Posts Three ways to stand out in a crowded insurance market
Three ways to stand out in a crowded insurance market
Sagar Limbu
In this Article
With new guidance in the FCA’s Consumer Duty directive, the financial services industry is being asked to get to know their customer better and meet their diverse needs. In a recent report produced by Braze & CACI, providing insight for financial services brands, it was found that 42% of EMEA consumers only use one financial services brand – so how can you retain their loyalty, trust and keep them engaged?
Technology innovation
The general insurance market has always been challenged with engagement, as the frequency of communication with its policy holders is low and concentrated at the point of policy inception, claim or renewal.
However, building trust is still crucial in this market.
Every insurer is now looking for new ways to harness technology for growth and competitive advantage. The use of AI and innovative tools is becoming more prevalent in the underwriting, claims and CRM process.
Harnessing your customer data through modern decisioning tools, and leveraging third-party demographic data to build a more holistic understanding of who your customer is, enables you to interject hyper personalised communications throughout the life of the policy, via the most appropriate channels, and actively give policy holders transparency over potential changes in premium.
Building trust
Whilst insurance may be seen as a “necessary purchase”, the payments aren’t usually greeted with good sentiment or the feeling of value for money.
However, the data and insights that much of this new technology generates creates the opportunity to engage policy holders more during the life of their policy.
For example, in car insurance, the use of telematics data could be used to talk to customers regularly about how they can improve their driving whilst reducing the cost at their next renewal. It’s well understood that people feel a sense of dread when a renewal comes around, fearing a policy price increase without a clear reason. As an insurer, why not reduce this surprise and help your customers maintain or reduce their premium?
If the data used to run the underwriting model changes, meaning that the car insurance policy may go up at renewal, it is better to let the customer know this early and explain why this has happened. This would increase trust and loyalty, reducing the likelihood that they might go to an aggregator when the renewal is due.
Even better, utilise predictive analytics to warn customers early of changes, enabling them to make changes in behaviour to help keep premiums down.
Understand your competition
The insurance market is made up of large general insurers through to niche specialists. Whilst brand reputation has a role to play, the heavy use of aggregators to seek out favourable deals is commonplace.
The opportunity is there for the more established brands to innovate and use their capability to invest in and truly leverage marketing technology and data to create a more trustworthy experience. For niche players, they can utilise their positioning to clearly communicate the benefits of their USP to customers.
With restrictions on the use of incentives for new consumers, all insurers need to consider other important elements of their offering and communicate this throughout the experience.
Throughout this blog series for the financial service industry, we break down the opportunities for marketers to build trust, loyalty and a superior customer experience with data and technology.
Creating human banking experiences through data-led marketing
Sagar Limbu
Our recent report, created in partnership with Braze, found that only 53% of financial services brands use advanced techniques like event-based and attribute-based personalisation when it comes to customer communications.
Using modern customer engagement technology will help financial services brands humanise the experience with their customers – as personalising each interaction using sophisticated decisioning algorithms will make the individual feel acknowledged. Real-time customer MarTech can manage two-way dialogue with customers, engaging them with the right content at the right time.
Great experiences start from the first contact
As the market grows ever more competitive and it becomes easier than ever to switch providers, creating the right first impression for your customers is essential.
It’s often thought that successful customer onboarding requires the customer to share a lot of data, but with the right customer strategy, marketing technology and third-party demographic data you can create an onboarding process that’s right for your customer without asking for more than your customer is willing to provide. Registration processes should be simple, not prohibitive to engagement, and show clear reasons for data collection. Consider neo-banks such as Plum who gamify their onboarding journey and make it simple to become a customer.
Collecting marketing consent is an often-neglected part of the sign-up process, with a series of check boxes tucked in at the end just before the terms and conditions acceptance. Improved consent processes are geared towards signing up for specific engaging content or benefits.
Education and transparency
Even though people are visiting branches less, it is still possible to create real trust through educating customers to support their decision making via your digital channels.
Many progressive banking and building society brands are now using interaction and behavioural data to point their customers to educational posts or feature tutorials. Brands can therefore help their customers to meet their individual goals, whether it’s to stay on budget, boost their credit scores, save for a new home, or other major life purchases.
Teaching customers to make the most of the digital tools available to them, and explaining how to achieve their financial goals, will demonstrate care and support. Additionally, being connected with the customer’s long-term ambitions means that bank and consumer are together for the same reason.
Humanising the experience
With Covid-19 accelerating the use of digital channels, the online experience needs to build trust by clearly acting in the customer’s best interests, like an in-branch customer service representative would.
Humanising the experience using empathy is key to this. Creating warmth and understanding around life events, in the same way a customer service representative would, is a powerful way to build that bond with your customer.
It’s critical that the customer journey promotes the value your brand brings by using every interaction, no matter the channel, to reinforce how each individual customer can financially better themselves.
Throughout this blog series for the financial service industry, we are breaking down the opportunities for marketers to create a personalised customer experience, and build brand loyalty through central decisioning engines, marketing attribution models, data modelling, machine learning and AI-driven recommendations. Continue reading at the links below:
For recent insights on how your customers feel about the experience they receive from their financial services providers, and for guidance on how you can better understand and meet shifting customer expectations, download our recent report – Banking on the Customer Journey.
How the banking and financial services sector can lean into a changing market
Sagar Limbu
In this Article
The evidence is clear, Covid-19 accelerated the pace of consumers’ changing behaviours.
Our analysis on consumer attitudes towards returning to branches highlighted a 32% reduction in bank branch visits post-covid, with even the most resistant to channel shift turning to apps and websites to manage their finances.
This is against a backdrop of other changes in the UK’s financial services sector that are impacting marketer’s abilities to connect with customers and prospects.
Retaining your savvy savers
Rising interest rates mean that people are becoming incentivised to both start saving again, and to switch savings accounts again, with savvy savers searching for the best deals.
Our recent consumer insights have found that the younger demographic are still expecting to save in the next 12 months. And it is to be expected that your competitors will increase their efforts to attract your savers to their products. You need to be ready to retain them!
Buoyant lending with a shift to the suburbs
Across the UK we saw a shift from the cities to the suburbs, driven by the opportunity to work from home more regularly. A reduced commute and a chance for more space was an opportunity many felt could not be missed.
Coupled with the government provocation of the housing policy, using changes to the stamp duty tax threshold, there has been an incredibly active homebuyer market.
However, recent economic factors have driven up the interest rates available on new mortgages and to those coming to the end of their fixed deals. Consumers are therefore incentivised more than ever to find the best available deal. This becomes a potential flash point for marketers who need to develop trust with customers so that the retention battle can be won.
Insurers need to rethink incentives
New legislation from the FCA means that insurers must be willing to offer the same incentive to new and renewing customers. Past use of aggressive incentives to win new customers’ needs to adapt to regulatory challenges.
Like the other macro conditions, this requires marketers to engage in longer-term marketing journeys with potential consumers, to win them and retain them with value driven propositions.
The need to communicate with the individual
Whichever way you cut it, there’s a lot of change to contend with for the financial services marketer.
From CACI’s perspective, we see there being winners and losers in the market across banking, lending and insurance.
The winners will be those who utilise data and technology to serve customers as individuals. To maintain engaged relationships based on trust and demonstrate how the brand is taking care of the financial interests of the individual.
Throughout our new blog series for the financial service industry (starting with this blog), we will break down the opportunities for marketers to address these challenges through central decisioning engines, marketing attribution models, data modelling, machine learning and AI-driven recommendations. Continue reading at the links below:
For insights on consumer attitudes towards their financial services provider’s marketing and communications, download this report, created by Braze in partnership with CACI. With input from over 200 financial services brands, 1,500 marketing leaders in the financial services industry and 5,000 financial services consumers, the report uncovers a surprising disconnect between what banks think and how customers feel. It also provides guidance for brands in the financial services industry to better understand and meet shifting customer expectations.
All you needed to know about the UK Census
Sagar Limbu
In this Article
What is the census and what is its purpose?
First launched on 10 March 1801, the UK census is a decennial questionnaire undertaken by the Office for National Statistics (ONS), National Records of Scotland (NRS) and Northern Ireland Statistics and Research Agency (NISRA) that asks a variety of demographic questions on age, sex, marital status, health, education, and housing.
The primary purpose of the UK census is to build a detailed snapshot of society at that current point in time. Helping national, regional, and local governments understand the people and households in their constituencies. This allows these government agencies to develop current policies or create new ones, as well as plan and fund services, including education, medical facilities such as doctor’s surgeries and hospitals, and transport infrastructures such as roads and new train routes.
The census is also used for other purposes, helping organisations and companies understand the society they interact with. This includes:
Academics and Education Institutions use census statistics to support research that they are working on.
Businesses using census information to help them understand their customers more effectively, i.e., a retail chain might use census population data to help decide where to open a new store.
How often is the UK Census, and when is the data released?
The responsibility for running the UK censuses is split between ONS, NRSand NIRSA based on their geographic region. The Office for National Statistics has overall responsibility for publishing census records and statistics for the whole of the UK.
The data from the census is typically released in phases. For instance, in the first phase for England & Wales, local authority level population and household estimates were released, in June 2022. The three census offices each have their own timetable, with outputs staggered across a period of one to two years.
Because Scotland’s census took place a year after the rest of the UK, reference dates will differ. This will impact the comparability of UK census data, for this version.
Due to this, the three census offices are working closely to develop UK-wide census records, which involves consideration of how best to meet the challenges around comparability, coherence, timeliness, and accessibility of the information.
Below is an approximate timeline of the different subject releases based on the various census offices.
LA POP – Local Authority Population Data HH – Household Estimates OA – Output Area
CACI and the UK Census
The data from the UK census is used as input for many of CACI’s products, including Acorn, Ocean and Fresco. A wealth of companies uses these products, public sector bodies, charities, and not-for-profit organisations to help them understand their current customers, constituents, or beneficiaries more effectively, as well as market their products and services to like-minded individuals that fit the same demographic profile of their existing customers, saving them both expenditure and resource.
We also use the census as the baseline for CACI’s annual Up-to-Date Demographicsrelease, which providesthe latest estimates of key census variables (e.g. age, housing tenure, presence of children). These are modelled forward using various, more frequently updated data sources.
As the census is carried out only once every ten years, this provides an increasingly more reliable view of the population than the census data itself. Up-to-Date Demographics is available at census output area level.Consistent with this and for even more complex use cases, our annual Population and Household Estimates and Projections provide counts down to individual postcode levelsandproject forward for future years.
The first results of Census 2021 were published on Tuesday, 28 June 2022. These provided estimates of the number of people and households in England and Wales at local authority level. From this data, CACI was able to provide insight into the data to help:
The Ageing Population
The ageing population shown by this census follows our own predictions very closely, so it comes as no surprise. It does however throw up two significant questions.
Firstly, what does this mean for pensions? With proportionately fewer working people to retired people, will there be a greater emphasis on private pensions to cover the state shortfall?
And secondly, what does this mean for senior living facilities? We’ve recently been pushing the message that senior living needs to be looked at more rigorously in terms of its role within the wider housing stock and that all types need to be taken seriously.
The 2021 census only serves to vindicate that, and we would encourage local authorities and senior living developers or providers to engage with the data now to understand what their existing and future residents need, to ensure we have a fit-for-purpose housing mix for an ageing population.
Regional Growth and ‘Levelling Up’ –
It is great to see regions other than London taking the top spots in terms of population growth. It finds itself behind the East of England and South West, and in joint third place with the East Midlands, in terms of percentage increase.
More noticeable for their omission from the top of the charts are those regions further from London. Wales, the North East, and Yorkshire and The Humber are lagging behind quite significantly in terms of population growth, suggesting that the pull of living within reasonable commuting distance of London is still strong.
Salaries of course have a big role to play – the closer you are to London the higher both salary and disposable income tend to be. The growth we’re seeing in the census is more or less restricted to the southern part of England, so there is clearly a lot of work to be done with the ‘levelling up’ agenda, to entice people further away from the capital.
New release
On Wednesday, 2 November 2022, ONS also released their Demography and Migration Datafor England and Wales, their second release of Census 2021 data as part of their topic summaries.
This includes an update to population and household estimates for England and Wales, which now includes unrounded data by sex and single year of age, providing even more detail on individuals who were previously in age bands.
This meant that on Census Day, the size of the usual resident population in England and Wales was 59,597,542, which was the largest population ever recorded through a census in England and Wales. This meant that the population grew by more than 3.5 million (6.3%) since the last census in 2011 when it was 56,075,912.
It also contains information on household and resident characteristics, including household size, composition, deprivation status, and people’s marital and civil partnership status. Providing detailed insight into the makeup of the 24.8 million households across England and Wales. Such as although the number of households has increased to 24.8 million (up 6.1% from 23.4 million in 2011), the average household size in England and Wales in 2021 was 2.4 people per household, which is the same as in 2011.
Migration data is also included in this release providing further information on country of birth, passports held and year of arrival, helping us to understand internal and international population changes. For instance, of the 3.5 million (6.3%) increase in population from 2011 to 2021, 57.5% is positive net migration (the difference between those who immigrated into and emigrated out of England and Wales).
How wealth and asset managers should respond to the new FCA Consumer Duty
Sagar Limbu
In this Article
New plans from the Financial Conduct Authority (FCA) for increased consumer protection for financial services users, through a “fundamental shift in industry mindset” are to be confirmed by the end of July 2022.
The proposals include a new Consumer Principle that “a firm must act to deliver good outcomes for the retail consumers of its products”.
The regulator’s Consumer Duty directive is the latest in a series of measures tackling consumer needs in the financial services and wealth management sectors.
But how do the latest rules impact wealth and asset management firms? And how can a more effective use of data help firms increase customer knowledge and drive business growth, while ensuring compliance with the Consumer Duty?
How does the Consumer Duty impact wealth management firms?
Banks and building societies have moved steadily towards digitisation and customer-first policies over the past decade, but the wealth and asset management sector hasn’t moved as quickly.
While some firms have already adopted a business model that enables customer-led and technology-enabled strategy, it is only in the past 18 months that the importance of a data-led approach to wealth management has become prominent – and many firms are still playing catch-up. The Consumer Duty may well act as a catalyst for many to speed that change along.
The FCA is worried that, currently, financial services do not always work well for consumers, who are buying products and services that are not always fit for purpose, and not continuously receiving the best customer support.
Consumer Duty creates a shift towards making firms more proactive about the suitability of their products and services, to directly meet the needs of those they are sold to.
Wealth managers, along with other financial services firms, will need to improve consumer understanding, review the entire consumer lifecycle and journey, revisit how and what to include in customer marketing, and establish new ways to measure all these areas, in order to remain compliant.
“The new duty will drive a change in culture at firms. We expect firms to step up and put consumers at the heart of what they do, and we’ll be holding senior managers accountable if they do not.” warned Sheldon Mills, Executive Director of Consumer and Competition at the FCA.
Customer marketing – who are the new prospects?
Clearly, the FCA wants firms to better understand their customers. But how do wealth and asset managers do that? What steps do they need to take to make their business fit for purpose in a digital world and comply with Consumer Duty?
Regulatory pressure provides an opportunity to capture the market – collecting data and enriching it in order to tailor distribution and marketing.
Wealth managers are seeing changes in both customer behaviours and types of customers, and are moving away from the traditional investor to hunt out wealth in other areas – as they fight for market share. Meanwhile, fintech disruptors are raising the bar with innovative offerings.
Consumer insight is key. Young investors who are creating or inheriting their own wealth are increasingly important, as the older consumer market depletes. They are joined by more entry-level investors – and both personas have very strong customer service expectations.
These younger, and often more knowledgeable, investors are the customers of the future. They know they can invest quickly and easily online and they expect the same level of speed and ease of use in all their financial dealings.
A data-driven customer experience
Firms need to better understand the current and future needs of investors, those who might have a sophisticated, historic book of customers, now need to reach a broader audience – and CACI can help firms do that.
Consumer Duty firmly indicates products need to suit their customers, and firms need to be where investors can see them in order to market more broadly. Changing expectations might include more sustainable or green investments.
Those firms that recognise the need for better customer understanding are starting to bring in people with wider customer-first experience from other industries – increasing the sector’s pool of knowledge.
It is key to firms’ long-term growth that they do more with consolidated data – because if they don’t, they can be sure their competitors will. Firms will have data on customers, but many don’t know how to make the most of it.
At CACI we can help firms:
Understand their customers
Understand the market and identify opportunities
Know where potential and current customers are located, and their value
We can help brands across the wealth management, asset management and financial services space with demographic data and behavioural insights on investors.
Wealth and asset management firms looking to grow their business need to consider the importance of over- arching information and scalable transformation. Rich demographics on lifestyle, attitude and behaviours in the investment market, can empower better target distribution activity – driving revenue growth and increasing client engagement.
CACI will:
Provide detailed understanding of current investor behaviour needs and growth opportunities
Quantify the acquisition opportunity across regions to inform growth and investor engagement strategy
Enable optimisation of marketing performance across channels
Improve distribution performance through digital direct and intermediated channels
Demonstrate compliance with Consumer Duty to show that they are looking at, and understanding, customer needs
Or if you would like to find out more about how we can help, explore our services or get in touch.
The new FCA Consumer Duty – CACI is ready to help
Natasha Cleary
In this Article
The new Consumer Duty is an important directive from the FCA to protect consumers. It recognises the need to focus on consumer outcomes and to put these outcomes at the heart and centre of the organisation.
For financial services organisations to achieve the requirements of the Consumer Duty, there is a need for change. Change will require overcoming common obstacles around data, communication plans, marketing goals and working practices.
To be in line with the Consumer Duty, firms need to know their customer, adapt their products, and use data to drive messaging.
CACI is here to help
The result is that Financial Services organisations will need to improve consumer understanding, have a complete view of the consumer lifecycle and journey, revisit the selection and messaging used in communications, and establish new means to measure.
Operational siloes, fragmented data, incomplete consumer profiles, product-oriented campaigning, and slow/linear working practices all create barriers to achieving the FCA’s directives. Our experience has been that firms may be dealing with several of these blockers at one time, requiring more holistic solutions than a traditional agency or consultancy can provide.
CACI’s unique positioning in the market as part agency, part consultancy, part data provider and part system integrator ensures that we can really drive value for your business. Our services and data products have always been there to connect firms with their customers. Some of the ways we can help:
Enriching consumer data – Nationwide rely on CACI’s demographics and lifestyle data variables to provide deeper insights on who their customers are and the size of the market opportunity
Segmenting and insights on consumer audiences – the Money and Pension Service have used CACI’s services to build a profile of the nation’s wealth and indebtedness
Fixing data quality and fragmentation – working alongside their own data teams, CACI are improving the quality, latency, and reliability of the data that Bupa holds and uses in marketing
Improved marketing and communications tools – Virgin Money have invested in market leading communication tools, CACI has designed bespoke customer journeys to leverage this new technology
New reporting and measurement – from attribution through to complex propensity models, CACI can visualise and report on the KPIs that really matter
Efficient operating models – through improvements in the people and process side of marketing operations, CACI can strip out 80% of the time required to launch a campaign from idea through to results. This will enable you to send more targeted campaigns to the right consumers
Product insights – our Retail Finance Benchmarking services provide vital insights into the market for personal loans, current accounts, savings, and mortgages which supports and enables product design, proposition development, and provides an objective measurement of market performance.
The Consumer Duty is an important directive with vital intention to build trust between financial institutions and consumers. For help with your journey to compliance, please contact either Paul Sene or Cara Bramwell to find out more.
The impact of Covid on customer behaviour and nursery growth strategies
Catherina Hyde
In this Article
As the country learns to live with Covid, CACI’s data and consumer research is revealing what the new normal looks like for the nursery market.
Customer Movement is on the Rise
Let’s start with the positives. Remember just how much more freedom we have than we did this time last year. The contrast between the two maps based on anonymised Mobile App data are stark. The map on the left shows movement activity levels in the last week of March 2021 relative to pre-Covid (Early March 2020) for Central London.
Source: CACI / Digital Envoy
Dark blue shading shows areas that movement levels were way down on pre-pandemic across much of London – not surprising given that restrictions were really only lifted in early April 2021 for all but essential activities (albeit including trips to nurseries). The map on the right is the same week this year, and shows swathes of red across much of London, highlighting that activity and visits to many of these areas has returned to almost pre-Covid levels as we learn to live with life after Covid.
Despite the fact that we are seeing record numbers testing positive for the new variant there is no doubt that many are back out and getting on with their lives after a painful couple of years.
New Behaviours and Attitudes
But we have emerged into a different world. The right-hand map shows that the recovery in movement is not universal. There are still clear areas of blue and lighter red in office dominated parts of the city, and around the major stations of London. The same pattern is seen in cities across our county.
Analysis of the data reveals that our city centres are only now returning to something close to what we would have called normal before the pandemic, and transport hubs are seeing visits about 25% down. But regional towns have grown in popularity, with visits up by about 40%. So, clearly we have changed our activities, and it looks like many of these behaviours are set to remain.
Our towns and cities are changing, and we can see it happening around us. But it’s a complex picture. Whilst some have speculated that we are going to witness a long-term boom in the suburbs as everyone moves out of our towns and cities – this is not the case. Despite the jolt that Covid brought there are too many interactions at play for all the old links to be broken.
CACI’s research, carried out as restrictions were eased, revealed that many 18 to 34 year olds, many in the target age groups for nurseries, were keen to return to our towns and cities. These included people from across the demographic spectrum with groups with very different lifestyles – from ‘City Sophisticates’ to ‘Struggling Estates’ in CACI’s Acorn classification amongst those most keen to return to urban living.
Consumers are listing eating out, entertainment and leisure activities as the top reasons for wanting to return.
In short, for many our towns and cities remain places of fun, choice and opportunity – and this hasn’t changed with the pandemic. What we are seeing is that towns and cities are responding to this need. At CACI we have never been so busy in supporting our leisure clients who are busy trying to extend their portfolios, filling the units vacated by retailers hit by the step change in online shopping triggered by the pandemic. And other urban offices and former retail units are being repurposed as urban living – a clear sign that everyone is not heading for the countryside and suburbs.
For many, working patterns look like they have changed for the long-term. Evidenced in the conversion of office space to other purposes and in the areas of blue on the map of central London in worker dominated areas. Our research revealed that workers claim that 2 to 3 days is the optimum number of days they would like to spend in the office, and this seems to be becoming the norm for many. But, it is important to remember that not everyone has this option, including most workers in the nursery sector. It is very easy to think everyone can work from home easily, but affluence, age, location and job role all clearly play a part.
Source: CACI / Digital Envoy
Analysing Kantar’s TGI survey data from 2021 shows that, even in a year scattered with various work from home advice, only 25% of those surveyed said that they worked from home every day, or some days, as their ‘normal’ behaviour.
The chart, using CACI’s broad Acorn Categories to dissect responses, clearly illustrates that it is the ‘Rising Prosperity’ that are most likely to be working from home. These are younger, well educated professionals moving up the career ladder and living in our major towns and cities. 38% of this segment claim to work from home at least some days, and 25% of this is made up of those working from home every day. In contrast only 20 or 21% of lower paid, lower qualified segments ‘Financially Stretched’ and ‘Urban Adversity’ have the luxury of even working from home some days.
Source: CACI / Kantar
As a result of this shift workplace nurseries will no doubt continue to suffer, as many will prefer the flexibility of nurseries closer to home, in line with the shift to ‘hybrid’ working, with many neighbourhood nurseries benefiting from this change. The number of parents requiring nursery spaces is unlikely to be impacted by the rise in home working, as many learnt during the Covid lockdowns that working from home and providing childcare don’t mix. However, many nurseries are likely to see increasing staffing and pricing complexity with parents expecting a level of flexibility that reflects the new-found flexibility in their working hours and location.
So, despite big changes there is no evidence to suggest a need for wholesale changes in where acquisitive nursery groups should be focussing their attention. The big urban to rural shift is not happening and indeed CACI’s research shows that even at the peak of the pandemic 10% of house moves were from villages to towns and cities. Tracking planning applications reveals huge amounts of new dwellings under construction or being proposed in our urban areas and, whilst much of this will have been planned before the pandemic, it’s not that easy to turn a tanker. It is simply not possible for such a shift to happen without fundamental changes in planning policy and housing stock.
SSo, in summary whilst the change in residential patterns are moderate it is the behaviours of those residents that have changed, and the following are just a few more key behaviour changes that CACI expect to remain:
Communities are eager to stay local
This is good news for nurseries operating well-run community nurseries. But it is increasingly important for nurseries to engage with their wider communities and larger groups need to take care not to look like corporate outsiders
Social governance is increasingly in the spotlight
With consumers expecting their suppliers to behave ethically and transparently
Minimising waste and environmental impact is mainstream
All nurseries now need to ensure that they are meeting parents’ expectations here and that they are living out the values of care for the environment that the children will inherit
Digital is critical to recruitment and engagement
There is no doubt that digital is here to stay – so if you are not happy with your website you can be sure that it is putting off potential customers and if you are not sharing key messages with your parents via emails and portals then you may get left behind
New Challenges and Opportunities
Unfortunately, with inflation and rising rocketing fuel prices, there is no doubt that many families are going to be facing increasingly tough decisions about where to prioritise their spending in the year ahead. This could impact customers’ ability to afford childcare, especially if their salaries rise above the eligibility threshold for free places, but their true disposable incomes fall.
Rising fuel costs for nurseries will compound the challenges of rising wages already driven by the shortfall in staffing that so many in the sector are facing and these need to be factored into nurseries strategic plans.
Successful nurseries should take note of these consumer and market changes, play to their strengths in these areas and they will thrive. But ignore them at their peril as the sector faces the two emerging, and partly inter-related challenges of staffing and the cost-of-living crisis.
Driving smoothly into the consumer EV market
Sagar Limbu
In this Article
Consumer demand for more sustainable consumer transport is high and market conditions support mainstream EV adoption. What do motor brands, consumer destinations and logistics operators need to know, to make the most of this electrifying opportunity?
In our fourth blog in a regular series focusing on environmental, social and governance (ESG), our focus is on electric vehicles – an increasingly common sight on the UK’s roads.
These days it’s not just celebs and influencers who parade their green credentials with their Prius or Tesla. More choice, better charging infrastructure, longer vehicle ranges, affordable finance and fiscal incentives are persuading more and more ordinary consumers to join the EV gang.
Scenes of panic over presumed fuel shortages in autumn 2021 put the growing number of electric vehicle (EV) owners in a strong position. Suddenly, everyone wanted one – showrooms were inundated with enquiries and prospective owners joined waiting lists for test drives and for the privilege of buying new vehicles.
It feels like we’re now at the point of mass adoption, with the 2030 ban on new fossil fuel vehicle sales less than a decade away. Manufacturers, dealerships, fleet operators, drivers and infrastructure owners are all adapting fast to the changing market – what does the future hold and how can data insight help everyone thrive?
Who’s buying EVs?
Government and industry initiatives designed to accelerate EV adoption need to understand differences in consumer opinions and propensity to buy EVs. CACI’s 2021 EV survey shows that age and affluence both influence consumer behaviour – even when they have the means to buy an EV, older consumers are less keen. They tend to be concerned about range, despite typically making shorter journeys. That insight can help to explore the inhibitors and shape messaging to overcome consumer concerns.
We also identified less known benefits that could make EVs more attractive if consumers knew about them.
That suggests there’s an opportunity to tell consumers what they could save beyond the obvious cost of refuelling.
Data and insight are invaluable to manufacturers who need to know who to target, both in the way they design new vehicles and the way they promote them. New brands have risen rapidly to take advantage of the global opportunity for more sustainable consumer travel. Few UK consumers had heard of Polestar three years ago – now their cars are a common sight and the brand is well known from TV and digital advertising.
We’ve worked with Mazda to help them tailor content and produce engaging campaigns that appeal to the best audiences for their MX-30 EV. Current, accurate consumer data and granular analytics are key to the “impressive” results Mazda has achieved.
Is the infrastructure keeping pace?
Service stations, retail operators and landlords need to understand the opportunity so they can make the business case to invest in charging points. They need to drill into consumer and market data for EV adoption and understand the impact on their core users and customers.
If these organisations can’t size the demand and provide suitable charging facilities, they risk losing customers to better equipped rival sites. As well as losing revenue, that could depreciate real estate assets. In our EV survey, 55% of respondents said they would be influenced to visit a specific location if it provided an EV charging point.
Energy providers also rely on insight into consumer patterns of EV adoption, so they can plan infrastructure and provision. We’ve recently worked with EDF Energy to help them plan for demand and promote their home charging tariffs. A series of highly targeted campaigns engaged customers who already own or were at the point of purchasing an EV, to provide timely and relevant info and offers.
Have EVs lived up to their promise for early adopters?
Our survey showed that improved range in the latest EVs has supported strong owner satisfaction. As early adopters trade in and trade up, there will be more second-hand vehicles available, allowing more consumers to adopt EVs. EV ownership will be mainstream rather than a novel talking point.
There’s an opportunity for EV brands to focus on the capabilities of the latest EVs, to create a tipping point for hesitant or sceptical prospects.
How much does sustainability really matter to purchasers?
Blanket news coverage around COP-26 has increased public awareness and concern about sustainability still further. This impetus nudges more consumers to look beyond their initial perceptions of EVs, because they want to do their bit for the environment.
Consumer concern has a knock-on effect for the brands and service providers they use. Fleet and logistics operators are responding to growing awareness of the environmental damage from diesel van pollution. Consumers aren’t turning away from home deliveries, but they do want to see more sustainable approaches. Fleet and light commercial vehicles are swelling the EV market. Motor industry body the SMMT shared a recent survey that suggests fleet operators could collectively reduce CO2 emissions by almost a third through a switch to EVs.
What’s next for EV brands and related commercial and consumer sectors?
The EV market is relatively new and very fast-growing. Consumer desire, mainstream infrastructure, government legislation and attractive savings are creating a perfect storm of opportunity for EV brands. Data about customer perceptions and needs is vital for competitive advantage.
Meanwhile, many other sectors need insight into who’s driving what and where, so they can adapt facilities and propositions to make the most of the opportunity. European and global brands and businesses must seek local data, because every market is different.
Despite entreaties to use more public transport, UK consumers love the convenience of their own private vehicles. And for many, the Covid pandemic has made cars feel like a safer option. Responsible EV messaging as well as smart product development and marketing can help take carbon emissions from private and commercial vehicles off our roads and out of city centres.
We anticipate that consumers will want more and more in terms of green accountability from brands and fleet operators – such as understanding the full carbon footprint of manufacture and delivery. They’ll evolve their opinions as their own experience expands. Keeping pace with these expectations and behaviours through reliable and up-to-date consumer insight is key to commanding market share.
If you’d like to know more about acquiring consumer data that can keep your organisation ahead of EV trends and markets in the UK and beyond, talk to our sustainability insight experts at CACI.
CACI’s ESG Score can help you identify which ESG factors are most important to your customers. Download our product sheet to find out more:
Learnings from CACI’s Activating Data event
Sagar Limbu
In this Article
Back at the end of November 2021, during a small window of lockdown restrictions easing, CACI held an event in London for clients and prospects. After 20 months of not being able to meet in person, it felt great to be reunited to share insights and experience.
Given the time that has passed, we wanted to make this event memorable for all the right reasons. To do this we organised client speakers from the RAC, Laithwaites Wines and Domino’s Pizza Group. Recognising that many of you want to hear from your peers rather than us.
“Activating data to deliver seamless customer experiences” was the title of the event we decided on. Granted it’s a mouthful to say, but we felt that the topic of activating data into the customer experience is overlooked. Often falling between the IT, data, and marketing functions. When it comes to delivering a customer experience strategy that connects across all channels and is consistent it requires all these business areas to work together.
In this blog post I want to pick out some of the important client messages from that event. You can watch all the videos here.
Takeaway 1: Need for multi-disciplinary change teams
Ian Ruffle and Jenny Cann spoke about the RAC’s implementation of Adobe Campaign and Snowflake. The project has been a big success for the RAC, delivering new use cases and positive benefits (including a reduction in inbound calls).
To successfully deliver this type of change, Jenny showed how RAC and CACI formed a core decision making team across technical and marketing disciplines. This group provided clear direction for the project and united teams around a single vision for delivery.
Domino’s Pizza Group shared the ingredients of their journey to deliver personalised messages to every customer. Hayley Pryde of Domino’s introduced how this transformation has been delivered through good technology, having the right people, developing test & learn processes, and then selecting solid agency partners.
An added ingredient was the need for new creative assets that can be personalised in every channel. This required new imagery, a variety of copy options, and strong integration between creativity and technology. Assets needed to work in multiple channels and be relevant to the recipient. For example, if a customer always orders vegetarian options, it’s less effective to use “mighty meaty” imagery in the campaign.
As Domino’s Pizza Group have discovered, having the best technology and processes will only get you so far if the creative assets are all the same. For this reason, they are working with CACI’s creative studio to produce a wide range of personalisable assets for performance and direct channels.
Through lockdown Laithwaites Wines saw a change in their customer profile. Whilst their loyal base of wine buyers continued to purchase, new customer groups came to the brand looking for great wine that could be delivered to their home.
With a growing base of customers, Laithwaites Wines worked with CACI to understand the UK market for wine buyers. Using Laithwaites’ data, CACI’s demographics and lifestyle data, and market research we created a market segmentation that could be applied to Laithwaites’ business strategy.
Personas and market plans were built from the segmentation, enabling the business to understand the differences in customer buying habits and needs. For each segment, core value propositions were drawn out and applied to communications. Importantly for Laithwaites Wines, the segments provided a way to calculate addressable headroom for each segment to set very specific targets for growth.
To listen to James and Sophie talk-through Laithwaites Wines’ approach to segmentation, click here.
What counts towards success on Black Friday 2021?
Sagar Limbu
In this Article
Will an upswing in the collective consumer conscience suppress spending? Is the force still strong with bargain hunters? We share what we’ve learned this year about your customers’ attitudes and behaviours towards physical and digital retail.
All of our inboxes are overflowing with urgent pleas from retailers to enter the seasonal frenzy of late November purchasing. But consumer champion Which? is warning shoppers to be wary of Black Friday bargains promoted by retailers online and on the high street.
How seriously should we take reported public cynicism about Black Friday? Many retailers and brands are pinning their hopes for a strong year end on UK consumers going big on November deals this year as they plan for an ultra-happy Christmas. As the Sainsbury’s ad says, “It’s been a long time coming, so let’s savour every moment of it.”
But trends for sustainability and localism could make a dent in post-Covid consumer exuberance, along with continued supply chain disruption. Impacts relating to social inequality and digital inclusion are also disquieting citizens and activists around the world.
Will oppositional social media coverage and prickling consumer consciences exert enough pressure to reverse Black Friday’s now traditional spending surge? We take a look at key trends and evidence that will influence 2021’s Black Friday outcomes for retailers and brands.
Do consumers trust the promise of Black Friday bargains?
Brands and retailers are understandably eager to cash in on consumers’ desire to get the most for their money in the run-up to Christmas. But according to Which? research released last week, up to 76% of people who bagged a Black Friday bargain in various categories in 2020 “later regretted these purchases.” Which? retail editor Ele Clark blames “the hype around the sales” for fuelling impulse buying. She raises concerns about the level of debt that some shoppers incur to fund their purchases, from home appliances and DIY kit to homeware and health and beauty.
Which? calls out retail giants including Amazon, John Lewis and ao.com for offering Black Friday prices last year that were higher than at other times before and after Black Friday.
98.5% of over 200 items scrutinised were cheaper or the same price in the six months after Black Friday 2020. The same applied to 92% in the six months before. That information could drive more suspicious shopping behaviour, with consumers taking their time to research deals carefully before hitting ‘buy’.
Sustainability is becoming a mainstream matter
The ethics of short-term promotions and pressure on consumers to make a fast decision aren’t the only controversial aspects of Black Friday.
In the aftermath of the COP26 summit, environmental concerns are becoming mainstream for more consumers. We hear that searches for “sustainable gifts” are up and more customers intend to shop mindfully. This could mean that shoppers will buy fewer gifts, purchase more locally or favour home-made or experience-based gifts that don’t generate carbon emissions through mass production or delivery.
The Make Friday Green Again collective of fashion retailers is taking a stand against what it regards as unhealthy patterns of consumer consumption. Brands that don’t want to take part in Black Friday 2021 are sharing Make Friday Green Again’s messages through a communications pack that hopes to encourage consumers to purchase more sustainably and boycott Black Friday events altogether.
Beyond the fashion sector, up to 85% of independent retailers in the UK are boycotting Black Friday with some going as far as closing down their websites for the day. Others will donate profits to charity or plant trees to help the environment. It’s partly a response to the wasteful over-consumption that Black Friday is perceived to encourage, and partly as a protest against the dominance of online retailers like Amazon.
This trend is not just for small independent retailers. Marks & Spencer and Next are two flagship UK retailers who don’t take part. IKEA too is taking a deliberately different approach, offering 20% extra on their buyback scheme for pre-loved furniture. These actions should appeal to sustainability-minded consumers and could support perceptions of social and environmental responsibility for the brand.
The reality of consumer choices and affordability
Not all your customers will think and act the same way. There are conflicting trends in socially and environmentally conscious behaviours and choices. PWC found that Londoners had the largest appetite in the UK for Black Friday deals in 2019, with more than two thirds planning to spend online. They also typically spend the most. This probably reflects higher average incomes in London. PWC’s latest Consumer Insights report also found that males typically spend more than females, and are more likely to treat themselves on Black Friday 2021 rather than looking for Christmas gifts.
Successful Black Friday retailers will develop a range of targeted messages to match different consumer preferences and intentions.
The stance taken by Which? implies that Black Friday hype can still be persuasive enough to lure unwary shoppers into debt – it’s a bad look for retailers to appear to be targeting consumers who may struggle to repay loans or credit card bills, particularly if the implied savings are not what they seem. That points to a need for nuanced, segmented customer messaging, for a socially responsible impact.
Last-minute disappointment from scarcities and shortages
The shortage of delivery and HGV drivers and shipping delays in the global supply chain have influenced some people to start shopping earlier, reflecting their fears that availability of some consumer goods will be limited.
GlobalData reports that over 40% of consumers believe this will be an issue. This could add to the feverish pressure of limited-time Black Friday promotions and ads, giving customers the sense that it’s their last chance to get their hands on desirable Christmas gifts. Online retailers with a reputation for being trustworthy and transparent about stock and delivery times will have a greater consumer pull.
Glitches and hitches switch customers off Black Friday online
46% said they would stop shopping with a retailer online altogether if their app crashes on Black Friday.
Our experience working with digital retailers bears this out: it’s high-risk to add in new functionality and offers at the last minute unless you’ve thoroughly tested them and have a robust ecommerce platform and data to build on.
Concerns about the robustness and capacity of retailer websites could drive consumers back onto the high street, where they may feel more confident about the face-to-face shopping experience. Nonetheless, John Lewis must be confident in its digital experience, expecting 70% of its Black Friday sales via online channels and just 30% in-store.
What we’ve learned… so far
Debate rages about which of the competing trends will be most influential and we look forward to seeing the commercial results for leading brands, revealing the success or otherwise of their 2021 Black Friday approach.
Our verdict for now:
Black Friday 2021 will still engage many consumers. More and more brands will consider the sustainability implications of promotions and will do what they can to reassure customers that they’re controlling waste and carbon emissions
Canny consumers will do their research before succumbing to email hyperbole and Black Friday countdowns
Retailers who offer genuine value and a consistent digital and in-store customer experience will do best from the event, not just on the day but in building lasting loyalty
Organisations who can track and review customer behaviour after the event will have valuable learnings to draw on for future promotional events and Black Fridays to come.
If you’d like to share your views on Black Friday or to talk to us about how data and tech can help your organisation deliver effective promotions and sustainable customer experiences, please get in touch.
How Will Our Work and Home Life Co-exist as Measures Are Lifted?
Catherina Hyde
In this Article
For many of us, COVID-19 has been the most significant, and perhaps the most traumatic, experience of our lives. It has had a huge impact on us as individuals, as a society and as a workforce. While some things will return to some semblance of pre-pandemic normality, many things have changed forever and have become our ‘new normal’.
Overnight, lockdown measures forced many of us to work from home which has led to the normalisation of remote working. This more flexible way of working has allowed more time with the kids, the opportunity to walk the dog in the park at lunchtime as well as being at home when online purchases are delivered.
Living and working locally means we are spending more time at home, spending more money on our local high streets, and supporting local businesses. In CACI’s Wealth of the Nation Report analysis that focuses on the changing movement of the population across a pandemic and the impacts of wealth touch on this point.
But How Will Our Working Behaviours Change as Measures are Lifted?
As part of our assessment of the Future of our Office Space, CACI has published a ranking of the HOT 100 Work From Home (WFH) locations. This analysis has identified the top locations with the highest volume of workers likely to change their working habits and work from home more frequently as a result of Covid.
This analysis prompts us to question whether the pandemic has affected the way our work and home life co-exist?
At the height of the pandemic last year there was a lot of discussion about whether we would return to the office and, if so when and how often? What would be the impact of working remotely and how would this affect how we communicate, connect, and create? And what will our workplaces look like if our offices are virtual and we lose those social interactions?
As Lockdown Measures Are Lifted and We Are Being Asked to Return to the Workplace, What Will Be the Outcome?
CACI’s weekly COVID analysis has shown that while there is a clear desire to get back to the office, businesses must adapt to the changing worker needs. Furthermore, we have established that 2.8 is the optimum number of days a week workers would ideally like to spend in the office in the future.
So, what will people do for the remainder of the traditional 5-day working week?
While certain businesses depend on face to face and in person experiences to exist, many more can operate in a virtual environment. They have become accustomed to using video conferencing platforms which have seen a huge surge in use that is unlikely to change in a post-COVID world.
People now want to be able to split time working between home and the office meaning office-based time will focus more around collaborating and networking with colleagues.
As remote work is adopted as the ‘new normal’, many are choosing to leave big cities in favour of more local and suburban areas which have seen an increase in flexible working environments reflect our changing behaviours and needs.
Since April 2020, CACI has been producing free weekly reports that have focused on the changing movement of your customers and our communities. Amongst many of the findings to come out of this analysis we have established that money has historically been used to buy freedom of movement, and throughout the pandemic – for those who have money – it has bought people freedom to stay still.
It is very clear from the data that affluent community groups have had the choice to stay at home and make use of local amenities, while those less affluent and more disadvantaged groups have needed to travel further for personal or work purposes.
Getting the message: the art of communicating content that will connect with your audience
Natasha Cleary
In this Article
More than ever customers expect brands to speak to them, not just literally, but with content that they relate to. It’s not enough to have a phenomenal product, a killer marketing strategy and an arsenal of digital tools – if the messaging is off, it could all be for nothing. Your content is the most direct route to connecting with your audience on an individual level, so using techniques including emotion and narrative, as well as making sure the message fits the channel, is vital to maximising every valuable opportunity.
Sorry, do I know you?
The key to on-target messaging is knowing your audience, and it all starts with the data. Once you’ve collected profile data and created meaningful segments through Tealium and CACI’s consumer segmentation tool, Acorn, you will have a deeper level understanding of who you’re talking to. You can personalise content effectively, far beyond first names, using their last interaction or other details to bring a conversation to life, effectively mimicking one-on-one communication. Knowing a customer inside out means you can signal the values that align with theirs or share their vision for a better life. And the more data captured, the more sophisticated and creative the personal touch can become.
Once upon a time…
Once you have an idea of your audience, how can you effectively capture and hold their attention? Evolved over thousands of years, storytelling is the most powerful tool you can use to compel the brain. It has the ability to communicate so much, including, by using the brand as the personality at the centre of the story, who the brand is. Good storytelling uses the power of language and, where possible, causes you to pause and reflect, making it more likely to stick in the memory.
But storytelling doesn’t need words, visual narratives are equally effective and better suited to social media. Videos can prompt a stronger emotional response and are more likely to be shared, whilst imagery can solidify feel and focus. User-generated content can help tell stories whilst having the added benefit of generating trust in the brand. Storytelling in this way isn’t a hard sell. It takes the approach of content marketing, that is, nudging behaviour through being thoughtful, relevant and engaging.
Once more with feeling
Humans are fuelled by emotion – we feel first and think second. Using language that triggers emotions we are hard-wired to respond to can be very effective. Love, fear, anger and guilt are all primitive drivers of behaviour. By knowing your audience, you can speak directly to their individual joys, fears and pain points, and ultimately inspire them to take action. For example, a car’s anti-lock braking system may help you have more control whilst driving, but if you say it helps keep your family safe, it taps into a desire to protect your loved ones and is more likely to resonate.
After the turmoil of Covid, most people feel the need for connection more than ever. The global pandemic has reminded us that we all crave the very human experience of bonding.
Using emotion to cultivate a sense of belonging can establish a connection which is more impactful and longer lasting. It goes beyond selling, it’s a way of bringing authenticity to a brand’s identity and helps the reader buy into the brand values and ethos.
Mixed messages – making the message work for the channel
Increasingly consumers take different pathways to making a purchase, having different touchpoints along the way. Whilst it’s important messaging is consistent, it doesn’t have to be adhered to rigidly. With an awareness of which audience uses each channel, the message can be creatively tailored using a tool such as Spirable to have the most impact on the target audience.
For example, Instagram is more likely to be used by Millennials or Generation Z, so messaging needs to align with their interests and needs, and the tone will be more assertive and dynamic. Email marketing provides an opportunity to pique interest through weaving more narrative, focusing on messaging that resonates with the demographic, whilst push notifications can use real-time content to engage and visuals to bring a message to life.
There’s no one quick fix to creating a message that connects with your audience. But a combination of personalisation, focus on tapping into an emotion and telling a story are more likely to make your reader sit up and take notice, and make sure your message doesn’t get lost in the noise.
The rise of EV adoption: What are the opportunities for retail operators and landlords?
Sagar Limbu
Electric Vehicle (EVs) sales in the UK increased by 180% in 2020 compared to the previous year, meaning EV’s now account for 6.6% of the overall UK car market (Autocar, 2021). The adoption of EVs has been on an upward trajectory since 2010, however, the sharp increase in sales over the past year can be attributed to three main factors:
A more environmentally conscious public. CACI’s Covid-19 national surveys have identified that consumers are thinking more ethically.
Significant investment from automotive firms into EVs and the infrastructure needed to support the transformation.
Government legislation placing a ban of sales on new petrol and diesel cars by 2030.
The combination of the three factors above means that the industry is going through a dramatic transformation. However, the implications of EVs have a further reach than just the automotive sector as, at the end of the day, people use vehicles to get to places.
CACI conducted a survey with the objective of understanding firstly, the general perception of EV’s and secondly, how the adoption of a new technology will influence the way people interact with places.
Despite significant improvements made to battery ranges, 59% of survey respondents cited limited range as the main disadvantage of driving an EV. Combining this with the fact that EV owners are now having to wait +30 mins to charge up their car, electric vehicle owners are now having to “think ahead” and plan in order to mitigate the risk of running out of battery.
This is an important factor for the property sector to consider when developing short, and long-term strategies as consumer behaviour will be influenced as a result of the automotive industry’s transformation. The data behind the survey supported this viewpoint with 55% of all respondents stating that they would visit a specific location if they provided an EV charging point.
Whilst the data suggests there is a future opportunity to capitalise on, the data also strongly supports the theory that there is a present opportunity for landlords. When looking at those who currently own an EV, those willing to change their behaviour based on the supply of charging points then increased to 91%.
This means that retailers and landlords can win over new consumers by placing charging points at their sites, allowing EV drivers the convenience of charging up whilst shopping. Furthermore, for those who benefit from an affluent catchment, this opportunity is enhanced as Affluent Achievers and Rising Prosperity Acorn groups are most likely to be to changing where they shop based on the supply of charging points.
It is also important to look at the role of service stations given that EV drivers are now going to have to wait upwards of 30 minutes to charge their car up. Consequently, service stations may need investment to accommodate for different usage patterns considering the longer dwell periods. However, in the short term there may be an opportunity for retail and shopping parks to leverage their environments and target EV drivers passing by. This goes on the principle that the environment will play a more important role if drivers are having to stop for longer periods of time to charge their car up.
However, whilst the most immediate opportunities are within retail, residential properties and offices also need to take into consideration these implications.
With the speed at which EVs are now being adopted, whereby 53% of respondents stated that they will buy an EV within the next five years, landlords need to question if their sites have the infrastructure in place to support the adoption of Electric Vehicles.
If not, they risk lower rates of return as their assets depreciate at a faster rate due to the development becoming obsolete and outdated.
For further information about Electric Vehicles and CACI’s EV survey, please get in touch.
Driving a better understanding of Electric Vehicles
Sagar Limbu
Rapid growth in Electric Vehicle (EVs) sales in recent years (180% YoY in 2020), aided by strict government emissions targets for 2030 and substantial investment from automotive manufacturers, suggests that UK consumers are all set to go along for the electrified ride. However, even as EVs now account for 6.6%* of the overall UK car market (Autocar 2021) and, 9% of our recent survey audience already own one, the gap between the perception and the reality of owning and driving an EV will need to be bridged before they become an automatic consideration. In order to capitalise on the increasing demand for EVs, companies in the automotive sector – whether manufacturer, service or utility provider – need to be able to identify and address the unique concerns of different consumer audiences.
In our previous blog “Understanding Differing Consumer Attitudes on the path to EV adoption ”, we explored how attitudes to EVs differ amongst CACI’s Acorn classifications of the UK Population. However, going electric is more of a lifestyle change than simply buying your next car and factors such as battery size and range, where you live and, the availability of charging infrastructure are all key considerations. Our survey allows us to compare the perceptions of those who don’t yet own an EV with those who do, so how does the reality of going electric live up to the promise (or threat)?
There was little separating owners from non-owners when it came to the key advantages of driving an EV, suggesting that manufacturers and advocates have done a good job of selling the dream.
*Includes sales of battery electric vehicles only, excludes plug in hybrids.
While only 28% of owners highlighted lower servicing costs as a benefit (compared to 33% of non-owners), this was reversed when it came to fuel/charging costs, which 71% of owners see as a benefit (compared to 69%).
The biggest discrepancy in response, related to EVs producing less noise pollution. Only 41% of non-owners recognised this as a benefit, whereas 59% of owners enjoyed the quieter ride their EV gave them (and those around them).
Non-owners tended to be more sceptical of the disadvantages of owning an EV, perhaps as a result of negative press and a limited understanding of their mobility requirements. Take range anxiety, or concern that an electric battery won’t provide enough charge for drivers to get from A to B without needing to stop for an extended period to recharge. 55% of non-owners were concerned by range and when coupled with worries over the number of public charge points (62%), it all sounds very doom and gloom.
But compare that with the perceptions of owners, where only 36% worry about running out of charge and 40% about the access to public charge points and it does start to sound more manageable. Generally, today’s EVs can cover a range between 150-300 miles and the latest Zapmap figures (April 2021) show there are more than 23k public charge devices at almost 15k locations in the UK.
Whether owners or not, respondents across all Acorn categories believe the biggest advantage of an EV is the reduced air pollution. And while cost of purchase is still a concern, it should be addressed as more EVs enter the market and second-hand vehicles become available. Knowing which benefits to promote and how to ease the concerns around perceived disadvantages is critical to delivering the right messages to the right audiences.
At CACI, we’re helping our clients to drive the electric revolution
Whether using an off-the-shelf customer segmentation like Acorn, a bespoke approach based on first party data alone or a hybrid solution combining elements of both, driving engagement from your audience will depend on your content and messaging. It’s clear that individual motivations for purchasing an EV will need to be exploited, while more importantly, concerns regarding owning one, will need to be addressed head-on.
It’s widely agreed that the purchase consideration period for an EV is substantially longer than for a new petrol or diesel model. So, it’s important to be able to identify which purchase phase an individual is in – awareness, consideration, purchase – to understand what information and content they’ll need to progress through what could be a longer journey than normal. To do that, CACI creates detailed contact strategies that allow brands to nurture their audiences until they’re ready to convert.
We worked closely with EDF Energy to identify which of their customers might already own or be likely to purchase an EV. By using CACI’s Acorn data and TGI profiles, overlaid onto their customer segments, we were able to design and deploy a series of highly targeted campaigns to upsell their EV tariffs.
More recently, our Data Science team have created a ‘propensity to buy EV’ model that has enabled Mazda to target the best audiences for their new all-electric MX-30. Through our Strategic Consulting and Campaign Engagement teams, we have delivered tailored campaigns and engaging content to the best audiences.
The innovative approach taken by CACI to launch our pivotal model, particularly the impressive use of data in forming the customer journey, has led to results that speak for themselves.
James Crouch, Customer Insight/Digital Transformation Manager, Mazda
Speak to us if you have any questions or want to learn more about our survey results.
Getting started with customer segmentation
Sagar Limbu
In this Article
Segmentation in marketing isn’t a new concept. But as big data gets bigger, many marketers are only nowSegmentation in marketing isn’t a new concept. But as big data gets bigger, many marketers are only now realising the benefits of defining customer groups and developing the right engagement strategy.
At CACI, we’ve never been busier, building segmentations for clients across all kinds of sectors – retail, charity, travel, financial services, leisure, and utilities.
If you’re thinking about building or commissioning your own segmentation, there are a number of important factors to consider before going ahead.
How do I choose a segmentation model?
There are several ways segmentation can help your business. Typically, our clients use segmentation to:
understand their customers better;
increase customer engagement;
improve targeting and personalisation;
inform product development;
help position products or brands;
and size their market.
It’s worth noting that some segmentation objectives can work against others.
For example, if your primary goal is to inform product or proposition development, then a needs-based or attitudinal segmentation may be the most relevant. But this type of research-based segmentation can often be challenging to map onto a customer database, making it difficult to be used for direct targeting.
It’s why you need to be clear about exactly why you’re segmenting, including how the data will be used, by whom, and in what context.
Before starting any segmentation exercise, ask yourself these key questions:
What are your objectives? Get a clear understanding of how you want the segmentation to help your business to achieve its goals. Remember that a segmentation can’t always do it all.
Who will use it and how? It’s vital to recognise each way you want to use the segmentation, to inform how it’s created. For example, consider whether segments need to be coded onto your customer database, or whether your media planners will need to build segment-tailored campaigns.
Is your project owner empowered to make decisions? Conflicting objectives or opinions over a segmentation’s purpose, or its application, mean it’s important to have a project owner who’s able to prioritise and make key decisions.
What data is available? You can build a segmentation based on all kinds of data – attitudes to purchase, transactional history and email engagement, geography, demographics or lifestyle characteristics. The key is to choose the data that best meets your overall objectives. And remember, anything you don’t use in your segmentation build can still be used to profile your segments once they’re created – giving you a clearer picture of each group.
Begin your segmentation journey on the right foot
Even before you start making decisions, it’s important to get the right information, and define what success will look like. For example, in our client work, we talk to key stakeholders using the four questions above. And only then do we start to design and build a segmentation.
Here are our three top tips to begin your segmentation journey:
Have a core purpose – that’s clearly linked to your overall business objectives. Having a clear view of what you want to achieve is the cornerstone of a successful build.
Ask whether segmentation is the best option – a reality check never hurts. We’re big fans of segmentation, but there may be another option which fits your business objectives.
Think about what your users need – understanding each way your segmentation will be used. This will inform how the segmentation should be created and what data you’ll need to do it.
Customer segmentation: it’s all in the planning
The key to a truly useful customer segmentation is good planning.
The more data you have at your disposal, the more options you have. And that makes it all the more important to think clearly about what kind of segmentation you really need.
If you’d like to learn more about segmentation, or would like to talk about your own customer strategy needs, get in touch with one of our experts.
Covid and the Future of Population Forecasts
Sagar Limbu
In this Article
It’s hard to know the current population, let alone predict populations accurately for 2050 and beyond. Yet that’s what many of our clients are required to do for long-term planning.
As we flagged in our recent round-table on the challenges of population forecasting, the government are currently using two different estimates of the ‘current’ population to present the latest Covid vaccination rates. This explains why the English national rate is higher than any of the regions – a mathematically impossibility raised in a recent edition of Radio 4’s “More or Less” podcast.
This is why it’s important to start from a consistent and robust estimate of the current year population by age and gender that users can rely on, at a local level. Something that CACI achieve using a proven methodology respected by JICPOPS, the Joint Industry Committee for Population Standards, at Postcode Sector level.
We then model it right down to the unit postcode level needed by our many clients that rely on us for an accurate understanding, not just of population numbers, but also their demographic and lifestyle characteristics.
Building on this solid base we project forward nationally as far as 2069 using a consistent set of inputs at a granular geographic level to give credible and affordable ready-made local forecasts. Inevitably the uncertainty of forecasts increases as we look further forward in the crystal ball and we offer custom solutions to our clients seeking to tackle forecasting in areas of greater uncertainty using bespoke inputs.
An uncertain future
But, despite increasing computer power and open data access, it is getting harder to forecast over long-term horizons. The following are just a few of the challenges faced building forecasts based on today’s uncertainty.
It’s been 10 years since the last Census gave us a solid population base, and many don’t realise we have a long wait until the 2021 Census can feed the latest forecasts. And whilst the ONS reports a great response rate, there may be local nuances resulting from capturing the data during a pandemic.
The jury is still out on where Brexit will level out on the nation’s migration patterns and even climate change could start to impact where people can, or want, to live within current planning horizons – potentially reshaping local populations from a complex mix of local and international movements.
This is before we even think about the unknows from potential changes in planning policies that have moved up the agenda only this week following the Chesham and Amersham by-election.
And then there is the uncertainty from Covid. This week it was widely reported that UK deaths exceeded births for the first time in 40 years and sadly we know that death rates in specific age and demographic groups have far exceeded long-term patterns, making trend-based forecasting harder.
But will Covid also cause long-term change in local populations in other ways?
Will university cities become a thing of the past, now that lectures have moved online? Will families seek to support their older relatives closer to home after the challenges seen in the care sector? Is the ‘race for space’ out of our cities here for the long-term or will people have to return to work in the office despite our survey revealing that most want to return less than 3 days a week.
In short, there’s a lot of uncertainty. And you can be certain that any of these trends will vary locally and by demographic group.
Our use of mobile data and surveys during Covid has revealed clear insights into the behaviours of consumers during the different stages of the pandemic that can support decision-making into the uncertain future.
I’d love to discuss how we can support you in creating future scenario models using our data. Please get in touch and we can discuss your challenges in more detail.
Paul Langston
Associate Partner | Communities & Government
plangston@caci.co.uk
Understanding Differing Consumer Attitudes on the path to EV adoption
Sagar Limbu
The market for Electric Vehicles is growing consistently – of that there can be no doubt. But market statistics only tell one part of the story. While we are clearly on a path towards mass EV adoption there are still many different opinions about electrification – some see advantages, while others perceive disadvantages – and consumers will weigh up these views differently as they make their decision about whether to purchase an Electric Vehicle.
Our survey suggested that many consumers are thinking positively about Electric Vehicles. 42% of respondents said that it was likely that their next car would be an EV, with 64% of those suggesting this purchase would happen within the next 2 years. But this level of engagement is not consistent across all consumer groups. In order to bring more consumers on board it is necessary to understand more about the attitudes and concerns of certain groups in order to realise the potential within them. Because it is when we overlay the survey results with Acorn (CACI’s powerful classification of UK consumers) that we see some fascinating results.
For instance, the survey identified that Affluent Achievers (the wealthiest household group) who perhaps would have been considered a core market for EV’s are only marginally more likely to say they will buy an EV as their next car (48%). This is because when we drill-down into this category we find that affluence is not the only issue – age plays a significant part too. The older, affluent groups within this category (specifically the Group called Mature Money) are far less likely to say they will purchase an EV next (42%) than the slightly younger “Executive Wealth” (51%).
Ask why, and it appears that Mature Money still consider battery range a key obstacle, despite their being more likely to make shorter trips. Importantly, unlike other Acorn Categories, both Executive Wealth and Mature Money are not particularly concerned about the provision of public charging points – probably due to the likelihood of living in a detached house where they could place a private charging point. But it is definitively range anxiety that is most pressing for the older more affluent groups.
This is a prime example of how the market can accelerate the adoption of EV’s among these consumers, allaying their concerns about range and amplifying the convenience factor (and reassurance) of charging at home. Furthermore, these consumers are financially savvy, the survey shows they recognise the long-term savings on cost-of-ownership that EVs bring so these factors need to be amplified with these groups to get them on board.
With EVs it’s clear that the car buyers of the future may not be the same as the car-buyers of the past. Rising Prosperity (younger professionals, often living in metropolitan environments) show the greatest inclination to purchase an EV (12% above the average). Interestingly, these consumers have not previously shown much interest in car ownership, preferring instead to use other mobility solutions (e.g. public transport or taxis).
One factor that has been identified through CACI’s wider research is how the spread of Covid-19 has resulted in these consumers looking towards private mobility solutions in the attempt to avoid public transport. As a result, they seek the benefits of private vehicle ownership without compromising their concerns for the environment.
However, despite being engaged in the idea of owning an EV, they appear unwilling to commit as they are more likely to wait 2 years or more before purchasing an EV. Price-point is clearly a big issue for this group, with higher living costs and relatively low disposable income, they are more likely than any other Acorn Category to admit that price is their main barrier to entry. Moreover, this group are likely to be living in urban high-rise flats or terraced accommodation so may not have the luxury of private charging points. This is identified in the survey as they are most likely to suggest that a lack of public charge points as the main barrier. In all areas of life convenience is key for this Acorn Category, so while they may be less phased about issues to do with range, they are put off by the perceived inconveniences of lack of access to a charge point (private or public). As a result, the market needs to do more than just offer an affordable range of EV’s. Investment in public charging infrastructure, ensuring it is accessible and convenient (encouraging further investment where development is still lagging) will be crucial for getting these groups on board.
The final Acorn Category we focus on here is Comfortable Communities – characterised mainly by middle-affluent households. If EV ownership is to hit the “mainstream”, then surely these are Groups where adoption needs to increase the most. The survey indicates many variations in attitudes across this Category, although price is a common theme in their perceived disadvantages and barriers. Particularly interesting is the observation that respondents coming from the Groups that are characterised by rural populations are still reluctant to view EVs as a viable mobility solution.
Only 36% say it is likely that their next car will be an EV and 67% specifically quote range as a disadvantage. While these rural Groups do acknowledge the economic advantages of ownership and recognise the convenience of private charging, they also see a lack public charge points as a significant barrier to ownership. Furthermore, it is within this Category you will find the highest likelihood of consumers stating that it is the lack of an established second-hand market for EVs that is putting them off. Therefore, while there are undoubtedly challenges in attracting these consumers to EV usage in the short-to-medium-term, the long-term prognosis looks good, particularly once the second-hand market for EVs becomes more established.
These results of this survey are fascinating and show that public perceptions of EV ownership are driven by consumers’ age, lifestage, affluence and where in the country they live. Government and industry initiatives to accelerate the rate of EV adoption need to be aware of the nuances and differences in consumer opinions and ensure that each concern is addressed appropriately as the industry looks to make the next big leap in EV adoption.
Please get in touch with us if you have any questions or want to learn more about our survey results.
Four crucial questions ask about your single customer view
Sagar Limbu
In this Article
Discover whether you have a source of insight you can rely on for business decision-making or if you need to address inaccuracies in your data sources with an identity resolution project
An error-free, up-to-date and de-duplicated Single Customer View is the holy grail to deliver exceptional, personalised customer experiences. It’s also vital so you can analyse customer behaviour and campaign performance continually, evolving and adapting them to sustain performance.
Of course, it’s not a simple aspiration for a modern, competitive and fast-growing business. With multiple data sources in a range of systems and repositories, real-time data flowing in and out and an array of customer channels, you have your work cut out.
The rewards of getting the Single Customer View right are compelling – truly personalised marketing, exceptional customer engagement and loyalty that deliver great campaign ROI, revenues and profits. With a deep understanding of what your customers want and need, driven by highly relevant engagement and analysis of customer behaviour and propensities, you’ll have the insight to design and deliver what your customers want ahead of your competitors.
Without an accurate Single Customer View, it’s impossible to achieve that level of sustained performance. Errors in data create a lack of trust, both within the business and with your customers and audiences who are on the receiving end of poorly targeted campaigns. Campaign planning becomes subjective rather than data-led, while customers turn to competitors who can deliver the experiences and information they want in a timely and relevant way.
FOUR CRUCIAL QUESTIONS
You need a positive answer to all four of these questions about your Single Customer View, if you want it to be a reliable and effective source of decision-making insight:
Does it hold unique, real-time customer records?
Is all the data clean, reliable and standardised, with matched addresses?
Does it bring together customer data from every online and offline source in your organisation?
Is it scalable for future needs?
Not many organisations can answer all four questions with a resounding yes. If you have any doubt about the integrity of your Single Customer View, or if you don’t have one that you can rely on, you need to take action quickly.
To make it easier and quicker to fix or establish your Single Customer View, CACI’s specialist data team has developed the ResolvID application. It’s a powerful tool to create a trustworthy source of customer data for reliable analysis. It resolves data from disparate sources – including your CRM, e-commerce and finance systems as well as offline data and mobile apps. You can use the accurate and unified outputs with confidence for analytics and data science, campaign activation, BI and reporting.
If you’d like to find out more about how ResolvID can help you clean up your Single Customer View so you can deliver high performance campaigns and analytics that are trusted by everyone in the business, get in touch with our team.
Identity resolution robust compliance
Sagar Limbu
In this Article
Get your PII data under control to help mitigate the risk of reputational damage and financial penalties.
Organisations need to be able to demonstrate that they know where all the Personally Identifiable Information (PII) they hold is located and how it’s linked to specific individuals. If you work in a highly regulated sector, the demands and penalties here will be particularly stringent. Obligations may vary by territory, and even between US states. In the UK and Europe, GDPR regulations apply to any data controller.
Identity resolution is a key discipline for responsible organisations who collect data from more than one source about individuals who engage with them or provide personal information of any kind. It means being able to gather all PII data from across a range of systems about an individual. A consistent identity resolution process is the only way you can be sure that you are delivering marketing experiences and engagement in a responsible and compliant manner.
YOU NEED A FULL REVIEW OF DATA IN YOUR DIVERSE SYSTEMS, SOFTWARE AND TOOLS
Compliance is made harder because even if you use the latest digital campaign delivery platforms, you’ll likely have a number of legacy systems, a diverse estate of software and some cloud-based tools in the mix. Somehow, you have to resolve identities across all of these.
The first step is to assess the risk – you need to examine all the data you hold across the organisation and make sense of it. This is a challenge, because your data will be fragmented and the quality will vary. You’ll need a thorough and systematic approach that takes in finance, CRM and e-commerce systems, to address:
Accurate data capture and storage
Duplication of data and customer records
Data validity and standardisation
Maintenance of data and recency of updates
Data understanding
With a complete and accurate assessment of the quality and completeness of your data, you can look to improve your data collection, storage and identity resolution processes to avoid non-compliance in the future.
Tackling identity resolution for data compliance across your organisation is a daunting task. CACI’s experts have developed the ResolvID application to help customers with complex data and system estates to manage identity resolution reliably.
ResolvID can bring together data from multiple sources, standardise and cleanse it then report on it to reveal issues that need tackling. It’s ideal for managing compliance risk and mitigating against fines and reputational damage. It also provides the consistent, unified customer data you need to deliver successful personalisation and differentiated customer experiences, for revenue and customer growth.
If you’d like to find out more about harnessing ResolvID to assess and tackle your compliance issues, get in touch with our specialist data team.
Identifying the unique customer in data lakes and data warehouses
Sagar Limbu
In this Article
HOW IDENTITY RESOLUTION ENABLES ADVANCED PERSONALISATION IN BIG DATA ENVIRONMENTS
Most organisations have plenty of data. The issue is not how much you have, it’s what you can do with it. You may be sitting on a goldmine of data insight, but you can’t use it to refine personalised communications and marketing unless you can connect it with the digital platforms and tools that will deliver the personalisation.
Tackling this challenge is key to success in a world where consumers are increasingly intolerant of content and approaches that aren’t directly relevant to them. You need to use all the information you have to create unified identities that can inform personalised customer experiences, if you want to compete effectively.
The problem becomes more acute if you are using a data lake as the primary store of customer data. The concept and architecture of data lakes do not lend themselves to the enforced structure, maintenance and standardised logging that good identity resolution requires. At the opposite end of the spectrum, more traditional data warehouses can lack the structure or ability to capture and use large quantities of digital data which can form the backbone of modern identity resolution. These platforms may also be difficult to integrate with other MarTech and AdTech.
TACKLING IDENTITY RESOLUTION IN DATA LAKES
If you work in a big data environment, you may struggle to identify unique customers. It can be risky to rely on insights developed from data lakes, because they have no enforced structure at the point of data capture. This makes it challenging to define a customer view in a consistent manner, with all data points incorporated.
CACI’s identity resolution application ResolvID has a smart way of tackling this problem. It takes in all potentially identifiable information as it’s loaded into the data lake and continues to iterate and develop the customer picture over time. It adds up small quantities of data from sources including transactions, ClickStream data and geolocation to build the identity of a customer. The structure of the customer is defined within the platform: ResolvId makes its keys available for use within any and all resources.
TACKLING IDENTITY RESOLUTION IN DATA WAREHOUSES
If your organisation uses enterprise or operational data warehouses, it can be difficult to connect the finance, CRM and order data held within them directly with digital customer data platforms (CDPs) that serve web, automated marketing and mobile app content.
CDPs maintain digital identifiers, but they need a single customer identifier to truly connect the business with digital channels. Because of the complex nature of data held in the data warehouse, it can be challenging to resolve to an individual’s identity.
Using ResolvID as a middle layer, you can create a unified identity and identity graph that can work in both environments. It connects the systems to enable rapid deployment, unlocking value in your data for personalised campaigns. You’ll achieve a single view of the customer and can report crucial unified measures such as lifetime value.
Read the previous blog to find out factors to consider in delivering personalised content and marketing that fuel sales and retention in competitive consumer markets. Get in touch if you’d like to discuss identity resolution in your big data environment with one of our campaign data experts.
Tackling today’s complex challenges for identity resolution
Sagar Limbu
In this Article
Your customers and prospects want and expect you to communicate with them as individuals. It’s a very natural human desire – no-one wants to feel like they’re just a data point.
Today’s sophisticated data management and campaign delivery technology makes this possible in theory. But effective personalised communication has become more complex in recent times because of the challenges of identity resolution.
Identity resolution has always been important. It means matching identities across different touchpoints to create a unified profile for every customer. The advent of GDPR intensified the need to use identity resolution to manage data preferences robustly across channels and media, to comply with data protection laws.
But legal compliance is only one reason for the extreme complexity of the identity resolution challenge today. For marketing personalisation and for analytics, you need an accurate view of an individual, so you can always communicate with them in context of who they are and what matters to them.
We need to be able to resolve identities better, faster and more efficiently across a much greater amount of data to keep pace with competitive pressures and market demands.
CONSUMERS ARE UNFORGIVING
Your customers are ever more demanding – they want and expect to know about the right products and services at the right time and to be served content that’s relevant to their current preferences. 63% of customers say they will stop using companies who deliver poor individual marketing, according to data cited by the Forbes CMO network.
DIGITAL BEHAVIOUR IS CONSTANTLY EVOLVING
There’s an ever-growing number of channels enabling consumer engagement with brands. Consumers also have more devices. They use them to graze across a range of channels and media – frequently their interactions are superficial and transient. They no longer adopt a consistent pattern of behaviour, nor do they always log in or identify themselves directly when they view content.
YOU CAN’T RELY ON THIRD PARTY COOKIES
Thethird-party cookie is on its way out. That makes it harder to connect interactions through online advertising on third party sites. First party data is becoming more important, and it must be accurately resolved with other sources.
SOPHISTICATED TECH CAN OVERREACH YOUR CAPABILITIES
Technology is at hand to help and many vendors are pushing their solutions. These are based on complex data science and may include visualisations, digital reporting platforms and next best action platforms. Many are excellent tools, but you need to bring your data together in a consistent, de-duplicated way before you can obtain value from them.
THERE ARE SHADES OF GREY IN DIGITAL IDENTITIES
In the previous digital era, identity resolution was relatively simple – you either knew or did not know who a person was. But it’s no longer black and white. You can also personalise and understand preferences without knowing exactly who the individual is, learning about them through behaviour and touchpoints.
These factors all create obstacles to delivering the personalised content and marketing that fuel sales and retention in competitive consumer markets.
Organisations need to upweight their data science and marketing analytics expertise to deal with the ever-evolving challenges of identity resolution and get the best value and differentiation from their digital marketing campaign tools and tech.
Increasingly, clients are asking CACI to step in as an expert third party resource to tackle these challenges, using the purpose-build ResolvID solution.
CACI is a frontrunner in identity resolution and has pioneered innovative ways to consolidate customer data since the issue first arose. We started with matching services based on name, surname, address. Today, we have built far beyond that expertise to create ResolvID, a real time API-driven product that learns as it resolves a wide range of different data sets. It can also address digital applications where there may be no first party identifiers, instead using IP addresses and device IDs.
Our next blog will be to find out exactly how identity resolution supports advanced personalisation, compliance and accurate analytics, and why this is crucial for your success in today’s digital marketplace. Or get in touch if you’d like to discuss how we can help you tackle the challenges of identity resolution in your customer data.
Maximising profit in the e-commerce boom
Sagar Limbu
In this Article
THE TURNSTILES ARE OPEN: IT’S TIME FOR INTEGRATED CONSUMER DATA INSIGHT TO LEAP JUMP ON BOARD THE RETAIL LOGISTICS MERRY-GO-ROUND, IN SUPPORT OF EVERY FUNCTION
The explosion of e-commerce in the last nine months is putting fulfilment networks under huge strain. The Covid pandemic has accelerated consumer behaviour by five years in just a few months.
Retail and logistics thinking needs to speed up to the same pace. That’s a tall order for systems, processes and strategies that have evolved gradually over a long period in separate business functions.
Because the pressure for change comes from consumers, the key is to apply historic and predictive consumer data to B2B systems. At the moment, that doesn’t happen consistently throughout the retail fulfilment cycle. Until now, comprehensive, integrated consumer and commercial data analytics have not been available for cross-functional use.
WHO OWNS CONSUMER DATA INSIGHT IN YOUR ORGANISATION?
Today, consumer data tends to reside within the retail and marketing team. It isn’t shared with decision-makers in logistics, supply chain and location planning. They plan their provision and services based on historic performance and their own forecasting models.
Traditionally, consumer data is used at the front end of the retail supply chain. Brands and stores analyse consumer needs and channel preferences to determine their ranges, product specification, pricing, channel mix, positioning and advertising messages. Customer data is readily available from epos and e-commerce tracking to inform procurement, product design and marketing.
Most successful retailers have a strong and established capability to use their own data, supplemented with external market research, to predict and meet consumer demand and trends. this means they can consistently source, stock and market the right goods in their physical and virtual shopfronts throughout the year.
That’s a big tick in the box for the retail, marketing, digital and store operations teams. But what happens next? The process of getting the goods to the customer is handled by the logistics and supply chain team. Do they have the same foresight into customer demand in terms of fulfilment, so the whole process is completed seamlessly for customers?
PROFIT IS A COLLECTIVE RESPONSIBILITY
Customer data staying in the retail silo has an impact on profitability. Procurement mark-up netted against retail operations costs may hit the profit target for products, categories and ranges. But fulfilment and logistics can cancel that out if stockholding isn’t optimised in the right locations or the pricing of universal consumer delivery methods is out of kilter with the real cost of supply.
The logistics team is also crucial in delivering an excellent end-to-end customer experience. Their work is often longer-term, because changing warehouse locations and bringing physical stores online is usually slower than specifying and sourcing a new consumer product.
This is an area where costs and efficiency are often harder to measure and understand as they build up across the operation. There’s a big opportunity to save money and improve performance with end-to-end analysis.
Defining consumer demand in different regions and types of logistics catchment is key for location planners to optimise the use of their existing sites and networks and to determine new store and depot locations.
The final mile has long been recognised as the most expensive part of the fulfilment process. But in fact, the final metre is even more critical. Understanding the exact nature of the address you’re delivering to makes a big impact on costs. The difference between a semi-detached house with easy parking on the driveway and a top floor flat on a red route can be ten minutes or more in courier time and efficiency.
UNDERSTANDING REGIONAL DIFFERENCES SUPPORTS FULFILMENT PROFIT AND EFFICIENCY
The same insights should influence the choices of delivery method that retailers offer to e-commerce consumers. Flat fees for postal or courier delivery may be profitable for sending a small item via the Royal Mail, first class. The same fee doesn’t necessarily cover the cost of transporting a bulky item from a warehouse on the southern coast of England to a domestic address in the Scottish Highlands, using a lorry to move it between depots and an overnight courier for the final leg of the journey.
Logistics managers need to understand likely consumer demand at the same time as retail buyers, in order to feed in accurate costs and make provision for responsive fulfilment. And they need to understand it regionally as well as nationally. It’s this information that allows logistics providers and clients alike to manage and measure the effectiveness of their third party logistics (3PL) activity. As client, you can use this data insight to challenge or work with your 3PL to improve efficiency, for everyone’s benefit.
Profitability is everyone’s responsibility in the retail supply process, from marketing right through to end user fulfilment, whether that’s at store or on the doorstep. Strategic and tactical decisions in all these functions need to be informed by the same consumer data insight. It’s a continuous loop of demand and supply that needs data to flow consistently around, reflecting real-time change so that every department can work to the same demand patterns.
THE MERRY-GO-ROUND IS SPINNING: WE CAN HELP YOU JUMP ABOARD
How do you intervene, given the perpetual motion of this carousel of demand and supply? It’s spinning ever faster with the twin pressures of fast-changing consumer habits and fiercer competition. Where can you jump on to the merry-go-round to set the data flow in motion throughout your retail supply process?
At CACI, we have a unique capability to help you jump aboard and infuse consumer data insight into every function in the retail supply continuum. understanding customer behaviour and preferences is crucial at every stage.
By aggregating small gains throughout the fulfilment process, you stand to make big savings.
We can help you drive value out of data and insight across every business area. From store network strategy to digital channel management, from warehouse optimisation to route planning, we can empower your retail business to deliver goods to consumers rapidly, profitably and competitively across the UK and globally.
We can help make your entire network more efficient and responsive – from stock availability to final metre delivery. Talk to us about driving competitive advantage and supporting sustainable retail growth in the fast-changing world of 2021 and beyond.
Three opportunities in Food Box delivery
Sagar Limbu
In this Article
Looking back at 2020 and we can clearly see that some sectors experienced a lot of pain while others have thrived and grew hugely in demand. A black swan event like a pandemic could not have been predicted, but even before that a shift to online shopping was gaining momentum for years.
Last year businesses that were digitally native have fared a lot better than those that relied purely on the physical presence in neighbourhoods and high streets. In Grocery we have seen propped up demand across the board with the unfortunate shut down of the leisure sector, but online delivery and local convenience channels have done especially well.
Food box delivery concept is driven by three big trends in grocery sector, a demand for convenient solutions, personalisation and being able to transact online. This offering has been a part of the grocery channel for a while but has really showed how uniquely valuable it is in 2020.
Our recent consumer survey suggests that in 2020 16.5% of respondents ordered a food delivery box and 56% of those who use food boxes order at least fortnightly. Operators that were able to scale up the delivery infrastructure won big in 2020, gaining that initial share of the market.
We can now see how the competition in the space is intensifying, food box delivery operators are working hard on differentiating the offer and capturing the desired section of the market. Food box delivery services are now serving a variety of consumer needs, from routine grocery top ups, to value boxes, to unique dining in experiences.
2021 has already seen Morrison’s move into this space with £30 food box offer targeting families, Booths launching its ‘Let’s Cook’ boxes and Parsley Box securing over £5.2m to expand and target baby boomers.
It is clear that food box delivery services will keep growing in importance in 2021. from our recent shopper survey, we know that 18% of customers plan to use food delivery boxes more in the next 12 months with this jumping to a quite extraordinary 31% in London showing the regional variation in demand for food boxes.
It should be acknowledged that different shopper types have different demands and criteria of choice when it comes to choosing whether to use a food box and who to purchase from.
For example, the grocery shopper type Families on a Budget who are larger families with multiple, often younger, children living at home plan to use more delivery boxes going forward than the UK average. They typically shop at retailers such as Morrison’s, Asda and Iceland so Morrison’s new family food box offering will have great appeal to these shopper types.
In contrast younger, affluent shoppers are seeking health-conscious choices and inspiration in their decision to purchase a food box leaning to brands such as Mindful Chef to fulfil this mission.
Three challenges for the food box delivery sector to solve in 2021
The pandemic has undoubtedly caused a surge in demand as we seek alternative ways of both treating ourselves whilst restaurants are closed and getting our groceries whilst supermarket visits are kept to a minimum.
In fact, 38% of those ordering food delivery boxes said one of the main reasons for doing so was to avoid going to the supermarket. The next 6-12 months will be crucial for companies looking to grow a loyal customer base to emerge as a larger sector at the end of the pandemic.
As the risk factors of supermarkets begin to decrease food box delivery companies will need to tackle a number of obstacles to remain successful. Here are the three main areas to focus on to drive further growth in the sector in 2021:
Laser focus on customers
Customers desire personalisation and food box delivery companies are in a unique position where they can engage with customers and really understand what ingredients they like or dislike and manage the future interactions better. Real brand growth happens when new customers are added to the brand.
Finding new customers and knowing how to tailor your communications will be the winning recipe. But before finding new customers it is important to understand who exactly your current customers are, where else they shop, what brands they like and what is important to them.
Utilising the right technology to stand out and deliver intuitive customer experience
The world of customer data platforms and CRM systems is ever changing and to be at the top, companies need to upgrade and stay relevant. Modern solutions allow you to manage the customer data in real time, analyse campaign impact and code up new customers as soon as they have made a first purchase or inquiry.
Customers stumble across different parts of the journey, for example not checking out at the last moment or not finding the right product or promotion. It is important to have a tailored communication stream with those customers to convert them in to the first sale while keeping the acquisition costs low and to ensure the repeat purchase happens.
Keeping delivery costs low and serving customers in the most effective manner
Saving money and time on the very expensive logistics side of the business will allow for great ROI and ability to direct funds to customer acquisition and loyalty building. Effective route planning, holding the best-in-class datasets on addresses and providing precise instructions to delivery drivers will be one of the factors that differentiate the market leaders with runner ups.
Food box delivery is an extremely exciting space to be in and the market cap of this sector is expected to grow, however, like in any growing sector it attracts new entrants and the attention of large retailers and FMCG players.
Competition intensifies and with more than 20 players in the market some consolidation is imminent. At CACI we can help tackle the big three challenges that are now in front of the sector, building a strong customer understanding and growing organically through customer acquisition, getting the most out of complex data platforms and saving time and costs on logistics.
If you are interested in tackling the above challenges and outcompeting in the crowded space, please get in touch as we have developed unique solutions to unlock growth in the sector.
The future of betting and gaming
Sagar Limbu
In this Article
As online betting and gaming grows in popularity, so does the exposure.
Exposure from customer safety (or exploitation), exposure from regulators and exposure from competition. Which leads to the fundamental question
How can operators continue to grow player value whilst navigating the consistent challenges around safer gambling, fierce market competition and regulatory compliance?
We have taken on these factors and explored the challenges (both existing and future) and opportunities they present, along with providing suggestions on how they can be most effectively anticipated and managed.
To address these challenges requires a combined approach based on strategy, data and technology – incorporating cutting edge technologies including central decisioning engines, marketing attribution models, data modelling, machine learning and AI-driven recommendations.
Within our whitepaper, CACI make 4 key predictions that will have big impacts on the future of betting and gaming, and how operators can ensure they anticipate the changes to turn these into big opportunities.
Find out how Covid-19 could change the marketing landscape, what extra factors to consider in the future of responsible gambling and how central decisioning might be the answer to a progressively more complex environment.
Adapting to change in your community: Lifesaving data for fire and rescue services
Catherina Hyde
In this Article
Understanding Data
To Judge the Reliability of Community Insight and analysis reports, it’s vital to understand the difference between the types of data they’re based on.
Data is a valuable resource for public service providers who want to understand the communities they serve and provide the most effective communication and support to meet their needs. For Fire and Rescue Services (FRS), analysis of information about residents, the local area, types of incidents and causes can help make protection and prevention services even more effective.
But not all data is equal. How do you know whether it is up-to-date and accurate? Does it cover every household and area? What is missing? It could make a big difference to the effectiveness of decision-making and service provision if the information you’re relying on is old, doesn’t include everything you need or is not detailed and specific enough.
In this blog we explain what different types of data are, so you know how and when to use and trust them. Understanding of the pros and cons of each type of data will give you a strong foundation for building a blended data approach that allows for a greater level of insight than ever before.
Open Data
This data is official and since it’s on the Open Government Licence, free. There are limitations: sources are rarely measured at low-level geographies, and they can be several years out of date. It’s several years since the last census: it’s almost certain that new homes been built and parts of the community have changed in that time.
Open data sources, such as the Office for National Statistics (ONS) and the Home Office, are ideal for building a top-level picture of your communities. But it doesn’t provide a detailed and complete view. At best, the data is usually presented at Output Area level (around 100 households.) This means at-risk residents can be hidden – not ideal when you’re trying to target limited resources towards those who need it most.
Open data is an important starting point. But it’s seldom fit for purpose in its raw form. It needs to be blended with other, complementary data sources.
Administrative Data
This is the data you collect internally. Its value lies in its uniqueness to your FRS. Everything you collect, from Home Safety Visit data to fire incident information, is specific to your community, which means it’s highly relevant and frequently updated.
There are some limitations. Not every resident within the community interacts with your service, so there are many people and households you have no data for. People at future risk may be excluded.
Sharing administrative data between departments and colleagues is often subject to strict governance regulations which can make it harder to use. Your compliance or legal team will need to check that data is being used in a way that’s compatible with the purposes it was collected for.
Your own administrative data provides a detailed snapshot of part of your community. In conjunction with open data, segmentation and other commercial sources, it has the potential to provide a deeper level of insight.
Commercial Data
Commercial datasets draw from a variety of frequently updated sources to paint a picture of your community today. Commercial data allows for easy segmentation at a household and postcode level, for a detailed level of information. You get a deeper understanding of lifestyle and demographic characteristics right across your community.
Information from a commercial dataset provides scale and granularity. It can offer insight that open and administrative data lacks, revealing factors such as online activity, engagement, channel preferences, behavioural and lifestyle characteristics.
You have to pay for commercial datasets. So you’ll want to be sure you’re getting value for money. Check that the data is up-to-date, regularly refreshed and doesn’t exclude any part of your community. Find out how detailed the coverage is: do you get information by postcode or household?
Health and Wellbeing Data
For FRS, it’s valuable to know about the health and wellbeing status of community members, in order to prioritise the most vulnerable and at-risk residents for home safety visits.
Wellbeing segmentation is a commercial dataset that’s unique to CACI. It gives insight into potential factors which may lead to an increase in certain residents being more at risk or vulnerable. This means your FRS can effectively allocate resources for community outreach and service provision.
The CACI health and wellbeing dataset helps you identify residents who are elderly, socially isolated or have health dependencies at household level.
Postcode and Household Data
Postcode segmentation reflects the mix of people within a postcode and so focuses on describing the very local neighbourhood. For a FRS, postcode segmentation can identify the types and frequency of fires that happen in a given area, helping to inform general preventative initiatives.
Household segmentation places more emphasis on individual household attributes such as tenure, family structure and lifestage. This level of segmentation helps your FRS identify individual, at-risk people in otherwise safe postcodes. It’s this specific analysis that gives you visibility of all residents and helps you engage with them in effective ways tailored to their needs and capabilities.
If you’d like to find out more about blending different types of data to achieve the focused level of insight that your FRS needs for prevention, engagement and protection, click here to talk to CACI’s FRS data team.
