Here Comes 2021. What Do I Do With All These New Customers?

Many of us crave the coming of Jan. 1 as a symbol of a fresh, new year dangling its promise of being oh so much better than the last.

On many fronts, particularly humanitarian, we're anxious to move past the fear, upheaval and political angst of 2020. On the flip side, 2020 was an unprecedented year for growth in technology and e-commerce. Depending on which side of the boom you find yourself, 2021 brings a whole new set of challenges for online retailers.

From March to December, we're all aware of the clear winner categories — grocery, home décor/home goods, outdoor, pets, and gifts — as shoppers moved their purchases away from brick-and-mortar and onto the web. Interesting stats arose:

• As many as 70 percent of your customers were new to buying online. Ever.
• One in four new online shoppers say they will continue to purchase on the internet even when stores reopen.

Who knew what pleasure and near-instant gratification we could feel when a pile of boxes landed at our door?

Now pure-plays and small retailers face a new challenge: Who are these customers? How do you retain these new customers profitably? Are all customers created equal? How do you balance these into your 2021 forecast?

Who Are They?

• I Love a Deal: Your wholesale channels closed, and by late July you were staring at a warehouse full of shorts (or dress suits or swimsuits or or or?). So you threw a REALLY BIG SALE!! Utilizing a discount promotion will draw new customers to try your products.
• I’m Hungry: Americans do love to eat. With extra time on their hands, the willingness to explore and supplant a fine dining experience out of home with a prepared frozen, fresh or DIY kit grew exponentially.
• I Miss Visiting: Tourism stalled, but not the desire for goods from their regular haunts in the area. Folks couldn’t/wouldn’t visit your stores even if they made it to your locale, so they ordered online. Looks like a new customer, but is it? They may have been in your store before.
• It's a Gift: Birthday lunches decreased, seniors are locked behind doors. Consumers found a way to “show the love” through shipping gifts directly to recipients. Wow, that was easy; they shipped one to themselves while they were at it.
• I Have to Be Comfortable: “Dress casual” or formal business attire is no longer needed three days to five days a week. New tech fabrics look great on Zoom and feel great sitting in a chair at home all day. Your son is wearing these cool new pants; Dad decides to try them, too. OH, and an ergonomic chair really helps.

If you have brick-and-mortar locations or sell through other stores, many of these “new” customers may already have your products in their homes and they're simply sourcing more. They are “new” direct buyers.

Analysis plus time and testing are the only things that will prove out the resilience of these customer — some faster than others. NO, all customers are not created equal. Now more than ever, you need to understand your customer file and devise ways to retain them.

• Analysis:
  • Segment your file so you know who your best, loyal, repeat customers are.
  • Segment one-time buyers and analyze their spend as well as date of purchase.
  • Consider modeling your housefile.
  • If you already have a mail program, be sure to do a matchback AND match your new online customers to the housefile.
• Demographics: Did you pull in a larger segment from a group you haven’t been as focused on?
  • Did you ever think your grandmother would actually go find lingerie online and buy it? Higher risk age groups migrated to online ordering, but this group has proven to be less willing to respond to online ads or forms of digital media.
  • If you now have a 24-month direct buyer file of at least 10,000 to 25,000, consider direct mail and/or a catalog.
• Customer Experience: When a shopper is in a pinch, “OK” will often do. Once life normalizes, the critic in the customer comes back. How easy is it to navigate your site? How fast is it? Consumers will be less patient once we get past the holiday crush.

When you sit down and take a hard look at your 2021 plan, keep these tips in mind:

1. Don’t treat these new customers just like all other customers.
2. Don’t ignore your existing customers.
3. Be OK with not contacting all your customers all the time. They're not created equal.
4. Define your acceptable level of time and investment to turn that one-time customer into a repeat customer. Then let go and look for more customers like your best customers.
5. If you don’t have the resources internally, find help. You can easily waste more money testing blindly than if you're partnering with someone who can laser-focus on getting the most out of your new customer file.

Happy New Year!