With the rise of web 2.0 and social networking, price comparison sites and online discount codes, retailers and home shopping brands must adapt quickly in order to connect online with today's 'empowered consumer', according to a report by Experian.
The report, entitled 'Engaging online with the empowered consumer', found that consumers are now expecting greater value for money as well as better levels of service from retail and home shopping brands.
Experian warns that many retailers and home shopping companies are failing to live up consumers' multi-channel expectations. Using the home shopping sector as an example, Experian's found that:
- 45% of customers are single purchasers, with figures rising as high as 75% in some cases;
- 60% - 70% of so-called 'best customers' had not purchased in the past 12 months, signifying that companies are taking one or two seasons to recognise that high value customers have lapsed or defected;
- 30% of customers generate nearly 70% of the sales revenue.
The report suggests that brands should try to encourage repeat purchasing and loyalty by blending offline and online insights to decide how and when the company should engage with increasingly savvy customers. For example, research by Experian's Hitwise business unit found that online shoppers are evolving, with 27% of online shoppers being aged 55+ in 2008, compared to only 12% in 2005.
According to the report's authors, the biggest problem is that, while many companies have a multi-channel marketing strategy in place, more often than not it operates in isolation from the rest of the brand. The end result for the consumer is a fragmented experience, often with inconsistent service levels and value propositions depending on which channel they use.
Marie Myles, director of marketing consulting for Experian's integrated marketing division, concluded: "The fact that online retailing has grown by 40% in the past 12 months underlines why brands must change the way they communicate. While 'wow factors' will be memorable and generate conversations, innovations in marketing and brand loyalty will be lost if the basics continue to be ignored."
Indeed, greater emphasis should be placed on the exploitation and application of existing data assets, because the insights that can be derived from them, combined with a move to a better-coordinated customer contact strategy, will lead to more profitable and longer relationships between brands and customers.
The report has been made available for free download from Experian's web site - click here (free registration required).