Oxymoronic as it may sound, managing uncertainty is possible.
Uncertainty has always played a role in business – and in fact, many retailers thrive on it.
Any top leader knows mitigating harm and spotting opportunities as they emerge is part and parcel of keeping a business relevant and competitive.
With Christmas navigated in the most unstable business environment in a generation, we’re still far from in the clear, and uncertainty stays planted on our doorstep.
Here we showcase what it takes for retailers to manage upcoming uncertainty in 2021, and how to find opportunities in the face of adversity.
Mass migration online has stiffened the competition
The challenges facing retailers are plain to see, and come in the form of:
- Budget cuts
- Shop closures
- Staff reductions
- Digital adaptation
- Unpredictable markets
- Eroded future proofing
- Fast-changing consumer trends
While a lot of these can be seen across the board, from retail to pharma, what’s unique is the race in the digital space.
With lockdown restrictions chipping at the profit margins of bricks and mortar stores, many retailers turned online, accelerating and improving their ecommerce capabilities.
And, as our commerce report shows, they were right to do so – not just for the short-term benefits, but for the long-term too:
Nearly half of all consumers plan to shop online more frequently after the pandemic is over.
With the online retail space swelling, cutting through the buzz of online media becomes harder, as does pinpointing exactly where the opportunities lie.
What’s more, the need to have functioning ecommerce and its supporting campaigns up and running by yesterday means the time for testing new ideas is reduced, as is their capacity for predicting what the market will look like tomorrow.
It’s a catalogue of obstacles, but as Stuart McMillan, Head of Multi-Channel at Tiso Group, explains, “in these changing and uncertain times, it has never been more important to understand your customers and your market.”
Success in times of uncertainty is bound up with visibility. That is, how well you can study the state of play, adapt, and align with the people you’re selling to.
Getting a foothold on the future of retail
Bias aside, with the right data, you really can bring fuzzy projections of the market landscape into focus and find a good measure of predictability in an unpredictable world.
The first step is accepting you don’t have all the answers, but being willing to find them. We know what good data looks like, and how retailers should be using it:
1. Find the right data.
The kind of data you need is:
Harmonized: Data that’s collected with a single methodology means you can make like-for-like comparisons across regions and markets. It offers simple and varied analysis, and provided there’s a large enough sample size, comparisons can be made at any scale.
Global and local: You’ll want to keep an eye on the trends sweeping the world, but really focus on what’s happening in your niche. Build your products, campaigns and messaging around your audience.
Updated regularly: If the world is changing, you should move with it. And when time is of the essence, you’ll want a source that’s simple to use and gives you answers quick. And with data that’s regularly updated, you’ll see the trends as they happen.
Detailed: Look way beyond the obvious and get into the nitty-gritty of who your audience really is – the good, the bad and the ugly. With GWI, you’ll get a picture of the size of your market, and see how many people who fit that profile actually exist in the real world.
Psychographic: To truly get to grips with how your audience is behaving, you need to ask ‘why?’. Why are they motivated to buy? Why do they value certain products, brands and content? Psychographics give you the all-important context behind commercial actions.
Customizable: By posing the questions you’ve been longing to ask, you can get to the heart of what matters most to your audience. This kind of customizable survey data puts the control back in your hands, given the seismic shifts in attitudes we’ve seen.
2. See how your audience is changing.
As our brand survival guide explains, your audience is your most important asset, so keeping the needs and wants of your target market front of mind is the place to start.
You’ll want to pinpoint the behavioral and attitudinal shifts in your sector, and see whether they’ll endure into the recovery phase and beyond.
Whether you’re the one digging into the data on the daily or not, getting answers is easy. Here’s how:
Create an audience: Once you’re in the GWI platform, you can build out your audience in as much detail as you need.
If you already have a strong idea of who you want to target, simply create it fresh and give it a name.
Add their attributes: Combine any number of attributes – including behavioral, psychographic, and regional – to reveal the big picture.
Drill down into the data set and source key attributes. If you know the attributes you’re after already, use the ‘search’ function to find your data points faster.
Group the character traits: Grouping attributes allows you to map out your statements in a visual and digestible way – helping craft a neat, but comprehensive target persona.
Choose your data set: Apply your new audience to the data set that matches your needs. If it’s really recent, topical stuff you’re after, you’ll need GWI Zeitgeist which runs monthly. Other options include GWI Work that profiles today’s professionals, or GWI USA that gives you a closer look at your American consumers.
3. Test, optimize, refine
When every cent counts, you’ve got to be confident in your decisions.
Going by what’s worked in the past is risky in today’s uncertain environment, but so is blindly testing new ideas.
Whether you’re assessing how a new product will go down with your audience before putting it to market, or seeing how they’ll respond to a new set of ads, having a testing environment to hand saves you time and money in the long run.
Data in action: driving online clothing sales
Here’s a flavor of how retailers use our data to shore-up their strategy.
Pretend you’re a media strategist working for a U.S.-based clothing brand. Following the closure of highstreet stores, the focus is now on driving online sales of it’s new range amongst its core audience: Gen Z.
We know Gen Zs, on the whole, prefer to buy online (60%) over in-store (40%).
But that’s not nearly enough to craft a compelling promotional campaign.
To deliver ads that are relevant to your customers’ personal interests, you’ve got to dig deeper.
Start by refining your audience. In our case, it has 3 attributes: (1) U.S. (2) Gen Zs (3) who bought clothes online in the last month.
Then comes the fun part. Layer over any number of attributes to get to know them. For our ad campaign, we want to know, specifically:
- Where they’re active online.
- Why they’re active there.
- The types of content they’re consuming.
- Their outlooks and values.
- What they want from fashion brands they engage with.
Here’s what your research tells you:
Social media consumption: Social is a focal point for those targeting Gen Zs in general – so this is a good channel to host a campaign. For American Gen Zs who buy clothes online, Youtube, Instagram and Snapchat top the list of the platforms said to be used at least once daily by this audience.
Why they use social: Nearly half of this audience typically discover new brands on social. They use social media to find entertaining content and keep up-to-date. The accounts they’re most likely to follow are brands, actors, singers and comedians, providing scope for influencer marketing.
Wider interests: These include music (86%), food and drink (75%), and cooking (70%) – giving rise to opportunities for ad placement and partnerships.
Brand values: They value brands that are reliable, innovative and authentic, preferring them to be eco-friendly, socially responsible, and to listen to their customers.
Purchase drivers: They want free delivery (76%) above all else, coupons and discount codes (61%), and will seek out reviews from other customers before making a decision (52%).
This initial research sets the stage for an ad campaign for Instagram, YouTube or Snapchat, ideally displaying alongside music, film and food content to utilize the shared interest with fashion. Ensuring your messaging is entertaining, but also hits on key values (like reliability and eco-friendliness) as well as purchase drivers (like free delivery and discounts) is a strong foundation.
The next step would be to unpick what ‘entertaining’ really means for this group, and the content formats they respond best to, then test the new ads out on your audience using GWI custom before setting them loose on the public.
Take the power back
Not all innovation needs big budgets.
For retailers, the struggle has been adapting to change, and finding security in the new digital landscape.
But the opportunities are there, and with the right data you can factor in safety measures that will keep you in line with the market landscape, and your audience.
Uncertainty isn’t always a bad thing. Invest in getting better visibility, and use it to your advantage.