The consumer’s behaviour in a recession is markedly different from that in boom times, so marketers must change their behaviour as well. The importance of the data that you use to underpin every marketing communication you execute will grow significantly in 2009. History is taking on a new meaning. The question of whether we can still predict consumer behaviour, based on how those same consumers acted in the past has never been more relevant. Demographic indicators are shifting as fast as changes to observed behaviour. Consumers are changing their lifestyle and leisure habits as well as their purchasing behaviour.
And this is not likely to be just a short-term issue. When we exit out of the other side of this gloom, consumers may consciously decide not to drop all of their new habits and revert back. If a family is currently saving 30% of its weekly grocery budget by splitting its shop between its regular supermarket and Aldi or one of the other hard discounters, why would it change tack when the good times come back?
Does this mean all your previous data is worthless? No, but it does mean that you need to use it more cleverly. For example, if your new commercial strategy is to focus on customer retention, then your data is going to be the best source of information on where you can squeeze extra spend from your highest value and most loyal customers. Loyalty schemes, CRM and extra value for those of your customers who deserve to be treated may become more prominent elements of the marketing mix going forward.
For a good example, see Sainsbury’s. The retailer is doing far better than it was expected to in such mean times. Much of that success and resilience against a tough market can be attributed to the guile of chief executive Justin King. King won’t have seen the credit crunch coming when he devised the Make Sainsbury’s Great Again programme on his arrival in 2004, but it hasn’t sidetracked him. Now, about to unveil a fresh ten-year strategy to see his chain take on the might of Tesco, King – perhaps recognising that he, his director of brand communications Helen Buck and Jamie Oliver have taken Sainsbury’s as far as they can without help – is restructuring his marketing department.
It is not clear how the new department will fit around the appointments of outgoing Boots marketer Claire Harrison-Church and former Tesco Clubcard boss Andrew Mann but the fact that Mann’s post – director of customer insight and loyalty – is new, speaks volumes. Tesco built its empire on getting to know its customers on a personal level and using the data it received to innovate and personalise in terms of what it offered shoppers. Though Harrison-Church replaces Buck in the big job (Buck is moving to the role of trading director for the newly-formed grocery unit), Mann will be all too aware how key his role is in King’s eyes.
While retailers are investing in cheap, short-term solutions such as promotions, vouchers and money-off coupons, it is the strategic long-term moves that will pay off when the good times return.