It seems like just yesterday we were caught up in the excitement of the holiday season. Much of the world observing Christmas in December; Chanukah was celebrated earlier that month – beginning on the evening of the 6th; Diwali was on 11 November and, of course, Ramadan was back in June.
These are the times of the year when we tend to spend a little extra money – buying gifts for loved ones and preparing for celebrations. These are the times when retailers have a chance to prove themselves to customers they already have and try to win new business. And how do they do that? Great deals, loyalty programmes? In part, yes, but those that find real success are the ones that adopt a ‘commitment strategy’ – something to show that they know their customers, and how their needs are changing.
It's been fascinating to observe the confluence of technology, consumer behaviour and marketing strategy
The ability to do this has evolved with advances in technology and analytics over the 30 years I’ve worked in marketing. These allow us to understand shoppers in ways not previously possible – for example, do your shoppers prefer an in-store or online experience? Do they prefer to buy only certain items online? These insights create smarter retailers who know how to stock their shelves based on prevailing interest, and smarter shoppers, who can see which location has the item in stock before going to buy it.
It’s been fascinating to observe the confluence of technology, consumer behaviour and marketing strategy. In my role as MasterCard’s chief marketing officer, I have a wonderful opportunity to see the effects of good insights on marketing globally. Right now, there are so many cross-currents in retailing – and, in fact, in all parts of the world of commerce.
For example, the list of top 10 retailers in the world has been reshuffled over the past two years, with four new entries in 2014 alone.
Further, while ecommerce is the growth focus for so many companies, it has never broken 10% of total retail in any country.
And some high-profile brick-and-mortar retailers have cut back, or even cut out, their physical locations. At the same time, pure-play ecommerce innovators such as Amazon, Warby Parker and Birchbox have moved to open physical locations. The trends are divergent.
Now mix in the touchpoints and channels that consumers will maintain during their shopping journey. Mobile, social, alerts, apps, loyalty programmes, in-store technology… it can be intimidating and empowering.
Consumers are more likely to be loyal to a retailer than to the brands they will buy from that retailer.
The common denominator – the simplifying factor – is the consumer that transcends channels: the ‘Omnishopper’. Channels aren’t buying anything; the consumer is. And they’re not buying from just anywhere, they’re buying from retailers who show they’re committed to them. This new strategy of commitment marketing is meant to increase the intensity of relationships and revenue. It’s the understanding that price is not the primary factor when the Omnishopper is contemplating a purchase. A MasterCard study revealed that this new brand of shopper wants a fair price and high quality; not just a bargain-basement deal. They also want good customer service (which has them going into physical stores); to be engaged; and convenience.
To me, this is related to something I’ve been witness to over the past decade: that people value experiences over things. Their predilection is to be loyal to the retailers who they believe they can count on – who deliver to them the shopping experience they want.
In fact, research shows that consumers are more likely to be loyal to a retailer than to the brands they will buy from that retailer.
As business people, we are living in an unparalleled time, where customer insights allow us to create tailored, personal experiences; react to people in the moment; and establish a community around an idea, brand, or event – no matter what time of year it is. I’m excited about what opportunities the next wave will bring and how it will bring us even closer to the consumer.
Let’s keep the conversation going.