Studies have shown that, even in times of crisis, such as the one we are currently living with the new Coronavirus outbreak, customers are still open to try new products, as long as these are perceived as more valuable than their predecessors. With most physical shopping experiences being shut down, marketers should support their customers in finding these convenient, value-based offers or alternatives. Circumstances may permanently change customer preferences, even when the situation improves, customers may stick to their newly tried-out products. To anticipate, brands should closely monitor behavior to proactively identify the start of new emerging consumer trends.
Accelerated shift to online
Social distancing measures have rapidly driven populations across the globe to online commerce, for purchases previously done offline. The recently published digital economy index of Adobe showed that e-commerce went up by 25% in the US and by 33% in the UK, from March 8 – March 20.
Retailers are massively trying to catch up with demand, each pursuing different strategies. In the US, Amazon opened up 100K new jobs to ensure its delivery network can withstand the crisis and has even increased wages to attract more candidates. Closer to Belgium, online retailers like Coolblue are pursuing other tactics, such as optimizing product categories. By suspending certain items, like travel suitcases and navigation systems, they free up more resources for more essential products that are in high demand.
Even if we see recent spikes in online purchasing behaviour, the question remains whether the crisis will accelerate a permanent shift to online sales or not. According to studies of Ecommerce Europe, 35% of online retailers expect more sales this year, precisely because of consumers making the shift from offline to online sales.
The crucial role of marketing in this shift
In an online world, there are no store shelves to stroll along, no showrooms to visit, no products to touch and try. As customers shift to online sales, it is becoming more important than ever to show them personalized and relevant offers. After all, as a marketer you want to make it easy for your customers and not immediately overwhelm them with an abundancy of choice. The question is: What emphasis should marketing put in their personalization strategies given the current situation? The answer is to be found in analysing the products and services that consumers are looking for during uncertain times, and what their attitude towards suggested alternatives is.
A study of Ipsos revealed interesting insights into consumer behaviors during crisis years. It pointed out that, during crisis situations, customers are as willing to try out new products as during non-crisis years. The biggest difference is that during difficult years, consumers tend to prefer value over premium products. During the last recession, for example, people switched to private labels and lower cost brands. It seems that consumers show this openness because their habits are being interrupted and they are forced to try new things.
So, customers are open to new suggestions, but besides offering value, what should marketing be focusing on? Through the analysis of the demand for specific product categories, Adobe reported a peak in online shopping related to health, home working and food items with a long shelf life. Similarly, Ipsos expects more interest in product categories related to healthcare, cleaning and cooking at home.
Given the continued openness of consumers towards new and valuable alternatives, providing them with personalized offers will allow marketers to stay relevant. And by focusing on specific ‘in demand’ product categories, combined with automated personalization, marketers will necessarily achieve ROI of personalization initiatives.
Data, analytics and automated personalization
Now, how can you successfully leverage data to optimize your digital strategy? Knowing what products, brands, and pricing fall into the “convenient-and-valuable-alternative” category is one thing. Predicting what your customer will like is the other one.
Analytics solutions, combined with next best offer solutions, automate the analysis of products that are eligible for a customer, and use a combination of business rules, machine learning algorithms and accurate customer 360° data to suggest the best matching offer for that customer.
In an online world, it is becoming more and more important to make this happen in real-time. As a marketer, you want to immediately grasp the moment your customer shows interest. You want to be able to quickly present an alternative product for something that is out of stock or that is perceived more valuable to a customer. In addition, you absolutely need to respect data privacy and contact preferences. Automating this entire process becomes, then, crucial into achieving relevance at scale and ROI.
Next to supporting relevant personalization, data & analytics can also provide interesting findings. In the same study, Ipsos not only discovered that consumers prefer value over premium, they also confirmed that many consumers, after having bought a more valuable alternative, were very satisfied, and even kept buying these products after the recession. In this case, the crisis permanently changed their behavior.
Smart data analysts will be able to keep track of these consumer behaviors, and closely follow up signals of the ones that stick. Sharing and acting on these insights will allow marketers to anticipate and prepare new personalization strategies. Measuring the outcomes of these strategies in their term, will confirm changed behavior or not, creating valuable feedback to search for new approaches.
The action plan
Crisis situations call for immediate actions, but companies should not forget to identify mid to long term improvements. Customer behavior insights will identify initiatives to present relevant and valuable offers at scale. Therefore, a combined plan should be focused on:
- Helping customers find value-based products or alternatives on the short run
- Closely monitoring consumer behavior to identify new emerging trends that might stick
- Leveraging next best offer technology with customer insights to increase offer relevance
- Establishing continuous feedback loops reporting on personalization results and confirmed consumer trends
Good action plans start with clear priorities in mind – where can you make the biggest impact? Look for the biggest customer improvement, the improvement for the largest group of customers, the largest product categories to be optimized, or avoid the biggest risk, or search for the biggest company gain…
Answering those questions will help you choose the first things to tackle. This will guide you in identifying opportunities to improve recommendations throughout different channels as your website, mobile app, direct mails, emails and so on. Whatever you would like to personalize, make sure you keep it consistent across channels.
Next, inventorise the data you need to support personalized recommendations. What customer profile data would you need to identify interest and intent, and what offer descriptions, metadata and content would you need to personalize? Then determine how you would you like to measure to the success of your personalization tactics, e.g. number of personalized offers presented vs offers sold.
Also check whether you can measure new buying emerging trends in buying, and if you could influence customer behavior via personalization. And finally check your marketing technology capabilities to provide next best offer automatically across channels. Review its capabilities to capture digital signals of customer intent, how it can combine this with offline data in a complete and real time customer profile. And how based on this, customer journeys are atomically triggered across channels, offering decision led or machine learning driven product recommendations.
Feel free to reach out to us if you have any question about this topic. We’ll be happy to help you find the strategy that your business needs.