Stephen Mader reveals the importance of looking beyond what your customer buys, to why they buy.
When we think about shopper loyalty programmes from the last decade, they have usually been about identifying correlations and understanding behaviour, with the end goal of optimising pricing and assortment to maximise trips and shopping basket.
This sort of analysis, while being strong on transactional record-keeping, has been weaker at understanding underlying purchase motivations as well as at uncovering shopper activities outside of the confines of a specific store. Simply put: current loyalty data reveals the Where, What and When, but fails to reveal the Why.
A digitally dependent shopper has different expectations on how he or she interacts with the world – expectations that are defined, in part, by technology. This manifests itself in an expectation to have a contextualised, tailored and personalised relationship with a retailer or brand, on the shopper's own terms, wherever and however he or she wants.
One simple example of how to move beyond store data is the Spanish retailer Mercadona, which conducts more shopper research than any of its competitors. The research allows it to connect what its customers buy (which it knows from store data) to why they buy. This allows Mercadona to identify the needs of its shopper, creating a platform innovation both in the types and range of goods it sells, and in building more effective personalised conversations. Remember, loyalty is not a strategy; it is an outcome of having a shopper-centric frame of mind.