The retail landscape is undergoing seismic shifts across all fronts, and stores across the country must continually find new ways to balance existing customer loyalty against attracting a new and sustainable customer base to carry them into the future. One of the keys to achieving that balance lies in lifestyle profile spending.
Demographics Just Aren’t Enough
Historically, marketers looked at simple demographic data when developing customer profiles. Customers were placed into buckets based on straightforward factors like gender, age and income, because those were the factors that could be measured at the time.
Data is getting richer by the day, and those basic categories aren’t enough to allow marketers to develop relevant communications that resonate with customers. There was a time when you could assume that adult empty-nesters over the age of 55 would wouldn’t buy a pair of ripped jeans. Now, it’s not safe to make such assumptions.
Today, it’s less about what their demographics tell you and more about what their lifestyle tells you.
Don’t Judge A Mom By Her Age
Take mothers between the ages of 30 and 45, for example. Thirty years ago, they’d likely all be lumped into one category when it came to something like apparel marketing. They’d receive the same catalogs, the same fliers, and the same offers.
But today, we know that mothers between the ages of 30 and 45 are a vast and varied group. Some moms prefer classic brands and styles. Other moms want to be more contemporary. Some shop on price, others on comfort. And all of them come from a wide variety of backgrounds with varying income levels, family sizes and situations.
For some time, apparel retailers have been struggling with the best ways to connect with shoppers based on their lifestyle. They look to sporting goods as a model of success. Those retailers are experts at marketing directly to golf customers vs. tennis customers vs. hockey customers, etc. But apparel is more complicated than sporting goods. Merchandise turns over multiple times per year, and from one year to the next, styles and preferences can shift significantly.
Striking The Critical Balance Between Existing And New Customers
So how can retailers solve this puzzle? By digging deep. Take, for example, an apparel chain with an older, affluent customer base that falls into a more classic category. Baby Boomers are starting to cut back their spend, putting sales in jeopardy. Yet there is a tidal wave of Millennials ramping up spending. Success depends on the ability to balance the retention of the aging customer base while attracting younger, more contemporary shoppers.
This can be achieved by abandoning traditional notions of marketing to one customer base to the detriment of another. Marketers can stick with what works and continue communicating with their core customer base, but they can also test new strategies to learn how to effectively speak to new audiences. Risk can be hedged by conducting controlled tests based on sound modeling that will predict the best messaging and frequency with which to communicate with potential new customers. Hyper-targeting and personalization that focuses on style preferences uncovered through lifestyle profiles can open new doors and lift sales.
When retailers use data to uncover the nuances of their customer base and personalize communications according to style and preferences, they can achieve that critical balance of maintaining their current and best customers while attracting the customer of tomorrow.