Consumers today are highly connected and informed, and can easily convey their preferences, demands, and dislikes to the world at large via the Internet. To effectively retain customers and cater to their needs, businesses should utilize customer-centric merchandising.
Customer-centric merchandising rethinks the entire merchandising process, using analytics to determine consumer patterns and then focusing on the people who buy the product rather than the product itself. In customer-centric merchandising, management and marketing decisions are made on the basis of customer preferences and buying habits. This customer focus allows retailers to stay one step ahead of their competition by responding directly to proven customer buying patterns and preferences, improving the customer experience, and leading to increased customer retention and satisfaction.
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How Can You Determine What the Customer Wants?
Customer preferences can be determined through a wide variety of means, including sentiment analysis, the use of advanced analytics services, analysis of social data, and customer survey questions and reports. Due to the wide availability and huge amount of information about customer habits, likes, and dislikes available on social media, retailers currently face very few roadblocks when trying to determine how best to cater to consumers in a particular demographic or market.
With data so easily accessible, retailers just need to choose the right customer analytics solutions, marketing analytics solutions, and customer retention strategies to properly and fully benefit from this wealth of information. Retailers need to identify the largest and most lucrative opportunities presented to them, taking into consideration their resources, budgets, and the typical demographic breakdown of their current customer base.
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Catering to Customers
Once customer-related insights have been derived and opportunities have been identified, the next step is putting them to use and creating marketing and retailing strategies. Retailers should implement strategies that reward loyal customers and increase long-term retention, as well as those that simultaneously target both new and existing customers.
Retailers should use the information they have collected about customers to establish customer-centric price and promotion plans. Integrating customer focus into price plans will ensure that their products are affordable for the majority of the consumers they wish to target, and should take into account the average consumer’s income and economic standing as well as other factors like inflation. Customer-centric promotion plans should take into account how different customer segments react to different types of advertising and promotion methods. Millennials, for example, respond positively to online and digital marketing, including social media campaigns, while it’s generally less effective to target Baby Boomers through these means. Promotional plans should also eliminate ineffective promotions and prioritize promotions that offer popular items or target the retailer’s largest and most profitable consumer group.
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A customer-centric merchandising approach also affects the stock that a retailer has on hand. They can determine what to keep on the shelves and what to get rid of by taking into account what consumers are buying and what they would like to buy should it become available to them.
Putting the customers first can be the key to success for retailers if they utilize the data that’s available to them properly, and if they take advantage of advanced analytics services and tools to derive actionable insights from that data. Customers are making their wants and need loud and clear to retailers—now it’s time to act on that information and seize its potential.