Retail must make do and mend.

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Retail is fun, fast-paced and super competitive. It can also be frustratingly tactical and short term. So, when push comes to shove and the chips are down, the Pavlovian response to discount a way out of potentially troublesome situations is high on the list of the retailers playbook. 

And for the countless retailers, large and small who have been impacted by Covid-19 and the lockdown, deals are ever more evident as a way to retain and reactivate their lockdown-battered, nervous customers. 

Websites, social media and high street windows are awash with % off posters. All compounded by the runaway success of Rishi’s dishes in the hospitality industry which means we’re seeing the double edged sword of a successful policy that kick-started the sector’s finances but that conditioned a market only to buy at a discount which is ultimately unsustainable at scale.

The smart play is to unlock dormant value from existing assets – namely your customers. 

Everyone knows that it costs five times more to acquire a new customer than it does to retain an existing one. And a Gartner report reveals that 80 percent of a company’s future profits will come from 20 percent of its existing customers. 

In the current climate, looking after the people that have previously purchased from you has never looked so appealing. And the good news is that contrary to popular opinion re-activation and retention activity does not have to involve hefty investment in technology. 

A recent report by Cheil UK shows that 56% of UK retailers are pulling investment in digital transformation post-lockdown. Technology is not, and has never been, the issue; the real barrier is how existing systems are integrated and activated with the teams. 

Now that make-do-and-mend is the order of the day in the risk-averse, cash strapped retail sector- we’re seeing a unique opportunity for retailers to see exactly what their stacks can do when it comes to driving up customer lifetime value, purchase frequency, and average order value.

At The Thread Team, we’ve long understood the importance of understanding past behaviour in building resilient retention and reactivation activity. Overlaying past behaviour with an individual’s behaviour in the moment means we can enhance and tailor the path to purchase, driving relevance, deepening relationships and reinforcing existing behaviours. 

We approach a retention or reactivation brief with a customer-first mindset, rather than being driven by short termism and existing capability. Once we’ve unlocked these pivotal truths we’re able to build campaigns, interventions and activations using existing tech - and sometimes a roll of gaffer tape. 

What is clear is that retention and reactivation over the coming months will deliver more revenue than acquisition; the key to success will be making what you’ve got work for you.

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