By Ben Morgan, Accenture New Zealand managing director
As Kiwi retailers awaken from their lockdowns, customer insight will be the new king to thrive in a retail world dominated by digital commerce.
Retail’s holy grail is customer insight that is timely, accurate and can predict how customers will behave. In a landscape that is changing fast, New Zealand’s leading brands are those that can identify their highest value customers and understand how to turn them into life-long advocates.
With that in mind, it’s not surprising that retailers are focused on accumulating new data and insights. Seasonal events, such as Christmas, new year and end of seasons sales are marked by increased clicks and footfall, a flurry of digital activity, creating a wealth of customer data. In principle, this data helps retailers find patterns among their highest value customers and is an asset for its ability to enhance day-to-day customer interactions.
During this pandemic, a recent Accenture survey found that digital ecommerce is expected to increase by 160% in ecommerce purchases from new or low frequency users.
However, the sheer volume of data available can quickly become overwhelming and difficult to manage. For good reason, we are seeing automated real-time decision-making growing in popularity across New Zealand retail industry. By automating the heavy lifting, retailers can segment and target their customers more accurately than ever before.
And so, as they gather customer data – while adopting the tools they need to make that data more accessible – how can retailers unlock new value during a Covid-19 recovery and indeed beyond?
Find the flavour of your superfans
Some of the most valuable insight for retailers are those which paint a picture of their superfans – how they behave and what they want from their most trusted brands. First, this means differentiating between the types of customers that interact with your brand – financial superfans that show their loyalty by spending money, and social superfans that advocate your brand among their network.
To find their financial superfans, retailers can analyse traditional metrics like regularity of spend and the ratio between paying full price and buying at discount. Meanwhile, social superfans can be found by analysing social media conversations and sentiment, online product reviews and shared posts.
By delving into the data generated by these interactions, brands can understand what products their superfans feel most strongly about, which channels they feel most at home in, and how they respond to specific promotions and outreach. For example, Domino’s New Zealand took on board their customer’s number one compliant – that their pizzas don’t arrive looking as they should. In response, Domino’s created the DOM Pizza Checker which utilises AI and machine learning to ensure every pizza is made to quality standards.
If retailers can employ automation and intelligent data collection, they can act before their competitors – bringing rewards for both brands and their customers.
Innovate your outreach
Simply knowing the who, what and where of your brand’s superfans is no longer enough: brands need to cultivate and nurture them. One way of doing this is to consider how they reward loyal customers. If they “get” customers on a deep personal level, then traditional methods – such as a points-based loyalty programme may start to seem unambitious.
The Body Shop’s Love Your Body Club allows customers to not only earn points and enjoy personal rewards but offers them the opportunity to donate their loyalty rewards to charity – aligning their brand values directly with their customers.
Some brands such as ASOS are also rolling out innovative new digital experiences, for example, notifying loyal customers through apps and updating them when certain products become available or are on sale. The Z Energy mobile app allows customers to open a virtual tank which can store up to 1,000 litres of fuel. When topping up, the app provides customers with the lowest pump price within a 30km radius, letting them take advantage of lower pump prices. Customers benefit from being able to fill up in their own time and at a lower price. In turn, the retailer gathers new insight into purchasing behaviour.
Look to the next generation
Thanks to the internet, retail today never sleeps. The most influential customers of tomorrow are already interacting with brands and are steadily growing in spending power. The logical step beyond nurturing existing superfans is to start looking for the next generation and asking how your brand could be relevant to their needs. Having an effective presence on social media with a distinctive tone and personality is an important means of achieving this.
Moreover, if retailers can understand their superfans in depth, and anticipate how they will behave and respond, they can use social media and digital profiling to find similar customers that don’t currently have a relationship with the brand but may be open to having one tomorrow. Likewise, brands can also look for occasional or moderate fans among their customer base and seek ways of turning them into superfans.
The future has already happened
Even prior to Covid-19, most retailers are still getting to grips with customer data and the opportunities that it presents for their profitability.
There is still a lot of work for brands to achieve sophistication, but also no time to wait. Gathering the data is the relatively easy part – the real challenge is being able to analyse that data rapidly and translate it into “human-friendly” insights.
The hard work is certainly worthwhile. By uncovering customer insights, brands can orient their offerings around superfans with the greatest lifetime potential and pursue segments where similar customers can be found.
As New Zealand retailers look to thrive in this new trading environment, they should ask whether their competitors could already be one step ahead.