If you’re a retailer who sells tech products, or apparel, or footwear, you may have noticed a shift in online versus in-store sales of certain items Maybe you’ve seen your best customers suddenly start to fall off. Have they lost interest in that product or a particular brand that you carry?
The greater likelihood is that they’re buying it, or something like it, elsewhere—either from an online competitor, or from the brand itself. How can retailers identify these shifts, and what can they do to get their fair share of loyal customers?
We’ve been looking at differences in customer behavior between online and the physical store through our receipt-based Checkout e-commerce data, and have spotted an increase in online spend per buyer. We have identified the heaviest buyers through both purchase frequency and overall spend; and have investigated whether these valuable customers are loyal to a retailer, a brand, or both.
If you understand what’s behind the behaviors of these buyers, you can gain insight into what attracts this segment. Knowing what motivates the heaviest buyers can help drive strategies to attract a new segment of purchasers. Why is this critical set of customers migrating their spending to online in traditional categories, and how do you ensure that they think of you first as they shift channels? Armed with the hows and whys, you can identify the best triggers to pull.
In the tech sector, it’s crystal clear that the heavy buyer is an affluent older male who simply can’t own enough gadgets. This type of demographic data can inform a tech retailer’s strategy, but it’s by no means exclusive to traditional consumer technology. We’re seeing similar trends in apparel, housewares, and home security. Across categories, there’s an increase in the number of brands, some of which you may carry, and others you may not. Even more of a threat, we’re seeing the brands that you carry behaving almost like your competitors, selling direct to the customer from their online sites.
This is a big, new and highly quantifiable trend, and it puts your retail presence at risk of becoming less relevant, whether brick-and-mortar or online. It’s not something you can ignore. So we’ve set out to understand how your customers are buying by analyzing purchase data: Who is doing the buying directly from these brands, and why might that be?
Every retailer should be asking, What are the “hot” products that I should start carrying? Where should I leverage the power of the in-store experience with a demo? What are my strengths as a retail brand that I can carry over from my physical stores to my e-commerce presence?
Some of these questions can be answered by using data to understand both your existing loyal customer base and the customers you don’t yet have, and being able to see what they’ve actually purchased. You can also suss out what your existing customers are buying, albeit not from you.
Armed with these key information points, you can more accurately merchandise and curate to target your customers and competition. We’ve seen the old-fashioned art of merchandising—of intuiting that one product the customer never thought she needed—go somewhat by the wayside. Now, that uncanny skill can be supercharged by data that looks at what your own customers are purchasing elsewhere.
Central to this exploration is the fact that a brand that you carry can become your competition as a direct seller to your consumer. And you, as the retailer, have the opportunity to become a master of curation and showcase your knowledge of what’s hot and fresh, in-store as well as online.
Merchandisers need to constantly refresh on what they should be carrying—and then it becomes a question of curation, stocking, and discovery. So while we may be seeing brands gaining more power online, and to some extent eroding your brand loyalty, you can take steps to make your site, or your physical store, the preferred “site” once again.
And to get you there, the right data will carry you a long way.