Consumer centricity: Understanding your customer through data
Creating meaningful experiences and building lasting relationships with your customers is a critical part of retailing. To do this successfully, you must be able to understand and anticipate their wants, needs and how to communicate effectively with them. Whilst retailers have collected this information for decades, many aren't sure how to draw critical insights from it. Customer expectations for a more connected and personalised shopping journey are accelerating. The businesses that leverage customer data effectively to meet those expectations will continue to secure market share.
Investing in CRM solutions to support data analysis
Customer data can give companies the insight that they need to fully understand their customer but to access this you need the right tools and technologies. CRM solutions can aid with data analysis and interpretation and we've seen more and more companies investing in this technology, so it's no surprise that the industry is expected to grow at a rate of 14% between 2021 and 2027.
Leveraging AI for improved insights
Companies are also starting to embed AI into their CRM strategies to unlock deeper insights into customer behaviour. We see companies starting to think more about the customer groups when planning and AI can help to do this based on various key factors including;
Profitability - a single brand or product will never appeal to everybody. Companies must consider what customer groups are most profitable to the business and focus on understanding those customers' wants and needs.
Demand - companies can analyse basket data to understand more about what the customer likes and dislikes, and changes in demand can also be flagged. This data can then be used to help curate a new, improved range for the season.
Product reviews - data doesn’t have to be just numerical basket data, reviews are extremely useful in helping companies understand how they can improve the customer offering and experience.
Excelling at personalisation
The need for unique, targeted marketing continues to grow alongside customer expectations for more personalised shopping experiences. Using data, companies can target customers with unique offers and incentives to buy throughout their shopping journey. Product recommendations, personalised offers and abandoned cart discounts are all great examples of how to retain customers based on data insights.
By 2023, the global revenue of customer experience personalisation and optimisation software is projected to surpass $9 billion.
Companies leveraging customer data to create effective personalisation strategies are positioning themselves as market leaders for the future.
Consumer centricity is fundamental to retail
Retailing has always been about the customer. Today, there is a powerful opportunity to connect with them in new and advanced ways. Most retailers have decades of customer data at their fingertips and, luckily, technological advancements have made it possible to unlock key insights to vastly improve range planning, pricing and marketing strategies. Whilst this year poses uncertain economic challenges, those leveraging customer data effectively have the best chance of thriving.
This article is part of our 2023 "Crystal Ball" Trend Predictions report. Download the report here and discover more exciting topics we'll be exploring throughout the year!