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Annual Report for FY23

Eagle Eye Annual Report FY23

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3 min read

How to use Customer Data to Boost Sales and Enhance Shopping Experiences

How to use Customer Data to Boost Sales and Enhance Shopping Experiences

In today's retail landscape, data reigns supreme. It's not just about what you sell but who you sell it to. One of the most critical lessons I've learned throughout my journey in retail marketing is that you manage what you measure. In this blog post, we will introduce the transformative power of data in retail, how it can be used to shape the shopping experience, and why every forward-thinking retailer needs to embrace a customer-centric approach across every aspect of their business.

A New Lens: The Customer's Perspective

It's time for retailers to shift their viewpoint. Step into your customers' shoes and see your business through their eyes. Too often, executives project their experiences onto their customers. The key here is to generate data-driven insights rather than using gut feeling to truly enable you to understand your customers’ behaviors and motivations and use that understanding to enhance their future experiences with you.

Linking Customer Insight to Sales

Becoming a customer-centric business starts with connecting purchases to individual customers, typically via an engaging, omnichannel loyalty program. To ensure that you capture as much data as possible, your program should incentivize customers to identify themselves with every transaction, typically offering the ability to earn currency (points, cashback) or instant discounts or perks if they do so.

Once you have a solid foundation of customer data, the first step we recommend is using it to identify your best customers, understand their preferences, and tailor your offerings accordingly. Measure the impact, optimize your strategy based on your learnings, and go again, including the next cohort of customers too. Rinse and repeat.

The Power of Data in Decision-Making

Using customer data to inform your decision-making across every aspect of your business, from pricing to promotions to ranging and more, is critical to success. Without it, you are operating in the dark. Before making any decisions, remember to ask yourself: Is this the right thing to do for our customers? And make sure you have the data to prove it.

The examples below illustrate how customer data can benefit decision-making across various areas of a retail business:

Data-Based Ranging: Customer data is a treasure trove for retailers looking to optimize their product range. Let's take sparkling wine as an example. Most customers flock to promoted items within this category, showing little brand loyalty. But imagine if there was an exception to that rule, a specific product within the category bought exclusively by the top 5% of your customers? Working using just sales data alone, you decide to de-list that product based on the fact that it sells in very low volumes, and you imagine that the category as a whole will continue to perform well without it based on your successful promotional calendar. And how wrong you could be. Removing this product from the range could put you at risk by alienating some of your most valuable customers, and ignoring them in this category puts you at significant risk of losing them in others, potentially forcing them to move their entire basket to your competitors. Data empowers retailers to protect and tailor their product range based on customer insights, delivering the potential to provide a better shopping experience for all.

Data-Based Pricing and Promotions: Traditional pricing initiatives focus on staple products - key value items affecting most customers. But what if you could understand and target the most price-conscious shoppers? Investing in price cuts on products frequently purchased by your most budget-conscious buyers can create a disproportionately positive impact for them, engendering their loyalty. Leading retailers globally are already adopting personalized pricing initiatives, with these businesses using advanced analytics and AI to determine the optimal price discount on specific products for specific customers, ensuring that they maximize the bang for their buck regarding promotional spending and performance.

Data-Centric Supplier Relationships: Many retailers are already tapping into the potential of customer data to strengthen relationships with their suppliers. One way to do this is by sharing customer data with suppliers, enabling them to understand how the retailers’ customers are shopping within their categories to work more closely together, aligning their objectives based on how best to serve their shared customers.

In addition, retailers can also provide their suppliers with the ability to run personalized offers to specific customers, allowing them to execute marketing campaigns based on the insights they have derived from the loyalty data they have been given access to. This approach leads to a win-win-win scenario: suppliers gain deep customer insights and the ability to action them meaningfully, retailers unlock a new, profitable revenue stream and build closer relationships with their suppliers, and customers enjoy a better, more personalized shopping experience.

I hope we have illustrated that customer data is the critical currency in the retail world. Retailers who harness the power of data-driven strategies are better equipped to meet their customers' diverse needs. This boosts sales and enhances the overall shopping experience, engendering customer loyalty. In the age of data, retailers that truly understand their customers will thrive in a fiercely competitive market.

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