to not only understand consumers' varied shopping patterns, but also capture shares of their increasingly fragmented shopping trips," said Susan Viamari, vice president of Thought Leadership for IRI, commenting on The Omnichannel Journey: Translating Big Data Into a Prescription for Growth report.
“Retailers really need a clear 360-degree view of shopper spending to grow,” she says. “This perspective will help them know what their key and target shoppers are looking for, so they can engage the shopper where, when and how it matters most to them. Those retailers that can personalize the shopping experience move their customers up the loyalty ladder, increasing the lifetime value of those customers and supporting growth along the way.”
Four Steps to Success
Industry experts estimate that it costs anywhere from five to 25 times more to acquire a new customer than it does to retain an old one. With this in mind, IRI encourages retailers to follow four steps to maximize the value of each and every one of those customers and capture share: 1) reward current customers, 2) grow current customers, 3) activate new shoppers and 4) reactivate customers that have lapsed. Since attracting new customers is expensive, the key to success for retailers is to get the most out of their current customers, rather than just focusing on attracting new customers, to minimize costs.
Maximizing customer loyalty begins with understanding high-value customers and assessing their level of loyalty. And to move customers up the loyalty ladder and even acquire new customers, retailers need to shift from the standard category management perspective to a customer management perspective.
Loyalty programs are flush with information about members—from category and brand preferences to price and promotion sensitivity. This information is essential to developing programs that target and resonate with a retailer’s best customers.
Personalization Begins with Knowing the Shopper
Personalization will be the crux of future retail success. This does not mean retailers should abandon mass-marketing programs. Rather, the future will be about supplementing mass efforts with targeted programs aimed at deepening a customer’s relationship with a retailer. Getting this right means that retailers need to know their customers inside out, so they have the right marketing programs, the right products and assortments with the right prices, and marketing messages aimed at positively influencing customer loyalty and driving activation.
Targeting these high-value and potential customers is not easy. Traditional scanner and demographic data and frequent shopper program data provide some visibility into important shopper attitudes and behaviors. However, this does not provide the all-important 360-degree view of shopping and spending habits, or visibility into rest of market and national coverage.
“The path to purchase has become a maze of twists and turns, with thousands of points of interaction along the way,” added Viamari. “Retailers need to harness the vast sea of big data around shopper attitudes and behaviors and bring it together in integrated and real-time fashion. Only then will they understand what is moving the needle today, and predict and prepare for what tomorrow will bring, so that they can consistently serve their customers in a highly personalized and engaging fashion.”
Enjoy curated articles directly to your inbox.