The corona virus pandemic ushered in a new reality and it is increasingly becoming clear that these changes will persist for a prolonged time. Consumer behaviour has seen radical changes (e.g. hoarding of essentials) and people are finding new ways to meet their needs.
Customers are looking for a genuinely emphatic connection while having to come to terms with the 1,5-metre-economy. This poses a conundrum for Retailers. Having had to close their stores, they are missing out on valuable customer contact. Moreover, there is no historic data or experience with this unprecedented crisis. Understanding customer needs and behavior that has radically (and instantly) changed is not easy.
Historically, shopping in stores is the ultimate way to create an intimate and personal connection with customers. Due to corona, online is rapidly becoming the starting point for customer journeys, even in areas where this did not seem obvious before. New solutions need to be found to address the missing personal offline touch.
One success story of customer intimacy is Chinese department store Intime. They developed a new way to connect customers with their brands during the Corona lockdown by offering livestreams to provide personal advice and tutorials. Per livestream one representative was able to help more customers than they normally could in half a year. Now, Intime is planning to offer 100 livestreams per day as a permanent fixture. In this blog we elaborate on 3 elements that we see as crucial for becoming a customer intimacy frontrunner:
Be creative in how to understand your (new) customers while they are still discovering their current needs
Translate insights into radical new and customer driven solutions
Last but not least, how to create a heartfelt connection with your customers
To understand how people’s behavior changes, create real-time data that can be contrasted with historical (POS) data. Form a customer insights taskforce to stay on top of the latest developments and encourage them to seek new ways to get input from customers. Web scrape relevant news pages and opinions on social media. Create thousands of datapoints through simple and targeted surveys, polls, A/B testing or smiley terminals in stores.
Determine which information is relevant for whom and make it easily accessible to act upon (via dashboards). This way, everyone stays on top of changing circumstances as the virus develops.
With the historical and real-time data you can investigate shifts in popular items and categories, price segments, how people shop online compared to offline, at what times. Segment customers not by traditional demographic characteristics (e.g. “the elderly”), but segment according to behavior and preference characteristics. Find out if, how and why your customer base has changed, or why it has not. Improve (where possible) analyses with predictive models reflecting new demand patterns.
Despite efforts as mentioned above, data will not give all the answers. Therefore, interpreting data and validating your hypothesis is more important than ever. Not only enrich your findings, but also discover new ones by entering in a real dialogue with your customers. Use underutilized sales or store personnel to call, chat or organize (digital) sessions. Understand why needs change, what choices customers make and see patterns emerge.
2) Translate insights into radical new and customer driven solutions Identifying people’s altered needs enables retailers to take away pains in a way that maximizes value. A successful example is Nike. During Corona they invested heavily in promoting their digital fitness app; Chinese consumers eagerly made use of the digitally connected ‘expert training network’ while quarantined. As a result, Nike’s digital business in China grew by more than 30% during the first quarter and maintained momentum throughout this period.
Quickly developing new initiatives enables connecting with customers in a way that sticks. Faced with increased traffic at stores, Albert Heijn and Jumbo were quick to recognize concerns of their senior target audience, being a group at high risk for corona, by organizing an ‘elderly hour’ in the early morning.
Whereas the first retailer extending their return policy or instating a ‘elderly hour’ will stand out, the tenth retailer won’t be noticed. Furthermore, actively involving customers in developing new solutions to take away pains and address needs might lead to radically new ideas altogether.
Success doesn’t necessarily mean that an initiative must yield euros right away. Rather, if you have demonstrated genuine connection and intimacy it will stay in peoples mind.
Sympathetic actions can deepen connections with customers. For example, one Albert Heijn entrepreneur released a touching advertisement encouraging customers to shop at local (competitor) bakeries and groceries to support them. Likewise, UberEats gave discounts on delivery from local eateries to support local businesses. What we learn from China is that local players have shown to be better positioned to come up with a sympathetic response than international players, further reflecting the need to enter in real dialogues with your customers.
One of the key elements to create a heartfelt connection is to be emphatic; speak early and directly with consumers, while sticking close to your brand identity. Make them feel you understand how they are coping with this crisis and care about their wellbeing. Customers are still keen on the value you create for them; telling them what innovations have arisen from dealing with the crisis and how you are serving them in new ways will make them curious. Finally, give customers means to stay connected and be accommodating to things that are out of the ordinary (e.g.: be reachable at non-typical moments, be less strict in policies) If set-up well, creating customer intimacy enhances lifetime value after the corona crisis Taking time now to understand changing needs can feel counterintuitive – because the building is on fire and it is important to assure that every euro is well spent. However, it will prove crucial when trying to maintain an intimate relationship over every channel even after the corona crisis, since customers will continue to switch between their online and offline journeys. Take the courage to pursue radically different initiatives and go the extra mile to create a heartfelt connection. Consumers will remember your genuine actions and will potentially be a fan for life.
Contact Bram Gilliam Director Retail at IG&H E: email@example.com
Maarten Vaessen Partner Retail at IG&H E: firstname.lastname@example.org
Rinke Klein Entink Manager Analytics at IG&H E: email@example.com