Back to school is the retail year’s second most critical season. It’s thought of as that make-or-break stretch that provides momentum into the holiday season. For several years, retailers have seen changes in the way the back-to-school season behaves. This year will be no exception as e-commerce and convenience plays continue to devour consumer attention and wallet share.
For retailers with a more specialized offering than those of Amazon or Walmart, there’s some good news. By understanding how and where you customers are shopping, you can begin to win back some of that spend. Through analysis of our Checkout Tracking receipt-based data, we’ve seen that back-to-school customers are compartmentalizing their spend, shopping for different things at different retailers, and looking for the best deals.
In one particular case, we found that while customers were doing their high-ticket buying from one retailer, they were shopping the lower-priced items from its competitors earlier in the season. The learning from this: If you know what your customers are buying from your competitors and when, and cross-incent with attractive pricing or bundling, you can capture a bigger piece of back-to-school spend from your high-ticket customers.
One key measure for retailers that is often overlooked is the customer lifecycle. Looking beyond back-to-school, if your average customer visits your store every 60 days, and you are able to see that purchase cycle starting to go off pattern, you can use strategic marketing and promotion activities to entice them back into the store, back on cycle, and even increase their spend.
By doubling down on efforts to retain loyal customers, retailers stand to reap noticeable rewards — a mere 1% increase in spend from that “best customer” group represented a $17 million opportunity for one midsize retailer we worked with. While this outreach could be done intuitively, the retailer that knows their customer’s purchase cycles and takes steps to minimize attrition within the cycle, while trying to decrease the cycle time between customer visits, will realize better gains.
What does this mean…