Purchasing panels, catchment area analytics, focus groups, mystery shoppers, brand image tracking, accompanied shops, and eye tracking, we could go on listing more of the myriad ways that retailers seek to scrutinise their customers.
Shoppers remain a mystery
But these are the traditional ways of assessing shopper behaviour and the problem with them is that they typically rely on a very small sample before being aggregated up. They were good in their day but now there are many better ways available to merchants and brand owners.
Better ways are certainly required because the reality on the high street is that we are in a new era of needing to intimately understand customers and their needs. Unfortunately most retailers have failed to address this stark fact and risk becoming largely irrelevant to shoppers.
In the online world retailers know so much about their customers – such as what they browse, how long they browse and what combinations of products they view – and from this they can target them with individually tailored communications and tempting offers. The online world clearly ‘gets it’.
In contrast, the offline world is living in the past and failing to engage with customers on a more personal level. For this to happen retailers need to think differently about how they understand their customers – in a nutshell, researching offline & online customer behaviour in a seamless and integrated way, using new technologies, to get to understand an individual customer’s needs, wants and desires.
The challenge – bringing the online way of gaining customer insight into the world of the physical stores. Admittedly it is not easy but it is possible. And what has made it possible is mobility and the smart-phone.
Smartphones: not just a shopping device
Yes, 2012 might have been the year of the smart-phone, but it has largely been viewed by retailers as simply a sales channel. In contrast, it should be seen as a device that creates extremely rich customer data that can then be used to great effect in the offline environment just as it is in the online world.
Although this sounds tough the reality is that most people have social media accounts, most have smart-phones, and most have an active relationship with two to three retailers via a loyalty programme or from simply subscribing to their email newsletters.
This should provide the basic platform for retailers to at least make a start addressing what is undoubtedly a paradigm shift in the way customers and multi-channel retailers communicate with each other.
There are many examples in the market place of start-up businesses realising that there is a powerful role for mobile devices in the shopping experience that goes way beyond just being about buying goods – such as smart sensors, magic mirrors, scanning QR codes, instant offers at the point of sale and many more.
Big retailers should look to these innovative newcomers for inspiration before they make them irrelevant. At the heart of the difference between the two groups is the ability of the newer players to target individual customers (via mobile phones) rather than through the out-dated route of segmented groups.
It is arguably time to ditch the focus groups and their variable group results and instead embrace the smart-phone and the rich individual customer data that they create.
Sponsored column by Sarah Wilson, retail specialist at consultancy Egremont Group