Smart data and new customer segments offer retailers a map for the new landscape

By Beth Tait, Managing Director at Go Inspire Insight

Every retailer already knows that 2020 changed everything; the key issue is what to do about it. More than ever before, retailers need to understand who is coming through their (virtual or physical) doors, who stopped coming, who is (or isn’t) returning, and how shopping and spending behaviour has evolved. Only with those answers in hand can they construct a robust strategy for the new normal.

To illustrate the changes taking place across UK retail during the Covid-19 pandemic, Go Inspire Insight analysed the behaviour of five million retail customers across the UK, working with a selection of multichannel client companies. Our analysis identified seven new customer segments that offer a valuable starting point for businesses to reset their strategic framework and forge practical plans of action for navigating the post-pandemic landscape. 

Seven new segments for 2021 and beyond

Among existing customers, we identified a ‘Loyal Stalwarts’ cluster who carried on spending at broadly the same level, though perhaps with an altered basket spend. Less reassuring for retailers, however, are two other segments of existing customers: a ‘Grown Apart’ cluster who reduced their spending when migrating from spending in-store to online, and a ‘Trial Separation’ segment of existing in-store customers who stopped spending rather than switch online. Since this third group can account for 50% of revenue for retailers, there’s a strong case for re-engaging them, either bringing them back in-store or activating them online.

Among new customers, our research revealed three retail segments, offering varying levels of potential. First, we identified a new ‘Marriage of Convenience’ group, the one-hit wonders who came and went during lockdown, have low retention potential, and should not be seen as a valuable replacement for the ‘Trial Separation’ segment.

More fruitful may be the new ‘Chance Lovers’ and ‘My Usual Type’ segments. The former are chance visitors who have relatively high spend and could be fostered as a new customer group; the latter are new customers who fit the old expected pre-pandemic profile, and also offer prospects going forward.

Last but not least we identified the ‘Together Again’ segment – reactivated lapsed customers who returned to a trusted retail brand in lockdown and certainly merit an enthusiastic welcome back – for example, through rewards for future incremental spend.

What next?

As retailers deal with the challenges of the restrictions, these new emerging segments offer a valuable navigation aid for the coming months. Through bespoke, and ongoing, analyses of their own customer base, businesses can understand the changes in their customer base and adjust their nurture plans for existing, new and reactivated customers. In the testing and unfamiliar retail landscape we now face, smart use of customer data is the magic ingredient that will help businesses travel in the right direction.

Go Inspire Insight’s full report – The Post-Pandemic Profiling Study, Part 1: Early evidence and insight – is available to download here.

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