# Cracking the code of customers’ future value in retail
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-10-12
Category: TECHNOLOGY
Category URL: https://financedigest.com/category/technology
Meta Title: How UK Retailers Can Navigate Tough Economic Times
Meta Description: Discover how UK retailers can adapt to changing consumer behaviour and economic conditions through strategic measurement and data analysis.
URL: https://financedigest.com/cracking-the-code-of-customers-future-value-in-retailhtml

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_By Stuart Russell, Chief Strategy Officer,_ [_Planning-inc_](https://www.planning-inc.co.uk/)

![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/stuart-russell-450x448-1736815044704-compressed.jpg)

Retailers have faced a series of challenges over the past half-decade. First, the shift from high street retail to online shopping meant a challenge for many on how they approached sales. Then the pandemic swept in, already over two years ago now, and it radically changed customer behaviour. Now, the industry faces a cost-of-living crisis that prompted 60% of adults in the UK to [spend less on non-essential items](https://www.ons.gov.uk/economy/inflationandpriceindices/articles/overviewofinflationandthecostoflivingforukconsumers/june2022) in June.

Arguably, the [end of these challenges is not yet in sight](https://www.financedigest.com/some-in-shanghai-allowed-out-to-shop-end-of-covid-lockdown-in-sight.html "Some in Shanghai allowed out to shop; end of COVID lockdown in sight"). A global recession may be a very real possibility, and according to [a recent Deloitte report](https://www2.deloitte.com/us/en/pages/consumer-business/articles/retail-recession.html), the industry will not emerge from it in its existing state.

That presents the UK’s [retailers with a tough decision to make – and an opportunity](https://www.financedigest.com/uk-retail-banks-is-irrelevance-curtailing-opportunity.html "UK Retail Banks: Is Irrelevance Curtailing Opportunity?") as well. Should retail C-suites batten down the hatches, [hoping to hibernate through the economic winter](https://www.financedigest.com/uk-retailers-turn-positive-on-sales-hopes-after-bleak-winter.html "UK retailers turn positive on sales hopes after bleak winter") ahead? Or should they take a more optimistic approach, looking further into the future with the hope that effort [made now will pay](https://www.financedigest.com/half-brits-taken-pay-cut-job-made-happier-according-wrike-survey.html "Over half of Brits have taken a pay cut for a job that made them happier, according to Wrike survey") off down the line?

There’s no ‘right’ answer during such volatile times, but I’m in favour of the second. I’ll explain why.

**Re-evaluate** [measurements of success](https://www.financedigest.com/how-to-define-success-and-measure-the-impact-of-digital-transformation.html "How to define success and measure the impact of digital transformation")

Whatever your response, it’s going to be [important for retailers](https://www.financedigest.com/42-of-retailers-say-payment-over-time-solutions-are-very-important-to-ensuring-future-digital-innovation.html "42% of retailers say payment-over-time solutions are ‘very important’ to ensuring future digital innovation") to re-evaluate how they measure success moving forward. People are spending less. If you sell commodities, that ‘less’ might only be a small amount. If you [sell luxury](https://www.financedigest.com/dksh-sells-its-25-stake-in-swiss-luxury-watchmaker-bovet.html "DKSH sells its 25% stake in Swiss luxury watchmaker Bovet") products, it’s probable that ‘less’ will be a lot more. Either way, it will be _less_. [Continuing business as normal and measuring year-on-year growth](https://www.financedigest.com/swedish-match-continues-to-see-strong-smoke-free-sales-growth.html "Swedish Match continues to see strong smoke-free sales growth") will no longer make sense. Instead, [retailers must turn their eyes to the finer standards of measurement to ensure their marketing budget will make an impact on customer’s](https://www.financedigest.com/insight-into-tomorrows-retail-banking-customers.html "INSIGHT INTO TOMORROW’S RETAIL BANKING CUSTOMERS") future value.

Using more sophisticated [metrics to measure business](https://www.financedigest.com/5-fx-metrics-your-business-should-be-tracking.html "5 FX METRICS YOUR BUSINESS SHOULD BE TRACKING") success can provide a more detailed picture during times of economic stagnation or deceleration. In combination with marketing [spend destined](https://www.financedigest.com/brits-spend-less-than-a-quarter-of-their-holiday-exploring-the-destination.html "Brits spend less than a quarter of their holiday exploring the destination") to produce results in the long-term, that information can prove very useful.

Revenue might dip, hop, and shuffle along, telling you not much at all about your campaigns’ [impact on customer](https://www.financedigest.com/the-fca-is-taking-immediate-action-on-customer-vulnerability-but-how-does-this-impact-advisers.html "The FCA is taking immediate action on customer vulnerability; but how does this impact advisers?") relationships. But other measurements can. [Shifting focus](https://www.financedigest.com/stocks-fall-bond-yields-rise-as-focus-shifts-to-fed-rate-outlook.html "Stocks fall, bond yields rise as focus shifts to Fed, rate outlook") to analyse customer behaviour beyond the transactional can provide much better insights, and showcasing incrementality can be much more significant in the long run.

[**Reveal obscure patterns with big impact**](https://www.financedigest.com/first-listener-wide-study-reveals-brand-impact-of-radio-livestream-and-podcasts.html "First listener-wide study reveals brand impact of Radio, Livestream, and Podcasts")

Taking this approach, [retailers must focus on leveraging first-party data](https://www.financedigest.com/russian-retail-sales-fall-deeper-jobless-rate-rises-in-sept-data.html "Russian retail sales fall deeper, jobless rate rises in Sept – data") – as much as they can. That’s the gold dust in times like these. Retailers who champion this process will undeniably [stay ahead of the curve](https://www.financedigest.com/stay-ahead-of-the-curve-and-meet-your-customers-payments-needs.html "STAY AHEAD OF THE CURVE AND MEET YOUR CUSTOMERS PAYMENTS NEEDS"), as they’ll have a crystal clear picture of each customer’s habits, which helps build a more robust picture of expected future value. The financial reward may not be as immediate as a clearance campaign, but in the long term it is invaluable.

These vast amounts of [data collected will only gain more value for the business](https://www.financedigest.com/keeping-data-connected-for-greater-business-value.html "Keeping Data Connected for Greater Business Value") as long as they’re continuously analysed and simplified. So note that this process should be in charge of a smart platform that can operationalise on- and offline behavioural and transactional [data in real-time](https://www.financedigest.com/real-time-connect-nyc-where-adtech-leaders-come-together-to-redefine-data-strategies.html "Real-Time Connect (NYC): Where AdTech leaders come together to redefine data strategies"). Marketers’ [time](https://www.financedigest.com/tough-times-and-risky-business-which-emerging-market-assets-are-a-bet-worth-taking.html "Tough times and risky business – which emerging market assets are a bet worth taking") should solely be dedicated to deliver hyper-personalised marketing and insight-fuelled decision-making, based on each customer’s incremental value.

If retailers can place their efforts within the right context, the current economic downturn can still [present an opportunity to grow as a brand](https://www.financedigest.com/the-rise-of-finfluencers-presents-unique-opportunities-but-brands-must-proceed-with-caution.html "The rise of “Finfluencers” presents unique opportunities but brands must proceed with caution"). That [growth might only come](https://www.financedigest.com/the-non-invasive-prenatal-testing-nipt-market-is-estimated-to-witness-stupendous-growth-in-the-years-to-come.html "The Non Invasive Prenatal Testing Nipt Market is estimated to witness stupendous growth in the years to come") further down the line, as a result of information and insights you’ve gained now. What’s clear is that [retailers must change tac if they’re to survive this crisis](https://www.financedigest.com/global-food-makers-retailers-remain-in-crisis-mode.html "Global food makers, retailers remain in crisis mode"), the next, and the next after that. We’re in a different world now. And [adaptation is the key to surviving](https://www.financedigest.com/big-banks-want-survive-past-next-10-years-need-adapt.html "If the big banks want to survive past the next 10 years, they need to adapt") it.

A [big part of that adaptation will rely on moving targets](https://www.financedigest.com/big-brands-set-to-miss-plastic-sustainability-targets.html "Big brands set to miss plastic sustainability targets") away from sales and revenue-based metrics. [Retailers should focus](https://www.financedigest.com/high-street-crisis-why-retailers-need-to-focus-on-in-store-ux.html "High Street Crisis: Why Retailers Need to Focus on In-Store UX") more on the insights they’re able to harvest. That’s what will provide value to those that aim to survive, and even thrive, through the [next few decades](https://www.financedigest.com/isostearyl-alcohol-market-is-projected-to-expand-at-a-cagr-of-4-5-over-the-next-decade-expanding-1-6x-by-2030.html "Isostearyl Alcohol Market is projected to expand at a CAGR of 4.5% over the next decade, expanding 1.6X by 2030"). The long-term must remain front of mind.


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