The 5 most important insights for stores
Indivd has, based on many customer contacts and the first test pilot at Best of Brands in Stockholm, developed the five customer insights that – in addition to cash receipts and transactions in the form of purchases – are the most demanded by retail stores.
The possibility of gaining access to qualified data about your customers increases with digitalization and Indivd-X. This helps to create more efficient and profitable organizations. Such customer insights are used to get a deeper understanding of how the store’s visitors think and feel. By analyzing visitor behaviors, physical commerce can better understand what their customers demand and need and most importantly – why they feel and why they make the decisions they do.
– Increased customer insight contributes to a more efficient visitor journey and will help store managers to understand what they should focus on, says Fredrik Hammargården, Commercial Development Manager of Indivd.
The five most important customer insights
Indivd has, based on many customer contacts and the first test pilot at Best of Brands in Stockholm, developed the five insights that – in addition to cash receipts and transactions in the form of purchases – are the most demanded by retail stores.
One of the most popular, easy-to-use, and effective segmentation methods to enable customer behavior analysis is the RFM analysis, which stands for Recency, Frequency, and Monetary. This analysis is a marketing technique used to quantitatively determine which customers are prioritized by examining how recently a customer has bought, how often they buy, and how much the customer spends. The analysis is used to, on the basis of transaction data, distinguish active customers from average and inactive customers based on visitor statistics and transaction data, ie cash receipts.
Analysis using transactional data is crucial, but just as important is the use of more data to utilize all the opportunities it the store. These insights are possible to acquire with the help of Indivd-X.
1. More advanced people counting.
When it comes to calculating the number of visiting customers, retail stores mainly use simple visitor counters to get an assessment of how many customers enter the stores. These visitor counters have fairly good accuracy and measure the flow of people in and out of a store. Another pronounced problem with the visitor counters used today is also that they are very unreliable with low credibility as a result. They do not track the number of individuals in the store. What stores really need to understand is how many visitors they have and how long they use to stay.
2. Customer retention
Customer retention is a crucial insight, as all stores want to improve customer satisfaction and thereby increase the number of returning customers. This insight is used to measure customer lifetime value and how relevant the store is and it correlates closely with the store’s profitability.
3. Detailed customer journey
The interest in the customer journey has gained momentum with digital development in stores. But here it has also come to a halt. It’s easy to understand how marketing activities drive consumers to websites, but it’s not as easy to understand how it works for customers in stores. Each customer journey is unique in today’s digital business economy. A detailed customer journey is needed to understand what customers want to achieve through their store visits, and what resources they use when trying to solve their needs. This insight is then used to take actions that lead to an improved customer journey. Equally important is to understand which shelves are visited, how many people that stayed there, and how many interacted with the shelf.
This insight is usually equivalent to conversion ratio and gives an understanding of how many people choose to leave the store without buying anything. This insight together with retention can be powerful insights to keep track of – especially important for fashion stores.
5. Target group segmentation
Every brand and store is built for specific target groups. That is why it is crucial to create target groups and understand how these experience your store. These segmentations can be built by using the four customer insights above together with age and gender. But they can also be used in a more complex way.
Insights are essential for profitable and efficient stores
Data quality is of course necessary for the collection of customer insights and timeliness is just as important. Insights also become more valuable over time. Data over time should be used to do monthly comparisons, understand changes, and to make forecasts. This is why profitable and efficient stores are difficult for retail stores that do not have direct and uninterrupted access to current data. At the same time, more data is not the solution but using data for improved actions is.
– Every new customer insight is only useful if it provides a basis for a decision or drives an action, says Fredrik Hammargården.