POST-PANDEMIC TARGETING ☛ WEB VERSION: Click Here
Piecing together post-pandemic customer segments
By Beth Powell, managing director at Go Inspire Insight A
s retailers work to recover revenue following lockdown,
they must not rely on past models and assumptions when formulating new marketing strategies. Shopping behaviour has changed significantly, and will continue to evolve in both the short and long- term. In these unstable circumstances, marketers will need to frequently review their approach to customer relationship management, and adjust to new developments. However, any shift in strategy must be accompanied by a thorough understanding of how segments within the customer base have evolved as a result of the pandemic. Identifying new behavioural profiles is critical to ensure that budgets are deployed where they are most needed, and where they can be most effective.
Changed habits A particular source of concern is how existing customers have changed their shopping habits. At Go Inspire Insight, we began assessing customer purchasing early on during the lockdown. We analysed the behaviours of a pool of five million customers, in partnership with multichannel businesses that temporarily closed their physical stores. We found that
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existing customers tended to fall into three categories. The first category, which we named Loyal Stalwarts, continued to spend despite some unevenness of basket mix. The second category (Grown Apart) spent less, and though some of their store spend migrated online, it was not enough to compensate for the downturn. The final group, Trial Separation, refers to in-store customers who didn’t switch to online, and stopped spending completely.
Retailers must now intelligently re-establish relationships with these customers based on their ‘new normal’ profiles. Previous in- store devotees tend to be high- value high-loyalty customers, so regaining their attention is a matter of urgency. Going beyond promotions and incentives, retailers may need to offer a new type of customer journey, and adapt to changed priorities. For instance, one retailer’s post-pandemic offering includes personal after- hours shopping trips, online beauty appointments and entertainment for queuers. Marketers should also keep an eye on footfall to sales conversion now that stores have reopened. Though fewer customers may be coming in- store, it is likely that a higher
percentage are ‘on a mission’ to buy, rather than simply window-shopping. In short, 50% lower footfall may not mean 50% lower sales.
New beginnings New customers must likewise be assessed for future potential. As consumers spent more time online during lockdown or shopped for different things – home and garden renovations were a notable trend, for instance – they discovered new brands. However, since new recruits may not deliver the same value as previously established customers, businesses must be careful not to waste resources. Marketers should not rush to offer discounts to newcomers without distinguishing between those in the Marriage of Convenience segment, and those who are Chance Lovers. Shoppers in the former category may leave after taking advantage of offers, while shoppers in the latter segment are high spenders who may continue spending in the long-term if properly nurtured.
Familiar faces This is not to say that all new customer segments will be unfamiliar. Go Inspire Insight’s analysis identified new customers with the
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