“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity…”
– Charles Dickens
Understanding customer profiles, their drivers and sentiment during times of dramatic change is of vital importance for all retailers and brands.
Because just as change affects us so dramatically in times like this, so too does it affect our customers.
We need to listen to how our customers’ behaviours are changing so we can plan future strategies and be ready for the rebound that will happen.
From unsure and uncertainty through to familiarity and certainty in the norms of behaviour that existed before.
To gain these customer insights in these uncertain times, Retail Doctor Group partnered with Lightspeed to reach out to Australian consumers to understand how COVID-19 is affecting their behaviours and their spending patterns.
This data allows retailers to clearly predict how customers will react during this time, which customers are most affected and which verticals this will have an impact on.
We must remember that not all customers are equal and it is important to utilise this consumer sentiment data along with your customer insights to have a clear understanding of where to aim your strategy to gain the most connection and penetration with your customers as they return to patterns of familiarity.
The first insights from the data was to see that 53% of Australian consumers are saying that their income has not been affected during this period. This is a positive light for retailers as this shows that consumer spending should normalise quite quickly during this period when customers establish their routine.
Conversely, when we look deeper into this data we can see that those most affected are younger consumers (Between 18-35) and females . So what does this mean?
Retailers who have key customer demographics in these areas may notice the change in behaviour and reduced spending during this period. However, by understanding the drivers for these consumer profiles we can then begin to tailor communications, offers and products to be able to support these customer groups.
It is important to think about the rebound, how your customers will react when this is over and utilise this time to plan your rebound strategy.
Keeping close to your customers during this period by being supporting, informative and addressing their needs will allow for a strong connection and loyal customers. In my previous blog we discussed that all customers respond to crisis in different ways and it is therefore important to tailor messages, platforms and offers to connect with your customers on an emotional level.
Are there differences in attitude to demographics?
This data also shows us that metro areas are more affected than regional. With 73% of regional consumers saying that their income has either not been affected or has increased. So retailers should be aware of utilising different messaging to these consumers who will be looking for different solutions during this time.
Less or more to spend?
We then asked consumers how they expect their spending to change over the next 4 weeks by category. From this we can see that groceries, pantry items and hobbies were least affected.
By understanding what categories consumers are considering spending in can be utilised to determine what mix of products and services you can offer and highlight in communications to assist in delivering what your customers need.
This research also shows how customers are changing their behaviours in the way they interact with retailers.
In all categories, customers are now looking for the ability to purchase online so it is important to revisit your current path to purchase for your customers.
How they want to interact with you and what channels they want to utilise changes what you need to do to your omni-channel strategy to ensure it can deliver to these expectations.
Due to social distancing, we are now seeing customers become more digital-savvy and therefore will have higher expectations for how they interact with retailers. A thorough review is necessary to understand what your customers are expecting versus what you are delivering to them on their journey with you.
This research highlights the importance of understanding your customers’ behaviours while also coupling this with “why” they are behaving this way. By developing this understanding you can tailor your offering, your strategy for rebound and create stronger connections with your customers that will lead to long-term loyalty.
First published in Inside Retail on the 8/4/2020
To understand your consumers in detail, their emotions and why they behave the way they do email firstname.lastname@example.org