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Powering Lifetime Connections – The Retail Ecosystem

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By: Wise Marketer Staff |

Posted on August 28, 2018

Pathways to creating meaningful brand relationships

By Tad Fordyce, Epsilon

The retail landscape is complex. Brick-and-mortar is still thriving, and within its walls, consumers want a version of reward program “surprise and delight” that e-commerce and m-commerce platforms achieve with technology.

For instance, luxury retailer Rebecca Minkoff put RFID-reading mirrors in its fitting rooms. Radio-frequency identification tags on all apparel interact with fitting room mirrors. As the shopper tries on her selected items, the mirror can display them in alternate colors and sizes. The tricked-out dressing rooms also can modify the lighting so the consumer can see how the clothing will look in the daytime vs. the evening.

But while the majority of shoppers make their purchases in store, the brands they buy cannot refute the role digital channels play in helping them meet the needs and wants of their customers. As a result, they explore, evaluate, test and select solutions that advance their most important efforts — those that answer customer expectations today, anticipate their desires tomorrow and grow with their aspirations.

E-commerce sales in the first quarter of 2018 accounted for only 9.5% of total sales — a decrease of 19.9% from Q4 2017 e-commerce sales. - U.S. Census Bureau

However, smartphones are used in more than ⅓ of total retail sales — if not for the purchase itself then research or price comparison. - 2018 Retail Best Practices: Mobile Web, Forrester


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Case study: Walgreens

Walgreens leverages Epsilon’s platform technology to support their sophisticated loyalty program, Balance® Rewards. The platform routes data for each member in an omnchannel environment from multiple sources including online and in-store enrollments, online purchases and activity uploads from devices like FitBit. And, the integrated web services support real-time enrollment through multiple channels. Today, Walgreens’ Balance® Rewards program has over 150 million people enrolled and the Epsilon platform supports 4M+ purchase transactions per day and 4B+ loyalty requests per day.Enter your content here.[/dropshadowbox]


No two customers are the same

To achieve success, marketers must thoroughly understand the fragmented marketplace of the retail ecosystem. Not only do they seek to straddle multiple sales channels, they need to know the role of each ecosystem component — point-of-sale payment options, marketing communications, third-party product reviews and social sharing so they can develop an understanding of each and every customer as no two are the same. This omniscience can power consumer connections and sustain true loyalty for a lifetime.

Lasting loyalty means more than frequent purchase activity and incremental spend. It may start with transactional loyalty nurtured among customers and prospects that fit a profile. But it expands to include data-driven communications, personalized offers and positive, memorable experiences that give spark to a brand and fan its flames so that consumer affinity becomes a sincere commitment, even emotional attachment.


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Luxury goods aficionados want more than prestigious product.

According to consulting group Deloitte, 45% of consumers want more personalized products and services from a luxury retail experience. “The essence of luxury is changing from an emphasis on the physical to a focus on the experiential and how luxury makes you feel,” Deloitte researchers concluded.Enter your content here.[/dropshadowbox]


Here, we introduce the fundamental components of the retail ecosystem centered around loyalty, the nucleus.

Identify best customers and ideal prospects

Identity is a challenge. However, customer data collection has exploded. To best wrangle it for improved marketing, disparate systems and data sources need to be aggregated, cleaned, and standardized in a privacy-compliant way. When data appears in a single format, the clues and cues to customer behavior become clear. Data analysis can uncover the next best product to offer, customer likelihood to respond in-store vs. through a digital channel and preferred communication format.

Especially in an era of same-day delivery, rare distribution exclusives and real-time price comparisons as close as a consumer’s fingertip, customers’ wants and needs are forever changing. Therefore, a careful and constant eye on data to track the latest trends is essential.

In fact, data should drive decisions about the when, why and how of productive customer interactions. In turn, data use increases competitive advantage, setting the savviest statisticians up to attract profitable customers at their moment of purchase.


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80% of consumers are more likely to do business with a company that personalizes experiences.

A decision engine that draws upon an omnichannel understanding of customers’ interactions helps a retailer reward customer behavior in the moment with a relevant offer or message. Epsilon Agility Loyalty captures customer actions and behaviors, and uses Momentum’s formulas and business rules to predict the most effective outcome. The consumer experience balances the brand’s business interest with customer benefits in real time.



Proper identification drives profit and cost-effectiveness

Through identification of best customers and concerted pursuit of prospects who “look” like them, brands can optimize their marketing spend, focusing on the customers and channels that make up the bulk of their business or most lucrative segments.


The combination of personally identifiable information (PII) that can be used to distinguish one person from another and non PII data enables customized incentives and messaging that more fully imagine the customer relationship across its lifetime.

Non PII data can originate from the retail brand, a business partner or a third-party data source. Non PII data is anonymous (device type, language preference, time zone, etc.) and includes data that’s collected by servers and browsers with the use of cookies. Marketers are able to track and understand the digital behavior of their customers and it helps build a rich picture of consumer behavior patterns that explain how retailers have achieved current customer loyalty. When leveraged for emerging loyal customers and ideal prospects, it can create new lasting, powerful and profitable customer relationships.

By bringing together PII and non PII data to understand the loyalist in all channels, marketers gain insight with which to engage consumers for a lifetime. Together, this data helps to create experiences relevant to consumer wants and needs on a niche or even individual level. For instance, some retail customers prefer convenience while others want a compelling, “hip” experience. Through data analysis, retailers know how to deploy loyalty-creating engagement tactics to each individual.



Make it relevant

In at-home entertainment, online shopping, job hunting and myriad other experiences, consumers receive personalized suggestions. As a result, they expect offers that reflect their needs and service that shows an understanding and interest in their lifestyles. Research by Epsilon learned that 90% of consumers find personalized experiences appealing, and consumers who call personalization very appealing are 10 times more likely than others to generate the highest number of transactions and the greatest value for a brand.

In other words, consumers crave relevant engagement. In the retail context, they want human recognition and a personal experience. Clienteling — a technique sales associates use to establish and encourage long-term relationships with key customers both in person and between retail visits — is based on data about customer preferences, behaviors and purchases. This special treatment may come as a result of employee training, technology enablement — a Brooks Brothers shopper receiving an offer for free tailoring when his loyalty card is scanned at the point of sale — or both.

So, rewards for purchases alone do not keep customers loyal. A loyalty program construct must recognize customers for other types of engagement: visits to the brand website, email opens, “likes” on the brand’s social media pages. Data is essential and must be synchronized with all other interactions at customer touchpoints.


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Top types of personalization According to research from Epsilon

About two-thirds of consumers have noticed personalization in their interactions with brands. And the majority believe that companies are getting better at delivering these experiences through: Customization - 32% Service - 32% Discounts/offers - 16%



Technology plays an important role

Customer attitudes and preferences change over time.  Sophisticated data analytics enable brands to recognize consumers by their stages within the customer lifecycle. Predictive models identify customer life stages by past transactions and forecast their current and future needs based on the purchase patterns of others. The ability to predict life events helps to stem attrition, activate appropriate nurture tactics, trigger sales or interaction incentives, and cement long-term loyalty.

So as a marketer, think about how this ‘retail ecosystem’ aligns with your business model. Leverage technology and data so you can be there with your customers and future customers – at the right place and at the right time – both online and offline, and create emotional connections which will lead to lifetime loyalty.

Tad Fordyce is SVP of Loyalty at Epsilon.