As the economic climate becomes increasingly volatile, more focus has been placed on the consumer. Customers are what keep brands afloat and their behavior can make or break a business. This has always been true, but as we continue to face more uncertainty, many companies are starting to shift their strategies to place more of a focus on customer loyalty.
Emarys.com reports that “loyal customers spend 67 percent more on products and services than new customers. So, even though your most loyal customers might only make up 20 percent of your audience, they provide up to 80 percent of the revenue.” While most brands tend to spend their marketing dollars on attracting new customers, it’s becoming increasingly clear that perhaps they should be focusing their efforts more on the customers they already have. But, of course, that’s easier said than done.
So many brands struggle with how to maintain customer loyalty. It can be an incredibly difficult and complex process — especially as trends and expectations are constantly changing — and facing an oversaturated market certainly doesn’t help. These days, stores have to stand out in order to stay relevant. Customers’ attention spans continue to get shorter and if they’re not getting what they need at one store, they have no problem going to another. And who can blame them? We’ve all experienced that frustrating feeling of going to a store with something specific in mind, only to find that the item is sold out or entirely unavailable. Most of the time, especially if you’re in a rush, you’ll just head to the next location where you know you can find what you need. This is where personalization comes in.
As we look ahead to the rest of the year, the brands that are more likely to experience higher revenue are the ones that take a strategic, focused approach to personalization. But what does this mean exactly? “It’s not just about displaying customers’ names in emails and texts anymore. Now, personalization is about profiling shoppers based on preferences — i.e., personalizing shopping experiences using search history, age, location, likes, height, etc.” (Forbes) This is already being utilized across e-commerce, but can it be applied in-store? The answer is yes, and technology plays a huge role.
We now have the ability to gain access to important insight about customer behavior — specifically how customers interact with merchandise. Having the answers to questions like, “Is the merchandise moving in the store? Is it being tried on and then abandoned? Tried on and purchased? Not being tried on at all?” is incredibly important to understanding buyer behavior and creating a successful retail business.
Fortunately, these questions can be answered by implementing technology that specifically tracks customer behavior. Tracking customer behavior allows retailers to better understand what products are resonating with their audience. It also ensures they have the right amount of popular inventory in-store instead of being overstocked with products that aren’t selling. If someone constantly goes into a store that doesn’t carry their size, or is met with styles that aren’t really considered “on trend” wherever they live, it’s more than likely that they won’t return.
However, all of this changes if a store takes time to meet its customers where they are, if they can see on the local level what their customers want. As we continue to navigate this uncertainty, businesses must put their customers and their specific needs are at the forefront.
Ronit Eliav is the chief marketing officer of Nexite, a connected merchandise platform.
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