The four categories of retail shoppers and how you can target them

Australian retailers are falling behind when it comes to identifying who actually make up their customer base, a new survey reveals, and should instead be analysing which of four shopper categories make up their target market.

Retail expert Selma Mehmedovic from the Monash University Centre of Retail Studies says the centre’s new survey reveals customers can be separated into four categories, and businesses need to start identifying where their customers fit.

“Australian businesses have a long way to go. Retail trends are changing, customers are placing a lot of importance on mobile internet and applications, and this will be interesting to see how the retail industry progresses because of this,” she says.

The four categories are:

• Store loyals. These shoppers are usually baby boomers and prefer to shop in physical stores. They shun online for shopping centres and prefer a well-rounded retail experience with knowledgeable staff.
• Channel adopters. These are mostly younger buyers, who like using new channels to shop and buy. These include websites, mobile applications and the rise of social media as a buying tool.
• Traditional shoppers. They generally rely on catalogues to shop and look for sales, although they enjoy using multiple shopping channels including the internet and physical stores.
• Functional shoppers. This category is mostly filled with baby boomers and men. They shun shopping and rarely buy except when something is on sale, or when needed.

Mehmedovic says businesses need to identify which of these four categories make up their target market, and then start identifying methods to get the most out of each. She says each category has specific needs, which will affect marketing techniques.

“The store loyals are defined by their preference for the physical store, that’s their main characteristic. For them, it’s all about engagement. You want to have them interacting with the brand and representatives.”

Mehmedovic says targetting store loyals, who are generally older shoppers, requires emphasis on customer service. Businesses need to train their staff to provide a high level of personalised customer service, and make sure they engage with the customer on a personal level.

“For store loyals it’s all about engaging a memorable experience. And this includes the layout of the store, how that appears, and how attractive it is. You want to talk to these customers individually and find out what they want. Because of this experience, they will go and talk to their friends and come back.”

The channel adopters are a different story. These are mostly younger shoppers who love finding new ways to buy, whether that be through a website, mobile application or through social media. Mehmedovic says these types of shoppers value a cohesive buying experience.

“With the channel adopters, they love shopping across online, applications, etc. Anything where they can buy. So for them, it’s important to have an integrated strategy. If they buy online, they want you to know what they’ve bought and when they’ve bought it.”

“They want a cohesive brand across all channels, and they want an exact record of all their transactions. It’s incredibly personalised, and they want you to know exactly what they’re doing, and when they’ve done it.”

Mehmedovic also says this applies to the traditional shoppers, who enjoy seeing a cohesive brand across several channels, including paper catalogues. “They like retailers having a cohesive strategy in print and in the physical store.”

As for functional shoppers, Mehmedovic says don’t even bother. “They don’t enjoy shopping, and have other people do it for them. I probably wouldn’t target those people at all.”

Once businesses identify those four categories, Mehmedovic says businesses can then start developing specific marketing strategies and stop wasting time chasing the wrong customers.

“Think about your particular customer, understand their needs and their preferences. Then you can look at what channels they are using, and then adopt a strategy. It comes down to the basic question of ‘Who is your customer base?’”