Listening to the voice of the Customer

Helping Retailers make sense of Customer behaviour is one of our key areas of focus here at dunnhumby. While we normally do this by using granular purchasing data to deduce what Customers might do next, we're also keen to provide Retailers with a view of some of the bigger issues affecting the shopper mindset right now.

It's with that thought in mind that we created the dunnhumby Customer Pulse, a survey of shoppers from 19 countries across Asia, Europe, Latin America, and North America. Around 400 consumers were surveyed in each market, with online interviews conducted between March 29th and April 1st 2020.

The first survey provided us with a great deal of insight and three key observations.

• We believe that a new value wave is here Customers may be making fewer visits and shopping at fewer stores, but they are buying more when they do, and spending more on groceries as a result. Above all else, though, fears about personal finances mean that Customers are looking for greater value from Retailers.
• Satisfaction with online shopping is outpacing shopping in-store The majority of Customers believe that physical stores have done a good job of responding to the outbreak (54%), but satisfaction with both online delivery and online pickup services both outweigh that of brick-and-mortar stores.
• 'Worried' shoppers provide great insight into differing need states One of the key questions we asked survey respondents was the degree to which they found themselves worrying about the pandemic. 34% of respondents identified as 'worried', and answers to subsequent questions from this specific group allows us to gain insight into their evolving needs, something we plan to explore further in future surveys.

We plan to conduct two subsequent surveys over the coming months, so please stay tuned for the launch of future editions later this year.

Building loyalty in a time of crisis

Amidst all of the challenges facing Retailers and their Customers at present, it can be hard to focus on anything other than the vital tasks of keeping stores open, clean, well-stocked, and as safe as possible. Nonetheless, opportunities to improve Customer loyalty do continue to exist, and those Retailers that can build a greater connection with their shoppers during this time have much to gain.

We believe that the pandemic will be defined by three key stages: Insecurity, Transition and Recovery. At present, we find ourselves somewhere between Insecurity and Transition – uncertainty remains rife, but the world has started to adapt to the consequences of the outbreak.

In speaking to our colleagues, partners, and Customers around the globe, we feel Retailers need to focus on three primary areas when looking to improve Customer loyalty during this phase.

• Reinstate (or maintain) personalised promotions One immediate response to stock shortages by many Retailers was to remove digital and in-store promotions. While this was an entirely sensible reaction during the early days of the outbreak, there is clear evidence that now is the time to reintroduce promotions.With supply chains continuing to normalise, Customers are now acutely aware of the absence of promotions. A third of Customers (35%) in our Customer Pulse survey say that they have noticed price rises, and while a huge number (80%) acknowledge the necessity of basket restrictions, fewer than a fifth (18%) believe the same is true of promotion removal.As the economy contracts, Customers will look to Retailers for continued value in their shop. The reintroduction of promotions is a simple way to make this happen.
• Make reward schemes flexible, clear and easy-to-use Loyalty schemes might not be top-of-mind for many Customers at the moment, but Retailers can help make those programmes work harder with just a few tactical changes. Reminding Customers of the benefits they're entitled to presents a low-level way to demonstrate your commitment to them.Tactics to consider include the waiving of voucher expiration dates, offering additional redemption values for limited periods, and generally helping Customers get greater value from their incoming and existing rewards, particularly as shopping budgets tighten.Finally, consider allowing Customers to divert their rewards towards local communities and charities, or giving them the option to convert points into 'pay it forward' gift cards for local businesses.
• Prepare for tomorrow with lifecycle marketing plans Getting an accurate forecast of Customer behaviour has become much harder, with trends changing dramatically week-by-week. At the same time, keeping track of attitudes as they change is an essential task for anyone who wants to be ready to respond as new patterns emerge.Broadly speaking, this means focusing on a deep understanding of how and why Customer needs are changing. Retailers must strive to understand key indicators like how and why the dynamics of Customer value are changing, whether specific demographic attributes contribute to behavioural shifts, how shopping behaviour has changed, the new need states driving that transformation, and how different messaging can influence Customers on a segment-by-segment basis.A nuanced appreciation of these factors, combined with a consistent commitment to keep listening, will help Retailers develop effective loyalty-building strategies as we move gradually towards recovery.

Recommendations for Retail Media advertisers

For anyone involved in advertising to Customers via Retail Media, the past few weeks have been characterised principally by widespread uncertainty.

Trade uncertainty has seen products disappear from shelves, promotions halted, and a shift in focus from Retailers towards effective operation. Channel uncertainty has been defined by the cancellation of major events, the removal of 'touch-based' media like coupons and sampling, and the removal of out-of-home advertising as social distancing takes effect. At a brand level, advertisers have been faced with the unenviable task of staying relevant while striving not to be seen as uncaring, insensitive or – worse – profiting from a crisis.

To navigate these waters, advertisers need to show that their business is committed to doing right by their Customers. And the only way to do that is to demonstrate a clear understanding of what 'right' means. To us, this requires a focus on three areas.

• Truly understanding Customers These are unprecedented times, and what worked yesterday may no longer work tomorrow. Only granular behavioural insights can tell us what Customers are truly thinking and how brands can help them overcome their fears, worries and needs.
• Tailoring, targeting, and personalising communications to them Huge swings in Customer behaviour are now commonplace, particularly with the pandemic unfolding at different speeds across the world. Communications must be tailored using aggregated insights, deliver the right messages to the right segments, and personalised to provide Customers with the support they need at that moment in time.
• Implementing sensible targets and KPIs With new approaches and new techniques of reaching out to Customers comes the need to implement new targets and KPIs. Advertisers must be mindful not to let the pursuit of their objectives outweigh their focus on helping Customers.