At the end of Week 1 of the UK's non-essential Retail reopening there appears to be both positives and negatives emerging from the tentative start to re-engaging with the general public.  Even before last Monday's restart the Office of National Statistics (ONS) had recorded a strong rebound in the DIY sector during the month of May 2020, with a 12% increase in sales and, of course, grocers and food Retailers had all witnessed the dramatic rise in demand for their goods once lockdown officially began at the end of March and into April.

But not all non-food Retail is showing the same signs of recovery.  High street Footfall is considerably down due to new queuing and social distancing protocols, coupled with customer anxiety in some generational and demographic quarters, and quite how things may develop is understandably uncertain.  The 'first flush' of returning customers eager to scratch their pent-up consumerist itches may not endure, but only time will tell if what appears to be the first tentative signs of the hoped-for V-shape recovery are sustainable.

In line with my two previous postings I want to once again highlight the importance of harnessing the power of data and analytics to divine valuable business insight into volatile, shifting customer purchasing patterns.  Once such patterns surface it is possible to couple the insight(s) to desired business outcomes, a major one of which I would suggest is a strategic re-focus on the value of customers.  

Customer Life-time Value (CLV) is an important Retail metric which depressingly few organisations still consider to be useful but if we take the simple definition of CLV to be something along the lines of "the total value a consumer brings to a retailer’s business throughout their lifetime" it is clear that understanding who, where, when and what constitutes customers' purchasing is of paramount importance in terms of a). maximising sales potential and b). minimising Marketing costs with targeted, personalised messaging.  At this point of the Retail Reboot along comes an opportunity to re-imagine how Retailers engage with their customers, and at the same time to begin the process of cleansing their clientele.  If that last sentence sounds harsh, it's meant to be: low-value customers (as defined and recorded by KPIs such as CLV) are costing Retail businesses precious margin as a result of high-value promotions as incentives to return.  Focus instead upon that segment of your customer base which, if and when correctly engaged, have the propensity and purchasing power to help you to sustain a profitable business model.  In other words, harness Emotion Promotion: an opportunity to communicate with customers to create moments of emotion. Genuine acts of kindness and altruism have the potential to engender a very real sense of pride and warmth throughout the broader customer base by strengthening Brand image and keeping them engaged during these trying times.  It also demonstrates an emotional connection without pushing a 'hard sell' strategy and, if tackled correctly, offers a more joined up Online to Offline (O2O) Loyalty approach using multi-channel data.

Woo back returning customers by all means - but do so analytically by understanding their behavioural patterns at a granular level.  Don't cannibalise hard-won sales by offering high-value, high-cost blanket promotions to sectors which will not reward such efforts in the long term.  

Easy, isn't it?

Except everyone knows it's not.  To do so successfully and meaningfully with tangible business value takes great purpose and even greater insight.  But I would argue that that insight is very often latent within the data Retailers already hold - and now is the time to analyse it even more closely.