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Forecasting Spend During a Time When the Past is Suddenly No Indication of the Future

Friday 29 May 2020 Shopping Behaviour

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Sue MacLure's picture
By Sue MacLure

Here at CACI we have, for many years, worked with retail property owners and retailers alike to help them understand how and where their consumers spend their hard-earned cash, advising them where they should put their shops and centres.

We understand how far people are likely to travel, how much they are likely to spend and what they are likely to spend it on. We know what the ripple effect is when one shop opens and another closes.

The power of tracking human pack behaviour over time and predicting what happens next is an artform that is at the heart of the data driven society we live in. As a herd we are all, shockingly, predictable.

CACI have made it our business to gather brand purchase and demographic data, to understand what consumers are doing, connect that to the environment they are in, and use that connected knowledge to advise brands where they should invest.

 

The Disruption of Coronavirus

So, what do we do when all those previous trends of customer behaviour are thrown into disarray by a disruptive factor that none of us had seen coming (at least, not outside of science fiction dystopian novels)?

Something that actually stopped society engaging in the way that they have done for decades. No more stopping off for a coffee on the way to work, no more lazy Sunday afternoons catching a movie and dinner with friends, no more spontaneous buys from a passing glance in a shop window.

How do you predict what consumers will spend?

 

For CACI The Answer Was Twofold

Firstly, find out what those changes in behaviour are, what are the attitudes that are driving them, and therefore what might be the resultant alterations in spend patterns.

Then secondly what is the practical implication of that knowledge, how can we advise brands what to do?

To do the first we have undertaken a comprehensive customer survey which, as well as a fascinating read on human psychology during these strange times, highlights 7 key themes of behaviour change – you can read all about that here.

But the second is where brands get their real value from us, i.e. what to do with that new knowledge.  We’re not magicians or soothsayers, so no, we can’t know exactly what will happen as we come out of this, but we are using our experience of interpreting and applying data in this space to help brands navigate through these uncertain times.

In the past our spend pattern models only needed to be fundamentally updated to accommodate true cultural change on an annual basis, with maybe tweaks throughout the year, because it’s fair to say that the biggest ‘disruptor’ to our seasonal spend behaviour to this point has been the weather.

We are now rebuilding the models on a monthly basis with each new set of spend patterns that come through, making it dynamic enough to keep up with our changing landscape and government guidance. We have then taken these models and combined them with our learnings about how different demographic groups are reacting differently – based on our years of demographic knowledge and our more recent Covid specific behaviour change surveys.

We have input these new models into a scenario building tool – allowing our consultants to sit down with brands and work through various ‘what if’ scenarios.  E.g. What if online shopping takes over 50% of spend, what if the big city stores recover by 10% but rural by 30%, what if luxury brands will always require a retail experience but commodity shops have all but died in the high street.  We don’t know which of these will be the case, but we can create models which are informed by our knowledge about the retail sector and the changes we see from both spend and survey and explore those options with brands. In that way we can give the most up to date view of what revenue outcomes might look like under different consumer scenarios.

 

For More Information

Click here to download our survey or for more information drop a line to info@caci.co.uk and we'll get back to you.

What do we do when all previous trends of customer behaviour are thrown into disarray by a disruptive factor that none of us had seen coming (at least, not outside of science fiction dystopian novels)? How do you predict what consumers will spend?

Forecasting Spend During a Time When the Past is Suddenly No Indication of the Future