Built for me (Part 3): The promiscuous shopper

You may know the old joke that ends: “We have established what you are, madam. We are now merely haggling over the price.” Now apply that in the retail context.

I introduced the notion of the promiscuous shopper nearly 3 years ago. This special, but hardly rare, breed of consumer is always on the hunt for the best deal and completely devoid of any potential to be loyal.

When you choose to anchor your marketing strategy on relentless un-targeted promotions, and then layer on extra coupons and rewards points, it’s the promiscuous shopper who is the first to bite, and who then spikes as a percentage of your business.

To be fair, most businesses need some of these consumers from time to time. There is clearance product to be sold and any sensible marketing and merchandising strategy will reflect a natural demand curve.

An unusually high level of discounting may also be necessary to drive initial trial, so long as you are confident that repeat business has the potential to be loyal and profitable.

And certainly promiscuous shoppers are not always immediately apparent. Time and solid analysis are needed to separate them out and start to chase them away.

But always bear this in mind: when the promiscuous shopper feels that your business is built for them, it’s the first sign of trouble. Big trouble.

3 thoughts on “Built for me (Part 3): The promiscuous shopper

  1. Okay Steven, we buy your premise. So what should we do about it? What is the optimal mix of promiscuous versus full price shoppers and how does an online or offline retailer get there, especially in the face of competition from Amazon and eBay?

    1. First, it’s not so black and white as promiscuous vs. full-price. You can have promotional customers that are an appropriate part of the mix. The right answer is specific to a retailer and it’s strategy. I will say two general things: If you can’t make money at your “regular” price (not necessarily “full price”), you’ve got a problem. Second, if your primary competition is Amazon or eBay, you aren’t going to win on price.

    2. Danny- In some offline categories (read “retail automotives”), differentiating treatment of customer has been standard practice essentially for ever. There, the best salespeople are pros at sizing you up and getting you to walk or commit. The skills are highly developed, encoded in a salesperson’s DNA, and show up in formats such as Department stores (ever shopped in Ladies Accessories at Nordstrom’s or Men’s Suits at Bergdorf’s?). So what, as you say, to do about it?

      Simple: evolve the individual Associate-scale capability into a company and brand capability that can be wielded more systematically.

      We bet that Stores Knowing Customers, and being able to provide differentiated experiences in realtime, is offline’s strongest capability for fencing prices, promotions, and personnel time, expertise, and service delivery. Without the ability to allocate in favor of targeted customers, the squeakier wheels will draw attention to themselves regardless of how relatively profitable each may or may not be (… not to suggest that Divas are promiscuous).

      We bet that technology is more important to success that is refresher-training Associates. The capability for differentiating the offline channel can also be projected into online/omnichannel operations. Operating so to prioritize resources on targeted shoppers might seem closer to strategies for brand building and positioning than those for product push, and it is. The intent is to specifically weight in favor of, for example, fashion forward and knowledgeable customers who lead other shoppers into relationship behaviors while letting tire kickers fend for themselves whenever the floor gets busy.

      So “what to do” is “build an ability to discriminate in-store”. Technology and quantitative modelling are important parts of the “how”.

      Steven is exactly right, it isn’t a matter of black or white. Customer profitability and attractiveness is a gradient. Changing business conditions make it essential to adjust where to draw the line in deciding whom to address when an Associate says “are you being served?”.

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