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The power of the customer: 3 tips for understanding your customers on a new level and strengthening retail operations.

By incorporating retail data and customer insights into retail planning, brick & mortar retailers can adjust to, and excel in, the quickly evolving retail landscape.


For retail leaders, having a deep understanding of customers has always been critical to driving conversion rates. Yet, a fundamental shift has happened in the retail industry in recent years that has changed the balance of power between retailers and consumers, and the dynamic between the two that makes up the critical foundation for superior customer experience and strong conversion rates.

As Harvard Business Review (HBR) noted it article title “Know What Your Consumers Want Before They Do”, the way customers and retail staff have historically interacted has been completely displaced. Previously, shoppers relied on a familiar salesperson who could help them find what they were looking for and suggest new items based on a read of the customer and the conversation that took place. No more. Today’s customer is distracted, sometimes coming in-store after doing online research yet often unsure of what they want and need, and often in a situation where frontline staff are not set up well to truly help them navigate the in-store journey.

Within this environment of the evolving customer, brick & mortar retailers are trying to understand the rapidly evolving preferences and expectations of consumers. And while the reasons why it is important to understand your customer as a brick & mortar retail leader may seem obvious, not everyone will pause to think just how extensive that list is. Among that list are:

  • Retailers are undergoing a massive industry transformation, and consumer preferences and habits are changing just as fast. Brands that fail to be in touch with their evolution risk losing customers that expect retailers to understand them before they walk into a store.
  • Once in-store, retailers and can – and must – capture customers’ attention by enhancing the in-store experience, and personalization and localizing is a key part of successfully doing so.
  • Word of mouth is powerful, and if a customer is loyal to your brand, they will recommend a retailer or specific store to friends and family, driving increased traffic.

The need to understand customers on a new level has never been more urgent. Holiday spending is set to increase this year significantly - Deloitte recently reported that spending in Canada is set to return to pre-pandemic levels with Canadians spending an average of $1,841 this holiday season, compared to $1,405 last year. In the US, on top of the $1.19 trillion spent in US retail sales between November 2020 and January 2021, Deloitte is forecasting a 7% to 9% increase in sales this year over the same holiday period last year due to increasing vaccination rates and continued strong savings from over the pandemic that will support consumer spending and keep retail sales elevated.

Further, Quantum Metrics recently released US survey data which uncovered that 64% of holiday shoppers will be more emotionally invested than ever this year, 53% plan to spend more than $1,000 on the holidays, and 50% of shoppers will start shopping well before Black Friday. The time to get to know your customer on a deeper level is now.

  • Understand why they are choosing brick & mortar over online. As we wrote about in our “Holiday season preparedness” post , customers continue to prefer brick & mortar retail over online shopping and, despite an initial bump to e-commerce after the pandemic hit, the growth in e-commerce has subsided. After hitting a pandemic high of 25.5% of all retail sales (excluding restaurants, motor vehicles and gasoline sales) in April 2020, they have begun going back to pre-pandemic levels. In December 2020, e-commerce sales had already dipped back to 21.3%, and the e-commerce share of sales is now only 2.0 percentage points above its trend since 2014.

    Brick & mortar retailers looking to gain insights into their customers and customer behaviour need to start with understanding why they’re choosing a brick & mortar store over shopping online. Among the many reasons often cited are the power of a memorable in-store experience, being able to interact with staff, and the ability to interact with a brand in a way that is virtually impossible online. Consumer insights are a critical part of the retail strategy needed to give consumers what they need and want.
  • Integrate multiple data sources to gain visibility and understanding. Data is power, and data is all around. The amount of in-store retail data and retail analytics available to brands today is abundant, and retail management platform Optimum Retailing (OR) provides brick & mortar retailers with a powerful solution that incorporates store data around design, construction, inventory, and size of fixtures with third party software and insights, while integrating with business platforms such as SAP and Oracle. OR’s clients are empowered to optimize merchandising, promotions and the overall in-store experience. The power of the OR platform is rooted in building data-driven store-specific profiles using advanced tools to collect and analyze multiple sources of data, allowing users to gain AI-driven behavioral-based insights into consumers that are changing the brick & mortar retail game.
  • Listen to and empower your frontline. Associates are not only your brand champions and key to delivering a superior customer experience, but they also see and hear firsthand how your consumer is reacting to your brand. Prioritizing frontline employees is an easy way to gain an understanding of consumers by asking for insights – what are customers saying and feeling, and how are they reacting to the brand? What are they asking for? What has changed since the pandemic? Employees bring brands and campaigns to life in-store, and have the power to foster an emotional connection with customers that lasts long after a customer leaves the store. They are a critical component of both understand and engaging customers.

Despite the significant benefits to getting to know your customers on a deeper level, many are still failing to make it a priority. As author and influencer Neil Patel has noted, “organizational leaders are neglecting the customer before and after the sale. The biggest barrier to even beginning is usually the lack of a deep understanding of the customer in the first place.” He went on to say that “having a comprehensive understanding of your customers is key to achieving core business goals. Whether you’re trying to build (or optimize) the customer experience, create more engaging content or increase sales. Knowing your customers better than they do is key.”

With today’s retail management platforms such as OR, and the retail data that exists, it’s never been easier to prioritize consumer insights, and the need has never been greater. As the industry continues to bounce back from the pandemic, customer insights will be a driving force in setting apart those that come back stronger than before the pandemic, and those that don’t. OR is working with some of the world’s top retail brands on understanding their consumers and optimizing their retail – get OR working for you today.

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