Online businesses have always had the upper hand when it comes to leveraging and activating rich customer data for targeted digital marketing that drives growth. And with the ongoing pandemic, they’re also enjoying a healthy surge in consumer spending.
Brick-and-mortar businesses, for their part, face tremendous uncertainty with each emerging variant as they continue to adapt to staff shortages, turnover, capacity restrictions and in some cases store closures—all while competing with their online counterparts. Moving forward, one thing is for sure: changing consumer behaviors are the only constant.
All is not lost: by harnessing lessons learned two years into the pandemic, retailers can make key MarTech upgrades and refine their targeting strategies to increase their competitive edge. Let’s review.
Lesson 1: Digital rules the landscape
Not surprisingly, when it comes to ecommerce, the arrival of COVID-19 converted in-person holdouts to the contactless benefits of online shopping. According to Forrester, 60% of U.S. adults with online access made their first online transactions during the pandemic.
But shopping isn’t the only place where digital adoption has spiked. Consumers have sought out digital platforms for a variety of day-to-day needs.
Where are consumers going digital?
- Shopping
- Entertainment
- Financial services
- Education
(Swiss Re Institute)
Additionally, omnichannel spending increased more than 70% year over year in Q1 2021 for restaurant, retail and grocery (Fiserv). And with those new online behaviors come higher expectations: six in 10 US consumers expect companies to have strong enough digital resources and capabilities to withstand future global disruptions.
So should brick-and-mortar retailers pack it in and move to ecommerce? No, but digital capabilities that bring you closer to customers and ensure a predictable, delightful experience will help strengthen competitive advantage.
In light of these new digital behaviors and expectations, where should brick-and-mortar retailers focus their attention?
Targeting capabilities: Take a test-and-learn approach and tweak campaign audiences faster with a MarTech stack that includes easy-to-use, personalized omnichannel marketing capabilities.
Omnichannel offers: Connect on- and offline experiences—for example, with online offers redeemable in-store—to address changing consumer shopping habits.
SKU-level analysis: Make informed decisions about product and service offerings using aggregated product and shopping data and a SKU-level analysis of purchase behaviors.
Lesson 2: Loyalty, frequency and basket size are up for grabs
As discretionary spending remains in flux, it’s more vital than ever to make sure to maximize share of wallet and nurture loyalty with new and existing customers. A recent study by McKinsey notes an overall increase in basket size and preference for trusted brands – along with a shift to stores located closer to home.
As a result, retailers across verticals must be aware that their core customers may have shifted significantly in the last two years, along with their in-category share as compared to competitors.
On the whole, consumer spending behavior has become more:
Value-based
Consumers are being more mindful about their dollars and looking for maximum benefit on every dollar spent.
How can you deliver more value with every purchase?
Experimental
In the wake of disruption, consumers are exploring new purchasing patterns—meaning their loyalty is in flux.
Are you welcoming new customers while finding ways to re-engage lapsed ones?
Local
Consumers want locally sourced products from stores directly in their communities (Accenture).
How can you personalize online and in-store experience according to customer preference?
Lesson 3: You’ve got to know your customers (and win them back)
In order to compete with ecommerce giants and adapt to changing consumer behaviors, retailers, restaurants and CPG companies need to understand their customers at a much deeper level than before to reach them wherever they are in the sales journey. And trends in customer behaviors pre-COVID no longer provide a reliable basis for a resilient marketing and sales strategy.
For example, a national fast casual restaurant chain found that they had seen a shift in the makeup of their base—losing previously active customers and gaining new ones—since the pandemic began.
Here’s the good news: with major shifts in consumer behavior come new targeting opportunities. Across verticals, retailers who look closer at their data are noticing a shift in the makeup of who their core customers are—and that knowledge is power. Once you understand your new base, you can better engage them while retargeting lapsed or infrequent customers.
But do you have the tech?
Understanding your new customer makeup and launching refined strategies both start with the right data. But do you have it? If you’re relying on data that unlocks details on loyal customers, whether pre-pandemic or current, you only have half the picture (at best).
Consider the following:
- What % of your total customer base participates in your loyalty program?
- What about unknown customers—those that don’t opt in to loyalty?
- Do you have mechanisms in place to identify and understand them?
- Do you know what in-store customers are buying, when and with what frequency?
First party data, while a good start, won’t get you all the way there. With the right customer data platform (CDP), you can enhance and enrich your existing customer data to activate the right audiences, make relevant offers to them via online channels and measure performance.
A good CDP should be able to integrate seamlessly and effortlessly with your existing tech stack and ingest data from disparate sources to give you more visibility into your customer data pool.
Start today with Bridg
We help brick-and-mortar retailers identify and understand unknown customers, enhance data on known customers, gain operational insights and deliver more effective, targeted marketing engagements. Let’s connect on how we can help you build anonymous, privacy-safe profiles with SKU-level purchase history and hundreds of enriching customer attributes to power analytics and marketing.
Want to learn more about the power of point-of-sale (POS) data for identifying unknown in-store customers and scaling your loyalty program? Check out our whitepaper here.
Have more questions for us and want to talk? Connect with us today!
