planning for a new reality · 6/24/2020 · the new personas rising risk takers covid skeptics,...

Leveraging Data & Insights to Inform your COVID-19 Rebound StrategyPlanning for a New Reality

3 • Merkle Inc

Today’s Presenters

Eugene Becker

EVP, Data Solutions

Shirli Zelcer

Chief Operating Officer Analytics

We help the best brands in the world createcompetitive advantage through people-based customer experiences.

We believe in marketing to people, not proxies.

We believe the future of customer experience is personal, informed by data, powered by technology,

and delivered through creativity.

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RECENT POLL

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People do not agree on what to do

27%

38%

34%

Attitude On Recent Push To “Reopen The Economy”Let’s reopen the economy already!Let’s start to reopen, but take a cautious and slow approachI feel that we should continue to follow stay-at-home orders

Source: COVID-19 Tracker, part of the Taking the Pulse series by Dentsu Aegis Network. Online survey panels, conducted April 24, 2020

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Individual states are taking a very different approach

https://www.wbur.org/npr/815200313/what-governors-are-doing-to-tackle-spreading-coronavirus

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At least the experts agree… Not.

https://www.bcg.com/publications/2020/covid-investor-pulse-survey/overview.aspx

9 • Merkle IncSource: Ipsos: Affluent Consumers During COVID-19

Customers are still paying attention

10 • Merkle IncSource: Ipsos: Affluent Consumers During COVID-19

And affluent customers are planning to increase buying activity

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Many inputs exist to inform strategy… Mobility Levels

Financial Impacts

State Reopening Phases

Source: JD Power, Axios.com, Foursquare, Washington Post, Bizjournal.com, Dentsu Aegis Network

Competitor Actions

Infection Rates

Consumer Sentiment

© 2020 Merkle. All Rights Reserved. Confidential

It’s Complicated …

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Marketers Need to Manage Change Along Two Dimensions

MARKETCONSUMER


A Simplified Framework …

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Infections Mobility

Consumer Economics

Consumer Spending

Long Term Habit Formation

Dynamic Change

Stabilization


There’s Data Out There to Track This!

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Infections Mobility

Consumer Economics

Consumer Spending


The Bad News: Current Data Can’t Keep Up with C19

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Income $100-125k Income Down 50% YoY

Credit Card Spend $3k Credit Card Spend Increased 3 Consecutive Months

Business Traveler First Visit to an Airport

FROM TO


Identified Data Sources that Rise to the Challenge

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Transaction-level view into 40% of US checkings and savings accounts

Over 100 daily location observations on 37MM UUs

Transaction-level view into 90% US credit card spend

Visibility into pay check payments for 40% of the US


A Data Taxonomy Focused on the Essential Dynamics

Financials

• Income• Deposit Account Inflows• Liquid assets• Revolving balances

Credit Card Spend

• Total spend• E-commerce share• Spend by category• Spend w/ competitors

Social Distancing

• Shelter in place• Reemerging• Back to normal• Point of interest visits


The New Personas

Rising Risk Takers

COVID skeptics, reentered the social scene & resumed consumption early

Rich & Resilient

Affluent singles with little financial impact eager to resume their lifestyle

Work-From-Home Warrior

Juggling a high-pressure career, kids and the household

E-commerce Exploiters

Don’t leave the house and rely on ecommerce and delivery

Distressed & Defensive

Drop in income followed by cut back in spend on all but essential purchases

Road to Recovery

Some impact to income but no signs of stress in spending pattern

Pragmatic Pessimists

Steady income but shift from spending to savings based on negative outlook


Marketers Need to Manage Change Along Two Dimensions

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MARKETCONSUMER

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Predictive Models and Segmentation are at Risk

Population Stability – Underlying populations on which models were built may have shifted significantly over the last several months

Financial/Demographic Data Shifts – There may be significant change in an individual HH income/net worth due to COVID, the information might not be reflected quickly as needed

Transaction/Behavior Related Variables – Variables which are typically included in models, such as number of transactions in the last 6 months or total revenue in the last 3 months, are going to be very unstable and may throw off models depending on their level of contribution

Due to significant change in customer purchase behavior, predictive models and segmentations that use recent demographics and/or consumer behavior for predicting response, engagement, purchase

etc. might no longer be accurate.

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Predictive Models and Segmentation are at RiskPredictive models might not be effective due to significant change in sales or customer behavior

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Partnering during unprecedented times

The impact of COVID-19 has reverberated across the country and globe leaving many trying to grapple with understanding the current impact and what the “new normal” could be.• Merkle Analytics in partnership with Merkury set out to uncover

answers to the overall health of the country

• Utilizing an Economic Resilience Index* as well as a variety of rich Data Source Variables, Google Mobility and key Categories of Spend data overlaid with the current COVID-19 cases a collection of dashboards were developed to drive foundational insight into the impact of the crisis in the US

• The following slides give a brief introduction to the power of data to bring light in the midst of uncertainty

*The Economic Resilience Index (ERI), developed by Merkle, is liquid assets per capita against the % of cases of COVID-19 per county

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How are communities with the greatest discretionary spend being impacted with COVID-19?Discretionary spend is historically richest along the coasts and the major metro areas, but those were also amongst the greatest hit with the pandemic

A limited view of the country’s discretionary spend would point to those hit hardest with the virus are those with the highest level of discretionary spend - pointing to concern over the overall speed of recovery

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Leveraging the data to uncover where communities who have a mid to high average discretionary spend ($10K-$15K+ annually) and had little to no impact from the virus begins to uncover a pattern of where anticipated economic recovery might be an opportunity for unique opportunities in the near term

What communities are most likely to be ready to spend first?

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By understanding how financially solvent a county is in relationship to the overall case rate of COVID-19, an understanding of where communities have a high likelihood of a faster economic recovery can be assessed• At a macro level, COVID-19 has caused the greatest

risk for a slow recovery in the upper North East, and across the Southern Gulf States

• However, the macro view does not tell the whole COVID-19 story – that is a local story …

How Resilient is the Economy?

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• Although economies will be re-opening at a state level, understanding the unique customer mindset at a more granular level will help to guide an effective and empathetic marketing strategy at a community level

• Identifying key locations will allow the brand to begin to strategize:

• Where customers are most likely to return to locations – to help guide staffing

• Where potential location plans (e.g. inventory, financial, etc.) need to be adjusted based anticipated return

• Where potential offers can be targeted to drive customers to locations that may be slow to recover

The impact of COVID-19 is felt at a community level…how will customers re-engage in local commerce

The Economic Resilience Index (ERI) is max liquidity of assets per capita against the % of cases of COVID-19 per county

• Green indicates counties with the greatest likelihood to recovery quickly and the Red indicates counties that will likely be slow to recover

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• By correlating brand data – customer spend, store location, etc. – with the economic and physical health of a community will help to guide how quickly a community is likely to recover economically

• Among the wealthiest counties in the US, Westchester County, NY has been one of the hardest hit with the virus and will likely be slow to recover, however continued improvement in the case rate points to optimism for the economic resiliency of the community

• Fairfax County, VA has similar Liquid Assets per Capita to Westchester. The community had a slow initial confirmation rate of COVID-19, but has experienced exponential increases in case rate pointing to a likely protracted economic recovery

Wealth alone is not an indicator of resilience …

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Mobility and ERI• By combining ERI and Google’s

mobility data, trends of reengagement in normal commerce and activities begin to emerge.

• The trend of ERI flat to improving directionally aligns with an uptick in traffic to parks, retail/recreation areas and transit stations

• The relatively flat day to day mobility trend of groceries/pharmacies is also consistent with the normalization of the ERI and the flattened COVID-19 rate

• Jointly utilizing these measures will help to target where marketing activities can begin or increase. Conversely, the data points to communities and regions where the customer mindset may not be ready for a return to pre-COVID-19 spending and activity

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How is spending changing?

• The introduction of spend data at a local level helps to understand how and where consumers are shifting their spending in the midst of the pandemic

• Focusing on four key strategic categories (Airlines, Department Stores, Food Stores, Restaurant & Bars) gives insight into the spending behavior changes and may highlight key markets that are trending up (ready to engage in increased discretionary spend activity) or those communities slower to return to pre-COVID-19 spending patterns

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• Understanding the spend at a local level emphasizes the trend and shift in spend behavior in the pre to post COVID-19 time period gives an understanding of how consumers are changing their buying behaviors overtime and the pace of overall recovery

• For example, Department stores are trending just under 50% of their pre-COVID spending rate in Fairfax County, VA while Food Stores weekly sales are up nearly 17% over their pre-COVID period pointing to a slow rate of recovery in this county with an ERI of 6.5 during the aligned week (5/24)

Spend at a Local Level

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Dashboard Solution + 1st Party Data

Customizing the Geographic dashboards with an overlay of 1st Party data gives a brand-market based perspective on what areas are the most critical to rebound, the most significant opportunity and where the greatest risk might exist to strategically drive action moving into recovery

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• What locations should be reopened? What operating hours may make sense? Where might appropriate in-location events have potential?

• What strategic change can be made to the inventory to reflect the potential price pressures?

• What areas may exhibit the greatest staffing challenges?

• Where will curbside pickup likely continue to be the customer’s preference?

• Where can we get the biggest return on our marketing dollar investment? Should I resume direct mail/paid media in certain areas? Where should I resume mass media advertising?

• Where might targeted discounts, offer personalization, or custom messaging make sense?

• Where would our community contributions have the greatest impact?

Questions the dashboards can help you answer…

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Questions?

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Questions?

planning for a new reality · 6/24/2020 · the new personas rising risk takers covid skeptics,...

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