Apparel retailers are seeing sudden reversals in shopping behaviour as nervous consumers react to the cost-of-living crisis. Responses to a brand can vary greatly among individuals and change over time, resulting in a fragmented customer base where even those who regularly purchase the same brands may exhibit conflicting behaviours.
- Shopping less frequently with higher basket values
- Seeking long-term value in the luxury sector
- Simply spending less
How do retailers split messaging and merchandising to connect with these disparate and shifting groups of customers?
The limitations of Single Customer View (SVC)
One traditional way of addressing a disparate customer base is Single Customer View (SVC), gathering data to attempt a holistic, unified view of individual customers, and then creating segments based on selected traits and marketing to those segments.
Single Customer View platforms give retailers oceans of data and can enable useful personalised offers for customers. But for a large apparel retailer, trying to understand and react to the behaviour of individual customers is almost impossible. There are serious issues with SVC:
- Lack of context - SCV records a customer’s interactions with a brand but doesn’t consider the why? of those interactions - the context.
- Limited actionability – SCV provides detailed data on individual shoppers but no actionable insights for improving their customer experience.
- Lack of insight – SCV shows how a customer has behaved in the past but can’t predict behaviour shifts due to outside factors.
SVC is expensive and complex, as apparel retailers scramble to predict and personalise their entire customer experience every month, reacting too late or ineffectively to changes in customer behaviour.
Humans change their behaviour in response to outside stimuli. A person might wake up in one mindset, their normal default, but switch mindset as external factors interfere, such as:
- reading an article about sustainability
- opening a disappointing pay packet
- washing machine just broke.
It’s impossible to know the context and motivation behind changes in individual shopping behaviour, so segmenting your customers based on this data is risky. When a customer changes behaviour, they may no longer respond to your carefully thought-out marketing to that segment.
Solution: use Customer Story
Apparel retailers should move away from trying to second-guess individual customers. Instead, we recommend using Customer Story to transform customer experience.
Customer Story is a method of segmentation that groups customers by the goal they are trying to achieve when they shop, combined with the mindset and needstate they are in at the time.
You should start this process by thinking about what kind of Customer Stories exist around your business, particularly those most profitable to you. Some examples for a high-street apparel retailer:
Goal: Party outfit
Needstate: I can’t afford much
Mindset: I still want to feel good about the way I look
Goal: School uniforms for the kids
Needstate: Our bills are going up, we’re on a tight budget
Mindset: I’m hyper-aware of delivery and return costs
Goal: Winter coat
Needstate: I have disposable income but I’m cautious about the future
Mindset: I can justify investing in aluxury brandif I can wear it for several years
Once you have your list of common / profitable Customer Stories, you can optimise your customer experience for those Stories.
The key advantage of this approach over SCV is that it doesn’t matter if individual customers switch behaviours. They are switching from one Customer Story to another, and if you have designed your CX to cater for those Stories, you are less likely to lose that customer to a competitor.
You know for certain that a proportion of your customers will fall into a Story at any one time, even if individual behaviours shift.
Responding to macro-economics
The advantage of using the Customer Story approach is that it is responsive to external macro-issues. You can identify customer stories around those issues and design CX to fit them.
- What Customer Stories are there around sustainability awareness?
- How are certain Customer Stories affected by fuel rate increases?
- Does unusually cold weather change this Customer Story?
Using Customer Story to plan your CX means you can adjust strategy to appeal to diverse and shifting groups of people, making marketing and merchandising more reliable and responsive.