#RetailTrends2020: Data - Can you spot your brand superfans?

With the retail landscape getting progressively more complex and competitive, and growth ever more elusive, how will retailers be responding in 2020? One big trend to watch out for is those who look to segment and target their customers far more forensically than in the past, while executing this in real time.

The key insight these leaders share is that not every customer is alike. Nor – crucially – are they equally profitable. So engaging with those customers whose loyalty extends beyond temporary sales promotions or one-time festive purchases – and who’ll deliver positive value over the lifetime of their relationship with the brand – is key to significantly boosting retail profits in the long run.

To do that, of course, retailers need to know who these high-value customers – let’s call them the brand superfans – are and what they want. But even that can be a tough proposition for many retailers who still struggle to get the right kind of detailed consumer insights out of their data, let alone translate them into a form the business can use in day-to-day customer interactions. 

The good news is that peak shopping periods like Christmas are the ideal time to put that right. The combined effect of increased store footfall and digital browsing/shopping brings a wealth of new potential datapoints. With creativity and ingenuity, smart brands can use these to identify the superfans who will really buy into the brand purpose and become highly loyal, highly profitable customers for the long haul.

In doing so, it’s important to understand that superfans come in two “flavours”, financial and social. Financial superfans invest their money in the brand, whereas social superfans invest their time and social capital. Both bring value to the business in their own way, and the techniques for identifying them are different.
Financial superfans can be found by analysing individual customer metrics like regularity of spend and the ratio of full price to discount purchases. Social superfans can be spotted by cross-referencing interactions on social media and online reviews with the audience profile they speak to.

In both cases, companies need to be proactive and forensic about customer data, able to identify patterns of superfan behaviour, like the types of products they buy, the channels they prefer, their social reach, and the way they respond to promotions or special services. Some retailers can do this already. But for many that kind of detailed analysis is still out of reach.

What’s more, it’s not enough to just identify your superfans – once found, you need to cultivate and nurture them carefully. After all, these are the individuals who ultimately add the most value to the bottom line. 

This cultivation includes rethinking how their loyalty is rewarded. New tactics will likely be needed, especially if a retailer is still reliant on a traditional points-based program as its primary loyalty mechanism. These no longer deliver the level of customer experience, nor customer insights, needed in today’s marketplace.

Instead, using a digitally enabled, user-focused loyalty concept, retailers can strike a new kind of deal with their customers: a personalised digital experience in return for new insights into consumer preferences.

Starbucks is a great example of what’s possible. When the leading coffee chain reinvented its loyalty program with a new mobile app, it enabled its customers to pre-order their coffee and pay for it using their smartphone – or even their smart watch. 

So, as well as benefiting from loyalty points, customers enjoyed the streamlined convenience of avoiding queues in store. And, in turn, Starbucks benefited from a raft of new insights into their purchasing behaviour, enabling the company to rethink its customer experience, including how its baristas manage their workflow from order through to fulfilment.

The step beyond nurturing your existing superfans is finding new ones. By deeply understanding your superfans and their behaviour, it is increasing possible to use social media and digital marketing to find lookey-likeys that don’t currently associate with your brand.  It is also possible to find these lookey-likeys within your existing fan base and put in place a set of tactics to move them into the super fan category.   

For most retailers, there’s still much to do to reach this level of analytics sophistication. Moreover, it takes much more than simply collecting data. That data needs to be linked, analysed, and – importantly – translated into a “humanised” form that the whole workforce can actually make use of. The step beyond this will be a set of real-time decisions that are automated based on these insights – the Holy Grail for retail and one that the highest performing retailers are moving towards.

Ultimately that’s the only way to orient the business around the customers with the greatest lifetime potential – and deliver a boost to the bottom line that lasts long after any temporary promotion-driven or festive sales surge has faded.

What’s Hot on Essential Retail?