How the pandemic has shifted consumer behavior—and what retailers can do about it

Online businesses have always had the upper hand when it comes to leveraging and activating rich customer data for targeted digital marketing that drives growth. And with the ongoing pandemic, they’re also enjoying a healthy surge in consumer spending.

Brick-and-mortar businesses, for their part, face tremendous uncertainty with each emerging variant as they continue to adapt to staff shortages, turnover, capacity restrictions and in some cases store closures—all while competing with their online counterparts. Moving forward, one thing is for sure: changing consumer behaviors are the only constant.

All is not lost: by harnessing lessons learned two years into the pandemic, retailers can make key MarTech upgrades and refine their targeting strategies to increase their competitive edge. Let’s review.

Lesson 1: Digital rules the landscape 

Not surprisingly, when it comes to ecommerce, the arrival of COVID-19 converted in-person holdouts to the contactless benefits of online shopping. According to Forrester, 60% of U.S. adults with online access made their first online transactions during the pandemic.

But shopping isn’t the only place where digital adoption has spiked. Consumers have sought out digital platforms for a variety of day-to-day needs.

Where are consumers going digital?

Additionally, omnichannel spending increased more than 70% year over year in Q1 2021 for restaurant, retail and grocery (Fiserv). And with those new online behaviors come higher expectations: six in 10 US consumers expect companies to have strong enough digital resources and capabilities to withstand future global disruptions.

So should brick-and-mortar retailers pack it in and move to ecommerce? No, but digital capabilities that bring you closer to customers and ensure a predictable, delightful experience will help strengthen competitive advantage.

In light of these new digital behaviors and expectations, where should brick-and-mortar retailers focus their attention?

Targeting capabilities: Take a test-and-learn approach and tweak campaign audiences faster with a MarTech stack that includes easy-to-use, personalized omnichannel marketing capabilities.

Omnichannel offers: Connect on- and offline experiences—for example, with online offers redeemable in-store—to address changing consumer shopping habits.

SKU-level analysis: Make informed decisions about product and service offerings using aggregated product and shopping data and a SKU-level analysis of purchase behaviors.

Lesson 2: Loyalty, frequency and basket size are up for grabs

As discretionary spending remains in flux, it’s more vital than ever to make sure to maximize share of wallet and nurture loyalty with new and existing customers. A recent study by McKinsey notes an overall increase in basket size and preference for trusted brands – along with a shift to stores located closer to home.

As a result, retailers across verticals must be aware that their core customers may have shifted significantly in the last two years, along with their in-category share as compared to competitors.

On the whole, consumer spending behavior has become more:

Consumers are being more mindful about their dollars and looking for maximum benefit on every dollar spent.
How can you deliver more value with every purchase?

In the wake of disruption, consumers are exploring new purchasing patterns—meaning their loyalty is in flux.
Are you welcoming new customers while finding ways to re-engage lapsed ones?

Consumers want locally sourced products from stores directly in their communities (Accenture).
How can you personalize online and in-store experience according to customer preference?

Lesson 3: You’ve got to know your customers (and win them back)

In order to compete with ecommerce giants and adapt to changing consumer behaviors, retailers, restaurants and CPG companies need to understand their customers at a much deeper level than before to reach them wherever they are in the sales journey. And trends in customer behaviors pre-COVID no longer provide a reliable basis for a resilient marketing and sales strategy.

For example, a national fast casual restaurant chain found that they had seen a shift in the makeup of their base—losing previously active customers and gaining new ones—since the pandemic began.

Here’s the good news: with major shifts in consumer behavior come new targeting opportunities. Across verticals, retailers who look closer at their data are noticing a shift in the makeup of who their core customers are—and that knowledge is power. Once you understand your new base, you can better engage them while retargeting lapsed or infrequent customers.

But do you have the tech?

 Understanding your new customer makeup and launching refined strategies both start with the right data. But do you have it? If you’re relying on data that unlocks details on loyal customers, whether pre-pandemic or current, you only have half the picture (at best).

Consider the following:

  • What % of your total customer base participates in your loyalty program?
  • What about unknown customers—those that don’t opt in to loyalty?
  • Do you have mechanisms in place to identify and understand them?
  • Do you know what in-store customers are buying, when and with what frequency?

First party data, while a good start, won’t get you all the way there. With the right customer data platform (CDP), you can enhance and enrich your existing customer data to activate the right audiences, make relevant offers to them via online channels and measure performance.

A good CDP should be able to integrate seamlessly and effortlessly with your existing tech stack and ingest data from disparate sources to give you more visibility into your customer data pool.

Start today with Bridg

We help brick-and-mortar retailers identify and understand unknown customers, enhance data on known customers, gain operational insights and deliver more effective, targeted marketing engagements. Let’s connect on how we can help you build anonymous, privacy-safe profiles with SKU-level purchase history and hundreds of enriching customer attributes to power analytics and marketing.

Want to learn more about the power of point-of-sale (POS) data for identifying unknown in-store customers and scaling your loyalty program? Check out our whitepaper here.

Have more questions for us and want to talk? Connect with us today!


Four strategic ways to drive revenue with enhanced first-party data

Changes are afoot in the marketing and advertising world as a key lifeforce fades into extinction: the third-party cookie. Faced with the dilemma of how to continue delivering personalized customer engagements without it, 41% of marketers believe their biggest challenge will be their inability to track the right data (Hubspot).

But what if you already had the key insights you needed to understand your customers and drive revenue from your marketing spend? Let’s explore how enhanced first-party data can help you shed third-party dependency—and what steps you can take to future-proof your MarTech stack and prove incrementality today.

#1: Embrace the cookieless future

Cookies have been a best friend to businesses large and small for years, allowing brands to track web traffic, improve UX and collect data for targeted advertising. But now, thanks to shifting policies and growing concerns for consumer privacy, that’s all changing.

What’s happening, exactly? First, Google plans to phase out the third-party cookie from Chrome browsers and replace it with Topics API. Topics API assigns users a set of topics that represent their weekly interests based on browser history. Sites and advertisers receive three topics that represent their visitors’ interests. Apple, for its part, also now requires apps running on its devices to get consumer permission before tracking their activity. And new consumer data privacy laws continue to take shape across the country with data privacy proposals under review in Massachusetts, New York, North Carolina and Pennsylvania.

What does it mean for brick-and-mortar retail and restaurant marketers? The shift away from third-party cookies represents a major shakeup to targeting strategies, since Chrome comprises nearly 60% of the web browser market, and more than half of all global web traffic (Statista). As new changes take hold, marketers need to prepare their tech stack and corresponding targeting strategies for a privacy-first future.

In a nutshell, consumers will choose whether or not to give you information, and you need to be prepared to capture and enhance that information to create a basis for targeting.

#2: Use first-party data to understand your customers

The easiest way to future-proof your marketing strategy in the face of changing privacy policies is to focus on shoring up first-party data, or information collected directly from your customers. The cookieless future is full of first-party data, but where do you actually get it? There are a number of sources within a retailer’s reach, including, but not limited to:

  • Behaviors or actions taken across your website, app, and/or product (via the first-party cookie)
  • Customer Relationship Management (CRM) system
  • Social media profiles
  • Subscription-based emails
  • Surveys
  • Customer feedback

Keep in mind that not everyone will opt-in, making these measures inconclusive when it comes to creating a full picture of your customer base. However, don’t forget about point-of-sale (POS) data. Since most consumers pay with cards (credit/debit), you automatically capture abbreviated card data from anyone who makes a purchase in your store. By layering this information with anonymized offline identity and behavioral insights, you can create a privacy-safe, 360-degree view of all your in-store customers.
The right customer data platform (CDP) can help you leverage this data in a privacy-safe way to gain insight into unknown consumers with access to item-level purchase history, demographics, socioeconomic, special interests, and predictive attributes in support of strategic and tactical decision making. But keep in mind: your insights need unifying: pull it all together to create a single, longitudinal consumer profile.

#3: Leverage your data & audiences—and reach out at the right time

Once you’ve enhanced your first-party data to create a deeper understanding of customers, it’s time to activate those insights and start engaging. Now that you know the “who,” you need to perfect the “where” and “when.” 

Targeting your audience takes the right combination of data management platform (DMP) and demand side platform (DSP) capabilities. First, you need to clearly track and understand the user’s cross-device journey, particularly given the prevalence of omni-channel convenience. Next, you can buy advertising based on that information and reach your targets at the right time. 

#4: Align your marketing goals & spend

The campaign is live. Is this the finish line—or the start of the race? It’s a trick question! Make sure you have the right measurement tools in place to “close the loop” on performance and incremental sales lift. Armed with the right analytics, you can make sure your marketing goals align to your spend to drive towards your business goals. 

Here’s where the beauty of enhanced first-party data comes in: you’re already working from directly-measured, comprehensive insights to gain a deeper knowledge of customers, positioning you to make better-informed decisions across the funnel that drive economic outcomes.

Bridge the gap with Bridg

We work with brick-and-mortar retailers to help them solve the “anonymous consumer” challenge, identify the real person behind the in-store transaction and gain insight into SKU-level purchase history, demographics and more, all while protecting consumer privacy. These unique insights can help you drive targeted and personalized marketing communications across 200+ integrated advertising platforms for enhanced media efficiency and top line growth. 

Ready to tackle the unknown by enhancing your first-party data? Let’s connect today.

Want to learn more about how POS data can help brick-and-mortar retailers overcome key marketing challenges? Check out our whitepaper here

Three tips for maximizing the value of loyalty programs

Everyone’s after loyalty, particularly in the race for more first-party data. But as more companies chase the many benefits promised by loyalty programs, more limitations surface. As it turns out, “if you build it, they will come” doesn’t quite ring true when it comes to realizing loyalty’s full potential. Let’s examine how you can tackle some of its challenges and reap more of its benefits.

First, the good news.

There’s plenty of reasons to go all-in on loyalty. Whether you’re inviting your customers to rack up points or redeem discounts, some serious benefits await those who win at nurturing strong brand affinity and fidelity. Why do loyalty programs have such serious marketing appeal? 

Increased basket size

  • 43% of customers spend more money at brands they’re loyal to (Fundera)

Optimized marketing spend

  • Building a long-term business relationship with a new customer is 16x more costly than cultivating the loyalty of an existing customer (Annex Cloud)

Accelerated new customer acquisition 

  • Customers who participate in high-performing loyalty programs are twice as likely to recommend the brand to their friends (3TL

In addition to these well-documented benefits, new changes in privacy laws and the disappearance of the third-party cookie have drastically increased the value of first-party data. Since customers choose to participate in loyalty programs, they’re a source of first-party data, helping brands create a privacy-safe data repository in preparation for the loss of third-party tracking. 

Now, the drawbacks.

For starters, retailers across verticals have made strong investments in loyalty programs, so market saturation makes it difficult to differentiate these programs. And in practice, not everyone participates. The highest penetration rates for loyalty programs hover around 40-47% despite the push for adoption across verticals (Mercator Advisory Group). Most recently, Panera made a triumphant surge past Starbucks with 40 million members—a 50% penetration rate.

As a result, even if you achieve relatively high penetration, you’re still missing about half of your customer base when it comes to leveraging first-party insights for personalized messaging and offers. In other words, despite their tangible impact on sales and the theoretical promise of first-party data, loyalty programs alone can’t power a full-funnel marketing strategy.

Plus, consumers have become more selective with their loyalty since the pandemic. According to a study by Accenture, 77% of all consumers admitted they now retreat their loyalty more quickly than they did three years ago. 

From the consumer perspective, loyalty programs come with two big flaws. Consumers are less and less comfortable volunteering personal information, and they also don’t want to take extra steps to manage rewards. In fact, according to Think With Google, 53% of shoppers surveyed think their shopping experience would be better if a retailer’s loyalty or rewards program activated automatically at checkout.

Keep it simple & reap more rewards

So, how can you minimize the drawbacks and enhance the value of your loyalty program to meet your customer engagement and revenue goals? In short, it’s all about eliminating friction. Take Starbucks, Amazon and Sephora, for example. They have all made loyalty a mobile affair to allow for seamless participation. Amazon Prime, for its part, puts frictionless convenience front and center via one-click checkout. For brick-and-mortar retailers without an ecommerce component, mobile or otherwise, explore these alternatives for eliminating friction and encouraging continued engagement.

Tip #1:  Go beyond points

Focus on capturing easy wins by rewarding online engagement. One way to make participation easier on members is to reward a wider range of behaviors, including those that already fit into their digital habits. Consider behavioral and social incentives – like rewarding members for writing reviews, tagging friends, sharing content, answering questions, etc. And don’t forget to match their efforts as a brand—57% of people would stop using a brand if their negative review is left unanswered (Fundera).

Tip #2: Make redemption seamless

Consider technologies that simplify the redemption process. For example, if you don’t have a POS integration, you can still engage loyalty members directly with receipt scanning. New receipt scanning technologies allow customers to upload photos of their receipts to earn and claim rewards. You gain purchase behavior insights in a process that’s simple for your customers to manage.

Tip #3: Or better yet, turn credit cards into loyalty cards

If you want to reap the benefits of a loyal customer, what you’re after is a strong brand affinity, not necessarily a formal membership (which many consumers dislike anyway). What if you just rewarded customers without making them take any extra step? No signing up, logging in or tracking points. 

Now, you might be wondering if such a proposal even qualifies as a loyalty program at all. Enter stealth loyalty, a process by which you dole out the rewards for targeted behaviors without making anyone formally “join” anything. All the positive customer experiences, none of the hassle. How do you pull it off? By using the data you already have–abbreviated card information–to track and reward their in-store behavior.

Find the full potential of your loyalty program with POS data

We help our clients identify the individual customers behind a transaction leveraging card-related data to build anonymous, privacy-safe profiles with SKU-level purchase history and hundreds of customer attributes that power analytical and marketing purposes. Credit and debit cards become loyalty cards, meaning you can reward purchases without asking anyone to sign up, take extra steps or deal with a redemption process.

Want to learn more about how POS data can help you enrich your loyalty acquisition and penetration efforts? Check out our whitepaper here

Have more questions and would like to talk? Connect with us today!

Stores that stun: How the in-store experience is evolving, and what you need to compete

As COVID-related restrictions lift, retailers of all types are revisiting their in-store strategy to remain competitive in a tight market. As it turns out, despite the continued surge in ecommerce, consumers of all age groups– including Gen Z–still want to shop in-store. In PwC’s annual consumer survey, 65% of consumers indicated that they would rather shop in-store to avoid delivery fees while 60% wanted to obtain items right away.  

The convenience and immediacy of in-store shopping favored by consumers point to a major advantage brick-and-mortar businesses hold over their online-only counterparts—and one most brands are looking to capitalize on in one form or another: live experience. And while a winning in-store experience can take different forms, all have one thing in common: they’re personalized (McKinsey).

Let’s discuss how you can take in-store experience to the next level–and why you need the right data to pull it off.

Make it convenient, personalized, delightful—and linked to the online experience 

No matter how you choose to wow your store visitors, all in-store experiences should feel specifically tailored to the target market. Prioritizing personalization pays, driving an average 10-15% revenue lift while companies with faster growth drive 40% more revenue from personalization than their slow-growth peers (McKinsey). And according to Salesforce, 64% of customers expect tailored customer engagements based on past interactions.

Plus, even the most show stopping in-store experience will fall short if it exists in a vacuum. Brick-and-mortar must blend seamlessly into a larger omnichannel strategy. Because before stepping foot in the store, even brick-and-mortar die-hards will still browse online. Case in point: 

56% of shoppers visit a store before making a purchase online, while 74% of shoppers search online before visiting a store (FitSmallBusiness).

We’ve looked at three recent examples of in-store experience and how they’re leveraging personalization, relevance and omnichannel convenience to their advantage. 

Nike goes local

Nike is hoping to strike a chord with those in pursuit of more local experiences with its new store format, Nike Live. Smaller and designed to create a more intimate feel, these locations and their products are tailored to their respective markets, featuring local sports team merchandise and decor appropriate for the community. 

Note: the consumer preference for community is not limited to apparel. According to a study conducted by Accenture, 47% of consumers say they’d participate in a grocer’s loyalty scheme if there were a greater focus on local products and offerings. 

Dick’s makes a play for the discount shopper

Dick’s Sporting Goods, for its part, is narrowing in on a subset of its customer base: the discount shopper. In order to better engage the discount customer, they’re launching three new store concepts that feature off-price models: Going, Going, Gone, Overtime and Warehouse Sale. Targeted shoppers get a tailored experience in the store that goes beyond coupons and integrates the savings they seek directly into the in-store experience.

Giant Eagle caters to health concerns

Consumers like feeling connected to the community and engaged according to their individual shopping preferences, but they’re also increasingly looking to the in-store experience for inspiration and guidance, particularly when it comes to health and wellness. 

Grocery shoppers, for example, might seek in-store inspiration to discover their next favorite ingredient or dish. Giant Eagle shoppers can go a step further and get an entire personalized vitamin program. In partnership with the personalized vitamin company Vous Vitamin, the grocer is offering health stations at 220 of its storefronts that allow customers to complete a short survey, determine the right vitamin blend for their needs and arrange for home delivery (with a 5% discount to boot). Customers can also use the health stations to check their blood pressure, get healthy recipes and other health education resources, and earn rewards. 

In one experience, Giant Eagle customers get a personalized product, omni channel delivery and invaluable resources—and all they had to do was show up.

You can’t do any of this without the right data 

Here’s the catch: none of these examples would be possible without rich customer data that reveals individualized and localized preferences. Unfortunately, only about 25% of retailers track their in-store traffic—a  major obstacle to taking advantage of in-store opportunities and competing against ecommerce giants.

How can you deliver on new consumer expectations and make your in-store experience competitive when you don’t know who’s in your store?

You may be closer than you think. POS data, when enhanced with additional insights, can unlock the information you need to deliver personalized offers, adjust store layout, plan for in-store experiences and more. When leveraged in a privacy-safe way, you can use it to incorporate insights on actual purchases, preferred items, frequency, price sensitivity, promotional history, daypart and channel preferences—all toward creating an unforgettable, personalized experience that meets the needs of your customer base.

Curious about the power of your POS data? 

Read our latest whitepaper to learn more about available targeting approaches for brick-and-mortar retail—and how leveraging the payment instrument and POS data can help you reach a variety of marketing goals.

We’re here to help, reach out to us if you want to talk!