In QuickPivot’s 15+ years of existence, one truth that we’ve come to realize is that an impenetrable knowledge and understanding of customer behavior is at the center of every successful brand. It’s only when you have the knowledge of who your customers really are, that you’re able to demonstrate why shopping with you is in their best interest. Although many brands have known this for a while and have been making incremental changes, in a COVID-19 world, effective customer targeting and engagement are essential for brand survival right now.
Enter customer data segmentation. Every brand that aspires to build equity and market share needs to have an agile customer segmentation strategy, and technology that allows them to adjust on the fly. There is too much unknown in the world right now develop marketing plans that are set in stone and require heavy lifting to change or undo. For context, let’s examine the ways the retail industry has been rocked by COVID-19 and how consumer preferences have shifted over the last six months.Enter customer data segmentation. Every brand that aspires to build equity and market share should have a customer segmentation strategy in place to build and manage customer loyalty and increase return on investment. Let’s look at how consumer preferences have shifted over the last six months and why you need a segmentation strategy in order to properly respond.
COVID-19 has caused unprecedented disruption to retail brands
Supply chains have been disrupted. Thousands of businesses have shut down this year. Consumers have shifted from in-store buying to online buying. Overall demand has fallen, and consumer buying has shifted toward items like groceries and household goods, home entertainment, and home improvement and away from items like fashion, luxury goods, and travel. A June 2020 survey by Advantage Solutions of pandemic-related changes in US retail behavior found that:
- Out-of-stock items and switches in retail locations caused 55% of shoppers to stray from their preferred brands
- 28% of shoppers said expected to keep buying from those new brands
- 15% of shoppers said they would make more than half of their purchases online in the future
While it’s certainly possible that consumers will return to their pre-pandemic shopping patterns, the majority of industry experts say that COVID-19 will have long-lasting or permanent effects on consumer behavior. A recent McKinsey study predicts that “consumer behaviors are settling into a new normal” including a shift to “value and essentials” and a “flight to digital and omnichannel” shopping.
This means that it’s vital for marketers to keep a closer eye on customer data and analytics than ever before. Questions to investigate include:
- Who have been your best customers since March?
- What cohorts have dropped off and need to be re-engaged?
- Are certain product categories performing better than others?
- Are there products that were previously unavailable to due to supply chain issues that need to be promoted now
A customer data platform (CDP) such as QuickPivot can ingest product and promotion history data, providing marketers with a single platform to analyze the most important data sets.
How can brands engage customers in an environment with so much uncertainty?
Customer data segmentation is important during ordinary times, but even more so during challenging times like the one faced by retailers today. Now more than ever, it's critical that brands possess a firm knowledge of the demographics, preferences and behaviors of their customers. For example, given the current differential in virus transmission rates across different regions of the US, brands need to consider how to use that information to sell successfully in particular states or regions.
Without the right technology in place, this type of segmentation can get cumbersome quickly. While a Bain & Company survey about the use of customer segmentation as a marketing tactic found that 81% of marketers said it was a critical tool for growing profits, fewer than 25% believed their companies used it effectively.
Advanced customer segmentation allows you to develop the right approach and right messages that take current pandemic issues and requirements into account, as well as prepare for post-pandemic shopping pattern shifts. This will help define your brand as flexible and truly responsive toward customer needs.
How a CDP facilitates effective customer data segmentation
CDPs, including QuickPivot, are designed to integrate with existing systems and bring all kinds of customer data (behavioral, demographic, etc.) together in one place to provide a unified view of your customers. With QuickPivot, marketers can quickly and easily analyze their data to identify behavioral patterns and trends and use this information to influence the offers sent to these customers.
With QuickPivot, marketers can quickly and easily add new segmentation data sources, typically with no coding knowledge required. Marketers can run real-time queries to analyze and create smarter customer segments, thereby accelerating data discovery and enabling 1:1 marketing. And when marketers can see how their customers' needs have shifted, they can refocus their marketing efforts to reflect the changing environment.
Do you have the right tools in place to really know your customers’ needs, wants, and preferences? QuickPivot can provide a single, unified view of your customers, keep customer records up to date as new data becomes available, and allow for delivery of relevant offers and messages by customer segment. Now's the time to look at a CDP for your organization, so let’s start a conversation today.