From offering insights into shopping behaviour to providing personalised recommendations for customers, Rachel Badham explores how consumer data can drive loyalty
Customers are often quite forthcoming when asking for feedback,” says Fran Underhill, sales & marketing director at Naked Wines UK. “Before you take up their time, you should ask yourself what you’re going to do with that information once you have it.”
For membership-based retailers such as Naked Wines, using consumer data effectively is pivotal in improving the shopping experience for customers, according to Underhill. But beyond membership-centric business models, consumer loyalty can be just as crucial in inspiring new shoppers. So, how can retailers make the most of consumer information?
When it comes to harnessing the power of customer data, Underhill says it is vital to create a business plan prior to data collection.
“If you don’t know what you’re going to do with the data, you should spare them the effort. If, on the other hand, you’re excited by the ideas and opportunities that spring to mind, then fire away and reward your customer for sharing that insight.”
The notion of rewarding consumers is a key factor in growing a loyal customer base, with Underhill noting the importance of guiding shoppers towards the right products through unique recommendations.
To offer consumers the most suitable recommendations, Stuart Brown, head of ecommerce for Virgin Wines, says retailers need to draw on several factors involved in the purchasing journey.
“Knowing what products a customer wants to purchase, and when, and how often they purchase, is key to driving loyalty,” he says. “We combine data on historical purchases, browsing behaviour and purchase frequency to ensure customers are getting the right deal on the right products.”
Wickhams director Dan Farrell-Wright explains that the online wine retailer uses customer data to segment shoppers into categories.
He says: “Some of the ways we create these segments involve style, so are you more likely to buy red wine or white wine? Then price is another one, so we look at whether you’re likely to spend less or more than £10 on a bottle.
“So we can, for example, target someone who buys Malbec for under £10, and use that to provide personalised recommendations via email.”
For Wickhams, marketing emails provide a point for further data collection, with the merchant tracking click-through rates to analyse the success of the recommendations.
“We have a very clear metric that we work through so we know how much return we should get from each of those emails,” says Farrell-Wright, who emphasises the importance of continually evolving the marketing strategy in line with consumer data.
And as much as rewarding customers has proved important for retailers such as Naked Wines, giving shoppers control over their data seems to be of equal value when it comes to encouraging brand loyalty.
“It’s important to make sure that you’re transparent with your customer – the customer has to trust you, and they need to know what you’re doing with their data,” says Farrell-Wright at Wickhams.
“A lot of people have concerns around data harvesting, so you need to communicate with your customers that the data is being used internally to help them discover great wine.”