Imagine if, a decade ago, your retail business could have seen how and where consumers were adopting e-commerce. Imagine if you could have observed how adoption patterns differed by age group and by location.
And imagine if you had had access to all this data in real time.
You could have made informed decisions to optimize your supply chain, improve delivery times, choose the best bricks-and-mortar locations and more.
In short, you could have seen the future of retail and adapted ahead of your competition.
Of course, a decade ago, the real-time data needed to give you that vision wasn’t available.
It is now, though. And your business needs to harness it to stay competitive.
Follow the customer transaction data
The key to seeing where retail is headed — and how your business should adjust — lies in customer transaction data.
Industry giants are swallowing more and more of the retail market. One big reason? They invest heavily in data and analytics.
Your company might not have the resources of an Amazon or a Walmart to build massive data teams. But by using consumer transaction data, you can avoid falling behind.
“Transaction data lets retail’s Davids take on the Goliaths,” says Jonathan Chin, the head of growth and strategy at Facteus.
Retailers that rely on their own customer data have “only a keyhole view of consumer behavior,” Chin explains. “But now you can analyze consumer data from well over 100 million credit and debit cards. In real time, you see spending trends, how your competitors are performing, where else your customers buy and how the consumer economy is doing. You can break down spending by income, by age and by region, state, or even city.”
Put another way: To know where your business needs to go, follow the customer transaction data.
Gen Z and TikTok: exclusive sales numbers
Let’s look at an example that occupies the attention of retailers everywhere: Gen Z consumers.
It’s no secret that social media matters immensely for these digital natives. Indeed, 85% of Gen Zers say social media influences their buying decisions.
But consumer transaction data shows you that social media doesn’t merely “influence” purchasing choices. Young people are buying directly through social media at skyrocketing rates.
Take TikTok, which has more than 150 million users in the United States, nearly half of them under the age of 24. Gen Zers say TikTok is the number-one place where they discover new brands. They even use TikTok more than Google to search for products online.
Little wonder, then, that Gen Z consumers have flocked to TikTok Shop. This e-commerce feature officially launched in September 2023, after almost a year of testing. Back in September 2021, the platform had begun a pilot program allowing certain Shopify merchants to sell directly.
How quickly are consumers adopting TikTok Shop? Facteus made customer transaction data available for this article. Consumer spending shot up across the whole population as soon as TikTok Shop had its full rollout.
But pay special attention to the line for Gen Z in the graph below. It spikes nearly off the chart.
“You can see right away that Gen Z is jumping on this platform much faster than any other generation,” Chin says. “We indexed monthly TikTok spending to September 2021 levels, reflecting when TikTok broke into shopping. By November 2023, only two months after TikTok Shop launched, Gen Z’s monthly spending had shot up nearly 200%. We’re talking huge numbers already.”
Indeed, TikTok Shop produced an estimated $260 million in sales in October 2023. That implies annual sales revenue of more than $3 billion. And of course October’s TikTok sales paled in comparison to the following month’s.
A wealth of insights
This is the kind of granular insight that consumer transaction data gives you. Retailers looking to reach Gen Z consumers typically receive vague advice, such as Tie together the online and in-store shopping experience. It’s difficult to know what actions to take or how to measure success.
By contrast, customer transaction data gives your business clear goals to aim for. You don’t need to resort to murky edicts like We need to increase our social media presence. Once you see Gen Z’s soaring TikTok purchases, your objective becomes much more precise. Then you can identify the steps to meet that goal and establish KPIs.
There’s no limit to the insights your business can derive from customer transaction data. Chin gives a few examples from among the countless options:
- You can see in real time how your business is doing in relation to competitors. If you’re Chipotle, you can compare your sales to Panera Bread’s. If you’re Walmart, you can check your sales versus Amazon’s.
- You can even see what your own customers spend at your competitors. If you have a coffee chain, for example, you can look at your customers’ spending at Starbucks. You can track whether you are gaining or losing wallet share month to month, or region by region, or among certain demographics.
- Do you want to know where customers go before or after they shop at Target? No problem. You can find out what restaurants and stores they go to, even where they get gas.
- You no longer need to wait to see Black Friday sales results. With only a one-day lag, you can check year-over-year growth, particular retailers’ results, sales by age group or region, online versus in-store sales and more.
It’s no accident that leading publications like the New York Times and the Wall Street Journal turn to Facteus for insights into the state of retail.
If you want to know the future of retail — and ensure your business’s place in it — you should leverage consumer transaction data, too.
“]]
View Original Article
