From a consumer perspective, three things underpin the effectiveness of retail media: relevance, experience and loyalty. And new research shows not only how these three factors are connected, but also how they influence different generations buying habits.
The research, commissioned by customer data solutions provider Plinc, surveyed 2,000 people across the UK to discover how companies can raise their chances of earning repeat custom, which by one estimate costs five to seven times less than attracting new customers. It found that preferred methods can vary widely between age groups.
The odds are, in fact, stacked in companies’ favour, since the majority of people (51%) prefer to purchase from brands they’ve already had positive experiences with.
Once they’ve delivered those experiences though, ‘personalised offers, promotions, and discounts’ were ranked by the largest proportion of participants (41%) as the most effective methods of bringing them back for more.
Despite this, only a minority of senior marketing managers in Plinc’s previous research reported having access to data that enables them to make intelligent decisions and act on them quickly.’
The research revealed that this demand for personalisation is being driven primarily by Gen Z and Millennials, 75% and 70% of whom respectively want companies to personalise their website experiences to simplify navigation, for example. Most Gen Z and Millennials (66% and 60%) expect companies to ‘understand their needs and interests’ and recognise them as individual customers.
To meet demand and personalise at this scale, companies must build unified data foundations and create individual customer profiles, which they can use to draw insights.
The good news for retailers is that most people (58%) will hand over their data. However, most are only willing to do so if those companies improve their customer experiences, highlighting consumers’ expectations for retailers to step up and meet them halfway.
The research also reveals important new information about customer preferences for marketing communications.
For example, most people (52%) said that poor communications would likely or definitely put them off buying from the same brand again. And while Generation Z is becoming increasingly open to alternative channels of communication – including apps (30% want communications via this channel), social media (36%), and SMS (23%) – email remains the most popular channel, given preference by 61% of all participants.
It also supports the continued relevance of loyalty programmes, with the majority of people (56%) saying that they would convince them to become ‘brand loyal’. And it’s the younger generations that are most likely to expect this type of scheme, with 71% of Gen Z and 60% of Millennials saying that it was important for brands to offer them.
Stuart Russell, Chief Strategy Officer, Plinc says: “Compelling one-time customers to return again – and then again and again – to purchase from them has become the greatest challenge for businesses today. Customers are becoming more promiscuous, especially during periods of economic austerity, and methods to encourage repeat custom are often obscure. This new research from Plinc will go a significant way to explaining how marketing and CRM teams can adjust their operations to meet customers where they want you.”
