Consumers’ grocery shopping patterns are quickly evolving as just-in-time shopping is becoming the norm, according to “The Omnichannel Journey: Translating Big Data into a Prescription for Growth.”
Since there are more places to shop and more products to choose from than ever before, Chicago-based IRI’s Times & Trends Report takes a closer look at how retailers can find true organic growth by maximizing the value of their current shoppers in today’s fragmented marketplace.
Quick trips—those “I need it now” grocery excursions—account for two-thirds of shopping visits and one-third of grocery expenditures. And, these trips are not made at one store or even one channel. In fact, there is a major shift in how consumers are approaching grocery shopping, because they are spreading their money across more channels and formats as they shop to fulfill their needs.
“Retailers are grappling to not only understand consumers’ varied shopping patterns, but also capture shares of their increasingly fragmented shopping trips,” says Susan Viamari, vice president of thought leadership. “Retailers really need a clear 360-degree view of shopper spending to grow. This perspective will help them know what their key and target shoppers are looking for, so they can engage the shopper where, when and how it matters most to them. Those retailers that can personalize the shopping experience move their customers up the loyalty ladder, increasing the lifetime value of those customers and supporting growth along the way.”
Steps to success
Industry experts estimate that it costs anywhere from 5-25 times more to acquire a new customer than it does to retain an old one. With this in mind, IRI encourages retailers to follow four steps to maximize the value of each and every one of those customers and capture share: 1) Reward current customers.
2) Grow current customers.
3) Activate new shoppers.
4) Reactivate customers that have lapsed.
Since attracting new customers is expensive, the key to success for retailers is to get the most out of their current customers, rather than just focusing on attracting new customers to minimize costs.
Maximizing customer loyalty begins with understanding high-value customers and assessing their level of loyalty. And, to move customers up the loyalty ladder and even acquire new customers, retailers need to shift from the standard category management perspective to a customer management perspective.
Loyalty programs are flush with information about members—from category and brand preferences to price and promotion sensitivity. This information is essential to developing programs that target and resonate with a retailer’s best customers.
Personalization begins with knowing the shopper
Personalization will be the crux of future retail success. This does not mean retailers should abandon mass-marketing programs. Rather, the future will be about supplementing mass efforts with targeted programs aimed at deepening a customer’s relationship with a retailer. Getting this right means that retailers need to know their customers inside-out, so they have the right marketing programs, the right products and assortments with the right prices and marketing messages aimed at positively influencing customer loyalty and driving activation.
Targeting these high-value and potential customers is not easy. Traditional scanner and demographic data and frequent shopper program data provide some visibility into important shopper attitudes and behaviors. However, this does not provide the all-important 360-degree view of shopping and spending habits or visibility into rest of market and national coverage.
“The path to purchase has become a maze of twists and turns, with thousands of points of interaction along the way,” adds Viamari. “Retailers need to harness the vast sea of big data around shopper attitudes and behaviors, and bring it together in integrated and real-time fashion. Only then will they understand what is moving the needle today, and predict and prepare for what tomorrow will bring, so that they can consistently serve their customers in a highly personalized and engaging fashion.”