How Customer Data Is Helping Retailers Stay Relevant During Covid-19
As consumers shift their behavior to cope with constantly shifting circumstances, how might retailers best detect and respond to their changing needs? Consumer behavior has never been predictable, but understanding the mind of the American consumer is becoming increasingly important—and difficult. What will they spend more on? What will they cut back on? How will the mix of in-store and online shift over time?
Nielsen recently issued a report identifying six trends that are directly tied to concerns around Covid-19: proactive health-minded buying, reactive health management, pantry preparation, quarantined living preparation, restricted living, and living a new normal. These trends correlate directly with news cycles—showing that people react to what they hear and their reactions bring about shifts in consumer buying behavior and in the actual supply chain.
Facing razor-thin margins combined with rising customer expectations, some retailers were quicker than others to adjust their approach. Global pandemic or not, the real retail winners in all of this are the companies that use data to their advantage—building a deeper understanding of their customer—to build long-term loyalty. Let’s take a look at a few.
EO Products: Agile Response to Changing Consumer Behavior
Understanding consumer preferences and the customer journey has always been important, and companies who react quickly to changes can benefit their bottom line. Sometimes it’s just transactional data—products sold—that signifies that something is shifting in the marketplace.
As Covid-19 hit the United States, reports indicated that in one week, the demand for hand sanitizer skyrocketed by 1,400% from December to January. EO Products—a beauty and personal care company located in the San Francisco Bay Area—saw this spike in demand for its niche products, and rapidly increased its production of hand sanitizer by 1,600 percent.
“We are changing our production rates daily if not hourly,” company President Tom Feegel told Forbes. Two thirds of their employees are working from home, while the others are producing more and more hand sanitizers and soaps. According to Feegel, “The brand is running extra shifts, speeding up production lines, hiring temporary workers and converting factory lines designed for other products, to meet the increased need for hand sanitizer as its top priority.”
For all companies, product mix relies heavily on production capacity, but truly nimble companies can adapt to sudden changes in consumer preferences—such as the spike in demand for hand sanitizer and soap over hand lotions and fragrances—and come out on top.
Summersalt: A Brand Offering Emotional Support
Summersalt, a swimwear startup, had a different approach to meeting customer needs in the age of Covid-19. The company announced a free text message hotline—dubbed “Joycast”—that shares uplifting content, such as good news, meditation videos, self-care ideas, and puppy GIFs. In other words, they’re tapping into their customer support channels to provide comfort to shoppers, AND not losing touch with customers who otherwise wouldn’t be needing new swimsuits because of lockdown restrictions.
The company was already a swimwear innovator, with a design library of over 10,000 shapes and a patent on recommending garments based on body shape and consumer preferences. They’re known for touting a “data-backed fit,” and their website boasts that the company “took over 1.5 million body measurements from 10,000 women to inform the Summersalt fit.”
As Lori Coulter, Summersalt’s co-founder and CEO, told Fast Company, “Joycast was also an effort to get creative during a period that is likely to bring unprecedented challenges to startups in the direct-to-consumer industry, which has grown in the years since the last recession. Most brands in this arena haven’t experienced the kind of fiscal crisis or economic downturn that experts say is around the corner. During this period of social distancing, many DTC brands expect to see a reduction in sales, and efforts like these allow them to stay on consumers’ minds, even when they’re not in the mood to shop.”
What’s noteworthy about Summersalt’s strategy is that while the ultimate goal is to sell swimsuits, they’re also trying to respond to their customers’ other unmet needs: like social engagement. With many public spaces still closed and so many people working from home, it stands to reason that prospective customers might be feeling lonely and isolated. “We have a lot of grad students getting degrees counseling or [who] happen to have degrees in counseling,” says Coulter, pointing out that empathy and communication are key in customer service. Of course, if a text or email indicates a critical mental health issue, a team member directs that person to an organization that provides relevant services.
Moda Operandi: Speeding the Delivery of Runway Styles to Fashionistas
Agile retailers aren’t always in crisis mode, of course. Earlier this year, fashion upstart Moda Operandi raised $100 million for its ecommerce platform—and they’re an interesting example demonstrating how to track consumer tastes. The company sells its clothing through online designer trunk shows that last two to four weeks. Customers can preorder the styles they like straight from the runway, without the usual months-long waiting period, and without having to go through retailers.
Connecting consumers directly to the designers was the brainchild of company founder Lauren Santo Domingo. As a longtime fashion industry veteran, Santo Domingo was able to see designs on the runway long before they made it to retailers. Over time, she perceived that there was a disconnect between what she got to see and what the end consumer got to see.
Speaking at the Cornell Tech @Bloomberg Speaker Series, company CEO Ganesh Srivats points out that trends change quickly. “It’s hard to predict what consumer preferences are going to be. The more differentiated an item, the less likely they are to invest in it because it’s hard to forecast demand. And in a sense, this skews most of the fashion industry’s investments into things that are safer.” In other words, buyers were forced to hedge their bets on what they thought would sell.
“It’s the consumer whose choices and tastes are circumscribed,” he continues. “And the creator and designer who put a lot of love into creating this collection, much of which will never see that light of day.” At Moda Operandi, the philosophy is to let the consumer decide what they like, and as such, the company uses data in a highly innovative way to predict trends, sales, and revenue.
When the company decided to launch its own boutique business, the team knew exactly how to determine the product mix. The company saw that items selling well in trunk shows would later sell in its boutiques.
“The metadata we collect on all the customer purchases is a strong indicator of future fashion trends,” says Srivats. “Not only do we know the individual items that are going to be successful or certain designers that are going to have a huge season, but we can also somewhat tell the colors, fabrics, silhouettes, and patterns that are going to be big trends in the future—six months from now.”
The Last Word
Every piece of data—from transactions to marketing campaign engagement to macroeconomic data—can be used to help businesses understand their customers, and change their strategies accordingly. A data-driven approach allows companies to more deeply understand their customers: their preferences, their behaviors, their touchpoints, and their unmet needs.
With companies vying for consumer attention, retailers need to get creative in their approach. Unified customer data helps companies increase loyalty—and makes their customers feel known and seen. Advanced martech can help companies get to know their customers’ needs more deeply. Treasure Data is an enterprise-grade customer data platform (CDP) designed to unify, analyze, and activate data—so you can build customer experiences that wow every customer. Request a demo today.