In today’s rapidly changing consumer landscape, companies have to be relentless in staying relevant in order to connect with shoppers, develop stronger brand loyalty, and maintain or capture market share.
This is especially true as traditional retail and consumer packaged goods companies experience slower sales growth. Brick-and-mortar retailers are facing a significant shift in marketplace dynamics, as store closings reach an all-time high and consumers migrate to e-commerce. Retailers and manufacturers need to find new ways to fight for and win a bigger piece of the pie.
For years retailers have relied on traditional shopper insights to target their best customers, focusing solely on data from their own stores. But that’s no longer enough. Retailers are increasingly recognizing the importance of finding ways to target the market’s highest-value customers, who may or may not currently shop their banner. To grow the share of spending from these high-value customers, retailers must first identify them, then understand where there are gaps and growth opportunities, and launch campaigns that target the desired audience.
The first and most difficult step requires identifying this group of high-value customers. Although most retailers know about spending in their own stores, they don’t have a good grasp of customers’ spending elsewhere. Having a 360-degree view of consumer spending is critical to winning in today’s environment, and retailers have been investing in new technology and analytics that provide deeper, richer data and insights across the total market space.
Although most retailers know about spending in their own stores, they don’t have a good grasp of customers’ spending elsewhere.
Next, retailers need to mine hidden opportunities to grow their business across these market spenders. This requires understanding what’s driving consumer purchase behavior through granular insights and assessments. Measuring shopper mix (how well retailers attract the highest-value households into their stores) and wallet share index (how well the store captures that spending compared with other stores) can also illuminate growth opportunities.
Finally, retailers can use the same vast data to support the planning of integrated advertising and promotional campaigns that are precisely tailored to high-value customers. Retailers must also ensure that these personalized campaigns are working. Data can show when they are—and when they aren’t. Data also provides opportunities for mid-campaign course correction, enhancing shopper impact and, ultimately, boosting return on investment.
Consumer market dynamics are shifting and in order to keep up, retailers need to find new ways of identifying and targeting the best possible customers. Thankfully, they’re not alone in that quest—there’s data to help at every stage of the process.
This edition of Quick Takes originally appeared in the January/February 2018 issue of Middle Market Growth. Find it in the MMG archive.
Andrew Appel is president and CEO of IRI, a provider of innovative solutions and services for consumer, retail and media companies.