Happy New Year! Now that the calendar has clicked over and we’ve entered a first quarter unlike any other, I find myself reflecting on how retailers and grocers can balance priorities this year. It feels as though we’re living in an era of extremes, and I’m not even talking about politics. Take the Covid crisis – our options framed as either open economy or lockdown, personal freedom or public safety. This month’s consumer behaviour seems to be similarly divided; either they’re still embracing the quarantine lifestyle and getting home deliveries of wine and packaged meals, or rushing back to January-as-usual shopping for healthy food and fitness memberships.
As I hinted in my last column, I recognised this dynamic at play in The Social Dilemma, a film mainly about the perils of social media but driven by the tech companies’ remorseless focus on KPIs at the expense of just about any other consideration. Embracing data-based approaches is good; succumbing to the tyranny of the KPI is just another form of extremism.
We’re not innocent of these either-or dichotomies in the retail and grocery industry. There’s a sense that you can be either entirely transactional, price and performance-driven, or focused on customer satisfaction, and perhaps less financially successful.
That’s too many either-ors. Too many extremes. We need to find some balance.
Which leads me to a technology-focused book I read over the holidays, No Filter, which looks at Facebook’s acquisition of Instagram and its transition as a company since then. It paints a picture of Facebook as a business run by engineers, while Instagram is run by marketeers, mirroring the KPI-focus vs customer-focus tension we see in our industry. Although not all of Facebook’s KPIs are financial, they directly translate into financial metrics, and the merged company needed Instagram’s commitment to preserving a positive user experience. It can’t be all about the numbers; customers and staff must also figure into the balance.
Retailers have an opportunity to strike this balance. Readers of my column will know that I believe the most successful businesses are guided by customer data and deliver personalised, real-time marketing through direct consumer connections. But in a data-driven, digitally-connected world, retail brands still often choose a ‘transactional’ or ‘emotional’ approach to customer relationships and loyalty. That’s just another either-or. What retailers and grocers need is the right balance between their identity as a business and an assessment of what appeals most to individual customers. An old truism of loyalty marketing is to reward and thank your super-loyal customers and transact with your transactors. That works. That’s balance.
Getting this right is extremely important because the way you treat your customers digitally will make you stand out as a business. If you do it well, you will have a highly satisfied and motivated customer base for your retail operations and a valuable, revenue-generating digital audience to inform strategic decisions and market to directly.
Achieving this balance and becoming a brand that is both data-driven and much-loved will require the marketers and engineers to work together, not in tension. Is that sort of co-operation achievable in 2021? I say let’s find out.