Agile not fragile: Checking out the new retail landscape

Beth TaitMost businesses in the retail and ecommerce sector are seeking maps to navigate the new landscape, with new types of customers coming through their (virtual or physically distanced) doors; existing customers who have left or changed how they shop; and existing customers demanding new levels or types of interaction.

To succeed in this era, brands must understand these new customer behaviours, and quickly funnel them into their own segmentation strategies. Brands may not necessarily need to discard everything they previously knew, but they do need to question it.

Seven new customer segments for our times
Earlier this year, Go Inspire Insight worked with a selection of clients to analyse the changing behaviour of 5 million customers. The study looked at the immediate consequences of the pandemic on consumer behaviour, and at the emerging segments that could crystallise for retailers.

Seven broad customer clusters were evident across the study, along with a raft of insights that highlight the value of being smarter about data and analytics:

Loyal Stalwarts: these existing customers carried on spending at the same level in lockdown and beyond, altering only their basket mix.

Grown Apart: this cluster of existing customers continued to spend, but at a reduced level, with some (but not enough) store spend migrating online.

Trial Separation: this segment did not make the switch from store to online, and stopped spending. With Trial Separators accounting for 50% of revenue for many retailers, it’s important to prevent the trial separation becoming permanent, and intelligent re-engagement is critical.

Marriage of Convenience: a potentially distracting segment of new customers who bought during the pandemic but may be one-trick ponies. It would be ill-advised to prioritise them at the expense of the Trial Separation segment.

Chance Lovers: having bought twice or more in the pandemic and spent relatively highly, these new customers offer longer-term potential. It could be worthwhile encouraging them into a loyalty programme.

My Usual Type: new customers who fit the expected pre-pandemic profile. They can be nurtured along a traditional customer journey – with the proviso that new learnings may be necessary along the way.

Together Again: reactivated lapsed customers who returned to a trusted retail brand in lockdown and could be welcomed back with rewards for incremental spend.

So, what are the next steps for marketers?

– Relate to them by carrying out bespoke customer analysis using lockdown and post-lockdown data, and sifting your own ‘Marriages of Convenience’ from your ‘Chance Lovers’ and ‘Trial Separations’

– Use that analysis to adjust your segmentation strategy and customer journeys

– Repeat steps 1 and 2 regularly.

The one thing we all know about the new normal is that it’s not yet fixed. We all need to stay agile to succeed.

Beth Tait is managing director at Go Inspire Insight

 

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