In your quest to target high-value customers, are you leaving a lot of potential revenue on the table? You may not think so, but our recent report, Brand Loyalty 2020: The Need for Hyper-Individualization, shows that there are some significant opportunities to better engage some overlooked audiences, which have the potential to be loyal and generate more sales when engaged.
Some consumer groups – like those in certain income levels or generations – said that they feel their favorite brands tend to overlook them. And the divide has become more apparent as companies put their focus and resources on personalization marketing.
Those in higher income brackets told us that they believe their interactions with brands and retailers are more personalized than those with lower incomes. However, even though lower-income shoppers have less discretionary funds, they still spent about 40% of their income on items that economists categorize as luxuries. Brands that focus on 1:1 personalization with only higher income shoppers are missing out on a potential lucrative lower-income consumer segment, which is ready to buy.
Then there's the Baby Boomers. Most brands cater to younger generations – coveting those like Millennials who spend so much time, and money, shopping online. But, Millennials are not the ones with the most disposable income. Baby Boomers are the biggest annual spenders in the U.S., followed by Generation X. Brands must ensure personalization strategies address unique attributes of each generation, which requires continually adapting channels by audience. For example, before COVID-19, an app may have been the best way to reach millennials, but direct mail was used to reach Baby Boomers. After COVID-19, however, as digital adoption spiked among homebound Boomers, strategies should pivot to include more app engagement for that particular audience, as well.
Less frequent shoppers are also often marginalized. It makes sense, considering frequent shoppers get more out of loyalty programs than those who don't visit as often or buy as much. But you also need to consider that those who shop online less frequently – once a month or even as little as just once a year – far exceed the number who shop online very frequently. Brands would be wise to develop tiers within their loyalty program that address shopping frequency, in order to engage with customers who only may make purchases a couple times a year, so they are top of mind when these individuals shop in the future.