3 aspects of customer data to dig into for increased revenue
In today’s uber-competitive retail enviroment, knowing and meeting customer’s expectations requires understanding who they are. We should recognize them every time they shop-and the best way to do that is to learn from your customers themselves.
Paying such close attention provides the ability to better cater to shopper’s tastes – and retailers are generally rewrded for crafting such personal experiences.
According to a recent study by Motista, consumers with an emotional connection to a brand have a 306 percent higher liftime value. They stick with a brand for an average of 5.1 years vs. 3.4 years.
Further, they tend to recommend brands at a much higer rate: 71 percent vs. 45 percent.
But getting to the point where you can really understand who your customers are – what makes them tick – is a process.
It doesn’t happen overnight, and it won’t happen at all without a game plan.
Here are a few things to consider to help you really and truly understanding who your customers are, what they want, and what they are willing to do to have their needs met.
1. Learn to recognize your customer across channels
When you can recognize your customers, you can use technology to build on your understanding of their needs and reach them individually to provide for those needs.
Most retailers have custoers personas, i.e., carefully crafted profiles detailing who compromises their main groups of customers.
Putting customers first is much more than knowing what a demographic wants from you: It’s knowing specifically what a particular customers wants.
The question for the retailer is, is your retail business sufficiently integrated to give you a holistic understanding of what it takes to meet – and hopefully exceed – this one customer’s expectations?
And, if so, can you do the same for thousands of customers?
Some shoppers, only shop retail in a physical setting, while others see the store as an introduction. Once those customers become familiar with the brand, they do all of their shopping online. Other mix and match experiences. Having a foundation of integrated software, with data flowing aross yout point of sale, ecommerce, loyalty programs, shopping apps, etc. goes a long way toward painting a fuller picture of how your customer shop with you, and what they’re really after.
At first glance, their shopping habits appear sporadic and largely unpredictable. They may start online and finish in-store one day but do the opposite the next. Others want to buy online and pick up in store.
But with your technologies integrated together, you gather and synthesize data from each channel. Then you begin to recognize your customers and are better able to form an accurate understanding of shoppers’ behaviors.
Of course, the simplest way (though not alway the easiest way) to learn information about shoppers is to collect it directly from the source: Ask them.
That means training your store employees to ask in a way that isn’t pushyor frustrating to customers who just wnat to get in, get out, and get on with their lives.
But when you can give customers good reason to share their information with you online or in stores, you are in a better position to gather accurate data that will help you draw more useful, actionable insights form your company perfomance. For example, if there’s something a customer wanted thet’s not in stock, retailers can turn a bad experience into a positive one. How? By placingan order for them from the store – with free shipping – delighting the customer while gathering additional shopper data.
Companies with strong omnichannel engagement are able to keep 89% of their customers. This data is compared with 33 percent of companies with weak engagement. Answers to a small number of carefully targetedquestions can have a big impact on a business, whether in survey format or simply asked by an associate at the POS itself.
2. Learn which customers to pursue
Not every customer wants or warrants the same level of relationship with you.
However, big-ticket buyer and frequent shoppers are demonstrating a clear preference for your offerings, and you should know who they are.
As you begin to get a better understanding of individual customer preferences, you can extrapolate to the whole and immediately tailor your marketing efforts to reflect those unique preferences.
Knowing their information will help you attract more of that type of customers as it provides deep understanding of customer behavior and preferences, so you can personalize engagements, improve experiences and shape marketing strategy.
An important piece of customer data is determining the insterest of your customers that compels them to like – and recommend – your product or service.
Consider different methods for tracking who comes to your stores: How do you track store visitors? How do you do it in a way that doesn’t hold up the line? Whay should they give your information? What do you offer in return?
Don’t inconvenience shoppers and do provide them incentives.
Also, sometimes the most important customer ins’t the one buying the most expensive item, but the one who buys inexpensive items more frequently.
A frequent shopperof mid-priced items who then recommends a store or brand on social media regularly on social media has far more influence on the bottom line than someone who occasionally buys an expensive product but doesn’t social the experience.
3. Learn from what they buy
Once you’ve connected the data pointsacross your digital and physical channels to recognize your customers, you’re ready to start learning from what they browse to what they buy.
Market basket analysis lets retailers identify relationships between the items that individual people buy, and extrapolate these insights for more effective, contextualized marketing to others like themin in your customer base. On the individual customer level, that type of analysis studies:
- What is purchased
- How often someone purchases it
- What is purchased together
- Where it is purchased: online, app, in store, which store
- Social media mentions or recommendations
Market basket analysis effectively plants an idea for an impulse purchase in a shopper’s mind that has been observed in similar customers’ behavior.
For example, ir a retailer finds that shoppers who buy fleece robes and slippers also buy sweatpants a significant amount of the time, the location of swearpants might move closer to the sleepwear.
More granular findings are possible with differential market basket analysis, which can also eliminate the issue of a potentially high volumen of trivial results. In these studies, results are compared between different stores, customers in different demographic groups, different weekdays, seasons, etc.
For example, if one store in a franchise is busy on Tuesday, but the others are not, that indicates something unique about that store. Could be that its clientele is different, or its planogram is more appealing to customers.
The statistical data is used holistically, rather than just on an individual level. Using market basket analysis offer insight into what customers might also buy if the idea occurs to them.
Because more than 90% of people who shop make occasional impulse purchases that they didn’t intend to buy initially, projecting the correlations you find can serve to help more shoppers get what they would have wanted but didn’t see in the moment.
Studying those similarities and differences can yield useful insights, which could boost revenue companywide. Learning about their shopping habits, combined with who they are and who they are similar to results in thoughtful retailer recommendations and offerings.
The successful unified commerce retailer has components that work together to show customers that they are valued, which drives loyalty – and revenue – to greater and greater levels.
Reward shoppers for what you learn from them
If your customers shop regularly with you, leaving behind both dollars and valuable learnings for you, they should be rewarded. Incentives, such as loyalty programs, must at a minimum be multi-channel: Points earned online are transferable in-store.
But while, free gifts and coupons are important, more strategic choices are becoming common as retailers offer tragetd experiences, sweepstakes and digital content as rewards.
Successful omnichannel retailer such as Sephora have a “digital hub”, whic showcases everything happening in the physical stores, such as events, classes, services and brand launches.
Customer enjoy being “in the know,” particularly in the fashion and beauty segments. Sephora understands that providing information, customer data, can be reward as well.
Examples of information that really pique shoppers’ interests include: Releasing advance information detailing when new products will be available, or when an event will happen, or providing early access to things such as a designer launch or a meet and greet with someone famous who is a brand ambassador, or the author of a book.
Omni-channel at the heart of the strategy
Gathering cell phone numbers also lets retailers text customers with new, relevant offers or recommendations for related items based on theur purchasing histories, and fosters a sense of urgency.
For instance, a recent customer at Mike’s Bike Shop might receive a text about a Tuesday night workshop featuring a bike expert answering questions about bike maintenance.
Further, customer communication is relevant, regarding products and special events in which they are interested — and provided using a method they’ve indicated that they prefer (SMS message, email, phone call, etc.).
When you think through questions like these for your own retail business, you can more successfully unify your operations and customer engagement to place customers’ desires at the forefront of your business strategies.
Retail Pro is ready to help you in this process, with Cosin Consulting as exclusive partner in Spain and Portugal. We are specialists in creating customized retail projects that meet all the needs of our customers. Contact us and our team of experts will help you to improve the shopping experience in your points of sale.