While age is highly correlated with the segment
that customers are in, it would be a mistake to assume
that all young consumers shop online and all older
consumers shop in stores. Getting to know individual
preferences is key.
2Get Local Despite di;erent behaviors in these segments, it’s important to note that almost all consumers till shop in stores for some portion of their shop. For many, the key will be to retain the in-store
shop when consumers begin consolidating the brick-and-mortar stores they visit. The recipe for doing this
will be unique to each customer and require di;erent
analytics than before. In addition to understanding an
individual’s preferences for product, promotions and
pricing, we see that it is also critical to understand from
where they drive to reach your store, what their other
options are along the way and how they cross-shop other
locations to get the o;er right.
We call this a customer-based value proposition, for
which we use machine learning to identify the optimal
o;er in the marketplace along with when and how the
customer chooses a store to inform the most engaging
mix for a customer, store, region and category.
3Making It Happen Understanding customers at a granular level and taking action on that understanding through personalization or localization will almost certainly require some investment. When it comes to
funding this investment, we recommend starting with
;nding e;ciencies in what operators are doing today.
For instance, many retailers pride themselves on their
promotional plan, and yet we routinely identify
savings of anywhere from ;; to ;;; in margin
improvement to be captured in less than a year
with clients. All too often, the plan for customers
starts with what an operator can a;ord instead of
determining what is required to win the customer
and then ;guring out how to a;ord it.
In summary, we have good evidence that the
consumer is changing their behavior, and this
will continue into the future. And yet, adapting
the shopping experience and value proposition
to attract customers is not easy and can
get expensive. The right execution for
a brand is dependent upon the unique
customers the brand serves, but
what is almost certain is that
the earlier you get started
in crafting this new
formula, the better.