Gaining deeper customer insight is the key to gaining a competitive edge in the retail industry, according to “Understanding the Customer,” the first of three parts from a new Economist Intelligence Unit report titled “Intelligent Merchandising: Creating a Unique Shopping Experience.”
To identify and understand their best customers, companies most frequently track purchasing records through loyalty cards (40%).
Other popular methods are surveys (26%) and incentive contests (15%). Only 9% of respondents examine complaints and returns as a way to improve their performance.
Other key findings of the report include the following:
- Retailers opt mostly for traditional methods to keep customers loyal. Over half of the executives surveyed use new products (63%), local store activities (56%) and discounts for special customers (52%) to enhance customer loyalty.
- Customer satisfaction and retention are key measures of the success of promotional efforts. The success of promotions is tracked through customer satisfaction (55%), customer retention (52%) and sales per square meter of retail space per week (40%).
- Executives rely heavily on sales staff to monitor the “customer experience.” The lowest-paid member in the retail industry is considered the most reliable observer of customer behavior. In-store traffic (31%) and customer opinions (31%) are seen as important indicators of customer satisfaction.
About the study: The report is based on a worldwide online survey of 180 senior retail executives conducted by the Economist Intelligence Unit for SAP. The executives were also interviewed for more in-depth responses and analyses.