Fifteen years ago your target demographic of 25-40 year-olds shopped at brick and mortar stores, or phoned in an order from a catalogue. Online shopping was in its infancy; Amazon was still selling mostly books online and was only just branching into the myriad of products it now offers.
Today, that same demographic is buying online from their mobile phones and clicking buy buttons on their Snapchat or Pinterest apps. Their expectations of variety, delivery and service from retailers have skyrocketed. So what will the customer of the future be like? Who are they? Where do they shop? How will they engage with you?
Because as your demographic gets older, another group of young, more tech savvy 25-40 year-olds moves in. Customers who didn’t even know what a chatbot is are suddenly replaced by those that expect to see them on every site.
The customer of the future is a moving target, and you have to constantly adapt to changes to your customers’ preferences – both product-wise and delivery channel wise.
John Lewis is a good example of a retailer which is following its customers’ likes and dislikes. It analyzes shopping data to determine where and how shoppers connected and the reasons behind it.
For example, John Lewis noticed that the young Royal Prince George’s traditional outfits led to increased sales of boy’s navy knitted jumpers by 69% and red cords by 60%. And that David Beckham’s extravagant 40th birthday party, plus a wider trend in international eating, led to an increase in the choice of Moroccan inspired tableware. This helped the retailer to refine its inventory and offerings based on current trends.
The retail graveyard is littered with those who failed to recognize when their demographic was changing. Blockbusters did not realize that its customers were no longer relying on renting DVDs from stores; they were instead streaming them from Netflix and Amazon through their laptops.
BHS did not realize that its run-down stores, awkward layouts and not-trendy-enough products were turning would-be buyers off.
They failed to change with the times, standing still while their customers changed. They did not futureproof their technology investments. They missed new revenues from new opportunities. They neglected to interact with their customers the way their customers wanted to interact.
Just because it worked in the past, does not mean it will work today. For example, Millennials have been flocking to larger cities to live and work where there is good public transportation. As a result many do not have cars – or even drive – so click and collect is increasingly unpopular. They prefer to have items delivered to their homes, but only when they are actually there.
So, if you were counting on the next wave of your 25-40 demographic to want click and collect, you would lose business to businesses with better delivery services.
The way to stay ahead of your competitors is to stay on top of your ever-changing demographic. In order to do that you need a flexible and agile technology platform that can move with the times and quickly take advantage of new revenue opportunities.