Guest Column | May 26, 2021

What Type Of Shoppers Are Your Marketing Strategies Creating?

By Fayez Mohamood, Bluecore

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There are two types of brands: those that know what their customers want and those that don’t. But knowing who their customers are and being able to use that information to influence how they shop are two completely different competencies.

The acceleration to digital has made it crucial for brands to understand more than who their customers are: they need to know how they can provide value to them and keep them engaged over time.

Just like there are two types of brands, there are two types of shoppers: those driven by promotions, and those who make informed purchases based on understanding a brand’s promise and the value their products add to their lives.

Promo-driven shoppers are reactive: They’re typically driven by incentives—such as sales or discounts. And they aren’t loyal. Repeat purchases from this type of shopper generally only occur when there’s another incentive, and even this can be rare. Converting a promo-driven shopper into a full-price shopper is next to impossible.

Informed shoppers, on the other hand, are proactive: They’re engaged with a brand and driven by loyalty to its products and the experience it provides. Repeat purchases from this type of shopper are common, and they’re willing to pay full price — without needing an incentive.

But here’s the crazy thing: a shopper who makes informed decisions with one brand, might act like a promo-driven shopper with other brands. Reason being, retailers’ marketing strategies determine the type of shopper they create.

Here are three ways brands can increase their ratio of informed shoppers to transactional shoppers:

  1. Only provide discounts to those who need them to convert. (Don’t unknowingly turn informed shoppers into promo-driven shoppers.)
    To drive profitability in a digital-first environment, brands need to preserve margins by moving away from heavy discounting. They also need to prioritize increasing repeat purchases, given that 80% of shoppers currently only buy once--but second-time buyers’ lifetime values are almost double that of first-time buyers).

Traditional marketing strategies have naturally prioritized acquisition and reach because the technology powering them was built for volume. This was historically handled through mass marketed deals and blanket discounts, inadvertently driving acquisition costs up with even longer payback periods. But this isn’t always necessary when brands know what actually provides values to their customers.

Consider Beth, a twenty-something shopper who struggles with finding the perfect fitting pair of jeans in the right material. She occasionally shops at Brand A in-person, when she sees a massive “SALE” sign in the window, or online, when they send her discounts, but she doesn’t love any pair of jeans she’s bought from there. This makes her a promo-driven shopper for Brand A. On the flip side, she follows Brand B on Instagram, always reads their emails, and refers friends to their reward program to get more points. The jeans are pricey, but she likes the fit and connects to the brand’s mission, making each purchase worth the price tag. This makes her an informed shopper for Brand B.

Informed shoppers will buy something they value at full price. Sending them blanket discount codes to drive a single purchase is a wasted touchpoint and unnecessarily shrinks margins. Each discount can detract from creating the right habits for loyalty and growing a retailer’s informed customer base. By unintentionally turning these folks into promo-driven shoppers and decreasing likelihood that they’ll purchase again, brands are keeping themselves from driving lifetime value and, more importantly, profitability.

  1. Speak informed buyers’ language by showing that you know them. (They want to know that the brands they shop with are informed too.)

A recent report by Google depicted a shift in consumer preferences through the popularity of search terms: worldwide, the search term “best” far outpaced “cheap.” Brands can’t make assumptions that discounts and convenience are the main factors in getting a shopper to convert. A prime example is the spike in loungewear as a result of the pandemic: consumers are now spending $175 on sweatsuits to work from home, simply because these products provide value and meet a specific desire.

An array of factors influence individual shoppers’ preferences and affinities. By knowing what those things are, brands can prioritize which of their own authentic messages they use to communicate to each shopper. Consider, for instance, a sustainable apparel brand that’s communicating with shoppers who value sustainable supply chain practices. For these shoppers, they might highlight which products are locally made and reinforce their commitment to maintaining a low carbon footprint.

For shoppers who like exclusive perks and access, this same brand might instead lead with its extra rewards points program. And still the same brand might emphasize marketing messages about how its clothes fit to shoppers who are uncertain about sizing.

For the remaining shoppers, whose purchase decisions simply come down to price, this brand could and should offer a discount if they know it’s the only thing that will influence their decisions to convert.

In each scenario, the brand is tailoring an authentic value proposition to consumers on a 1:1 basis. Nurturing informed buyers means brands must take what they know about individuals and marry that with product data to show them what they’re interested in, what they’re most likely to buy next, and then wrap all of that up in the right packaging to appeal to them.

By pulling on value-based levers rather than disproportionately relying on discounts, brands will protect margins and encourage repeat purchases.

  1. Informed shoppers are fluid and evolving. How and where a brand speaks to them should be too.

Between 2013 and 2020, time spent online almost doubled, from four to seven hours. The number of smart devices has grown from one to between three and seven. Time spent online has skyrocketed from 8% to 54%, with online now becoming the default method for discovery, evaluation, and purchase.

This dynamic environment makes moving at the speed of the consumer crucial for retailers. Brands’ messages need to not only be targeted to the individual; they must be constantly evolving as their customers do. This means that systems must be in place to automatically change these communications as brands gather and process more data.

Consider the curated recommendations that consumers receive from Spotify and Netflix, or the personalized experiences they get while scrolling on TikTok. These platforms don’t just show shoppers things they know they’ve liked in the past: they predict what they’ll want to be next. And they’ve got a good track record of being right.

Brands must similarly adopt the mindset of showing shoppers what they need before they even realize it — be it through dynamic content, a product recommendation, or another hyper-curated experience — and deliver this at the right time, on the right channel. While price lures promo-driven shoppers, informed shoppers are more tuned into the experience and actually demand relevant curation in order to engage with a brand.

This can be done through investment in machine learning and AI-powered technology that can aggregate, organize, and activate shopper data at scale, automating relevant, unique experiences.

With shoppers receiving millions of marketing messages a day, the key to successful digital transformation is understanding the breakdown of a retailer’s consumer base. Doing so means processing billions of interactions they’re having with products. From there, brands can offer them exactly what they need and keep them coming back again and again.

About The Author

Fayez Mohamood is CEO & Co-Founder of Bluecore.