Consumption and distribution patterns are constantly changing, driven by accelerators such as the pandemic and the digital growth of the purchasing process. For months now, quick commerce has been taking up an increasingly important place in the retail ecosystem, raising questions for traditional players: will these phenomena truly threaten their market share, or is this simply a trend that will fade over time?
Evolving behaviors are reshaping responses to a challenge that remains fundamental: building and retaining consumer loyalty, since acquiring new customers costs far more than retaining existing ones. Today, building lasting relationships with consumers through digital transformation means deploying a business model in which data sits at the heart of the entire organization, enabling brands to connect with their consumers across every channel.
On its digitalization journey, the retail sector is increasingly opening up to new types of data that provide valuable insights for better sales forecasting and anticipating market trends. This data is also essential for understanding consumer behavior, delivering a seamless customer experience, and creating personalized offers on the right channels for the perfect product.
While the promise of quick commerce is enticing, established players have all the cards they need to keep customers on their side. What’s more, quick commerce is a very costly model. But will their game plan actually work?
Securing consumer loyalty
Quick commerce is in direct competition with the local business side of brands, which is the preferred approach for developing and retaining customers. With a limited number of SKUs spread across a narrow range to guarantee 15-minute delivery, and offerings made up primarily of national brands and local producers, quick commerce services are set to win over a middle-class customer base willing to pay a premium.
Local business accounts for 15% of major retailers’ Revenue. As a result, competition from quick commerce is a significant concern for brands, which are adapting their strategies to remain their customers’ first choice.
Some are building new models to build relationships with customers on a regular, long-term basis — such as subscription programs. For some brands, subscriptions are tied to a privileged status for consumers who benefit from additional services such as free delivery from a minimum purchase amount.
Segmentation as a sustainable retail strategy
Retailers need to adopt a segmentation strategy based on customer type. This allows them to develop strategies tailored to each channel while maintaining control over the customer journey and keeping costs in check.
By taking into account the characteristics of each customer segment, Merchants can fine-tune their offers. Take quick commerce as an example: this channel has grown in certain megacities, targeting high-basket shoppers. This is exactly the customer segment that retailers need to win back. When a customer profile is clearly defined, a retailer’s strategy more easily adapts to consumer expectations. Retailers must understand their customers’ needs in order to meet them and build a solid foundation for long-term loyalty.
Data as a key driver of consumer engagement
In the past, retailers relied on receipts to gauge customer interest — a stable and consistent source of customer knowledge for categorizing buyers. Faced with shifting demand, retailers can now overcome these challenges through decision-making analytics based on multichannel, real-time demand.
This more pragmatic approach offers better visibility into lead times, particularly when it comes to inventory management and restocking. Retailers have since adopted a more opportunistic approach: responding to demand in real time to meet consumer needs while enabling them to move their stock. However, at the risk of repeating the same mistakes, this instant decision-making analytics strategy is only possible if you know your customers — and that “intimacy” comes from data analysis.
Quick commerce models deserve close attention, but Brands hold all the cards — using data to predict and fine-tune their approach so they can act with consumers who are loyal to the brand.
