Every customer is different, but during an economic downturn these differences can multiply. According to Deloitte, only 50% of consumers reported having money leftover at the end of a month and 20% were concerned about making upcoming payments. This sentiment is to be expected as inflation is still lingering around 6.5% and a potential recession is looming.
However, the same study from Deloitte also found that 49% of consumers surveyed said “I can afford to spend on things that bring me joy.” This answer indicates a higher level of disposable income and a more hopeful outlook.
So how can retailers make the most out of their relationships with both types of consumers? Let’s find out.
Introducing True Personalization
In a world where every shopper has different priorities, interests, and budgets, true personalization is critical to forming long-lasting shopper relationships. True personalization goes beyond segmentation to link individual shoppers with promotions created specifically for them, instead of creating deals for a group of similar shoppers.
These individually created deals are generated from historical customer purchase data and preferences. Personalized promotions are more effective at encouraging money-comfortable shoppers to spend more on items they will love, while helping money-conscious shoppers find the deals on the items they need.
Achieving true personalization requires artificial intelligence. AI can be used to review the customer data and generate promotions automatically, saving the time and manual effort typically spent comparing customer segments or preparing a weekly advertising circular.
In addition, AI-driven promotions can incorporate recent changes and irregularities in a shopper’s behavior. For example, if a shopper loses their job and starts buying store brand products to lower their total basket cost, AI will pick up on this pattern and begin issuing coupons for cheaper alternatives. Similarly, if a shopper is doing well financially and begins purchasing more expensive, organic options, the AI will recommend products of that same value and price range.
Incorporating Unique Customer Touchpoints
Retailers must find new and effective ways to incorporate true personalization to existing touchpoints to reach both sides of the financial aisle. This can come from unique marketing strategies across a variety of touchpoints both online and in-store. For instance, if a shopper is prioritizing finding the best deal to offset inflation, the retailer might benefit from sending an in-app promotion where the discount is showcased in big, bold letters.
On the contrary, if a customer is open to products from a variety of price ranges, they might respond better to an email with the latest new products, even if the price isn’t highlighted. The type of promotion and the method of outreach contribute greatly to the success of personalized promotions.
Learning What the Customer Values
To make the most out of every customer relationship, retailers must engage each shopper based on their individual needs. With AI, this once-overwhelming task is both manageable and effective. During times of great financial disparity, marketing to polarized customer audiences can greatly improve customer relationships and profit margins.
— Shekar Raman, CEO and Co-Founder, Birdzi