Breaking Stories

Inflation Boosts Merchant Interest in Data to Keep Customers Brand Loyal

Try telling a Dunkin’ fan that Starbucks is better, or vice versa — and then play that out across every consumer product and service imaginable. People form powerful bonds with brands, but those bonds will break without a dialed-in understanding of the new consumer expectations.

In the study “Relationship Commerce: Building Long-Term Brand Engagement,” a PYMNTS and Ordergroove collaboration, we surveyed over 2,800 U.S. consumers and found that nearly eight in 10 (79%) have a combination of retail subscriptions, memberships or loyalty program relationships with an online merchant — and nearly one in five have all three.

Given this extent of relationship commerce, sustaining those connections is work that never sleeps, requiring constant monitoring of platform data and ongoing test-and-learn sessions for personalization and new product development that keeps these relationships fresh.

Superpowers of relationship commerce were on deck for an On the Agenda discussion as PYMNTS’ Karen Webster was joined by Greg Alvo, founder and CEO at Ordergroove, and Abhishek Ahluwalia, global eCommerce director at Mondelēz International.

With an enviable portfolio of brands including Chips Ahoy, Cadbury, Halls, Oreo and Philadelphia Cream Cheese, Mondelēz gets relationship commerce as few companies do.

Ahluwalia told Webster that in “uncertain economic times, people will gravitate to brands which they love and trust. We have a principle called Revenue Growth Management, which we also apply in eCommerce, which says that it’s not just about running a promotion on Amazon or any other platform. The way we look at it is, ‘What is the right pack type?’”

This assumes brand loyalty not just by virtue of product love, but because Mondelēz takes pains to know its customer base and provide the right choices for any economic conditions, leaving the decision to consumers.

“Product Pack Architecture (PPA) is what we look at,” Ahluwalia said. “That’s the mantra of really navigating in these uncertain times.”

Alvo agreed, adding that as customer acquisition costs (CACs) rise, “The costs of acquiring new relationships are more expensive, and that’s where the [lifetime value] from the relationship is so important and where the experience becomes so important. You can’t just compete, even in challenging economic times, on price.”

He added, “We’ve had customers at Ordergroove where they might think about it tactically, where it’s, ‘Let’s just get a capability lab on the website or in our stores.’ That’s not enough. You will get traction, but to really transform your business towards a customer-first mindset and relationship commerce, it needs to be less transaction-first and more relationship-first.”

Get the study: Relationship Commerce: Building Long-Term Brand Engagement

Elevating Experiences

Ironically bemoaning the loss of third-party browser cookies while having a panel-wide sidetrack on the joys of dunking Oreo cookies in milk, Ahluwalia noted how good visibility into first-party data from eCommerce sites and retail partners is indispensable.

He talked about a Mondelēz line called Enjoy Life Foods, designed for people with dietary restrictions and food allergies, saying, “It’s very niche, but the beauty of digital is that you can really target.”

If consumers prefer going to Amazon for Enjoy Life Foods, they can. But “we have a D2C side where we’ve got the entire catalog. It’s almost like the retail online becomes an initiation, then on direct-to-consumer,” Ahluwalia said.

“We’ve got the full catalog where consumers, if they like a chocolate chip Enjoy Life [bar], which is one of our top products, they can try a bar, they can try a cookie or whatever. That’s one example of exclusivity where we have got the entire range of product, which is not available in all stores, for example.”

Ahluwalia went on to describe how allows consumers to personalize the popular cookie in several ways, making it a gift item.

“You’re elevating the brand experience, but at the same time, that assortment is not available elsewhere,” he said. “You’re not going head-to-head with your retail partners, but almost creating a different value prop for the consumer.”

Similarly, Alvo said Ordergroove brings personalization to the program level, saying, “Some of our customers that have Ordergroove implemented into their stores at the POS will also very logically have their millions of consumers and their loyalty program tied in because it’s a very synergistic opportunity. I think that’s also another way of aiding with margin.”

He added that the best commerce relationships are holistic and do not feel fragmented, instead being embedded throughout the customer’s shopping journey in a natural and friendly flow.

“If you think back to what made Dollar Shave Club so successful in their heyday was really around the community, the experience, the content that they produced,” he said. “If you look at Chewy, what makes them successful? You see constantly how much they care about their customers and consumers. We’ve all seen the social media posts that feel very genuine.”

See also: Ordergroove Joins Shopify’s ‘Certified App’ Club

Learning Consumer Cadence

Asked about the ideal dataset for optimizing products and PPA, Ahluwalia said, “Transactional data is of the best use, where we are able to really figure out the behavioral patterns of the consumers, especially when you’re launching a new product, doing a preview, what’s the glance view, what’s our add to cart ratios, what’s the conversion rate, and then we also look at how much paid advertising have we been able to deploy, etc.”

Other metrics that come from first-party data — sales velocity, traction of certain SKUs versus others — enable more precise product and merchandising decisions. That’s where platforms like Ordergroove are helping companies create greater lifetime value with data insights.

“As it pertains to relationship commerce and loyalty and subscriptions and memberships, data is very important to getting this right,” Alvo said, “because what mechanism the consumer prefers, let’s assume that we’re delivering this to a home, you’ve got to get the cadence right.”

He added, “You really want to put [the consumer] at the center, and data allows you to do that and really make it a personalized experience — starting with churn mitigation, but it also can help on the front end too, when they’re enrolling.

“What’s the right plan? How do you recommend a plan for Karen that might be different than Abhishek based on a bunch of different inputs? It’s critical and a huge part of where this market and category is heading.”

Here again, giving customers more choice and opportunities for personalization is the heart of relationship commerce, which is hard to do without first-party data and purpose-built platforms to make sense of it, productize it, and then nurture customer lifetime value with ongoing use.

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