Three key trends for retail and loyalty marketing
There were three key trends in retail and loyalty marketing that stood out throughout the three days of the recent Customer Relationship Management Conference in the US, revolving around the future use of customer data, brand 'boldness', and the role of bricks-and-mortar in developing retail customer relationships, according to The Wise Marketer's US reporter, Parissa Behnia of Hanifin Loyalty.
The first of the three dominant trends was that marketers increasingly believe that collecting and using customer data no longer simply for marketing purposes, with a broader emphasis being placed on providing insights and decision-making support for the structure and strategy of the whole business. The second trend noted was that retailers are feeling the need to become bolder and make their brand promises more real to customers by providing customer experiences that truly excel and differentiate. The third trend identified was that bricks-and-mortar retail outlets are far from defunct because the offline and online worlds are colliding as consumers seek ever-greater value and convenience.
- Fulfil the promise of customer data In his presentation, Charles Chapek, vice president of CRM for Ann Inc. explained that, not too long ago, CRM practitioners wished for certain types of data that seemed woefully out of reach. Now we have an overflow of millions of data points, and while no one is complaining about this more complete view of our customers, what they are doing and what they are saying, we're having trouble managing and classifying all of it.
In this 360 degree world, retailers have to find a way to mesh traditional POS and call centre data with mobile, social, mobile POS and other emerging data sources and have all of that live in a neat and tidy database. And, oh yeah, they have to make sure to provide exquisite care for customers because they expect us to know what they are doing and saying at all times in real time.
It is easy to lose sight of the big long term picture of the customer if we treat him/her episodically as opposed to building a longer term and more robust relationship. The point isn't campaign ROI. The point is an evolution toward lifetime value. This global lifetime value is significant because it is more than the sum of campaign ROI parts. This new access to '360 degree' data affects store layout and location, merchandise selection, hours, access, communication channels and many other aspects of running a retail business.
Collecting and using that data are not just for marketing purposes anymore. Their function informs the structure and strategy of the overall business. As soon as we get to the point where we can fully appreciate and understand the strategic implications of this new 'data world order', the more successful we will be in serving our customers.
- The bolder brand Shaun Smith, a partner at Smith & Co., spent an energizing morning talking about what defines a bold organisation and how its boldness manifests itself in how it relates to customers, prospects and employees alike.
Bold firms share three key characteristics:
- Stand Up These brands know what it is they believe in. For example, the Six Senses resort in Maldives is a prime example of an organisation that stands up. In this case, it's protecting the environment as much as possible. Their main value is concern: for the environment and for an exquisite customer experience. Every part of this resort reinforces the value. When guests arrive by seaplane, they are given a bag for their shoes in keeping with the "no news and no shoes" policy. There is no television or any sort of outside access because the purpose of this resort is luxurious relaxation. In respecting the environment, they are vigorously devoted to a recycling and reuse programme. 50% of profits they've made from their own purified water go directly to parts of the world where there is no access to fresh water. All of this reinforces the brand message of "intelligent luxury".
- Stand Out These brands are remarkable and different. For example, Burberry has mastered the art of democratic luxury and, unlike many luxury brands, has seen tremendous profits of late. The company invested heavily in mapping the customer journey such that they identified and understood all angles of opportunity when a customer evaluates Burberry product. Burberry stands out because it engages in infectious communication. They create "wow" in as many ways as possible in their customer experience. Their ArtOfTheTrench.com web site claims some 400,000 loyal customers who uploaded pictures of themselves onto the site. Also, they brought the masses to the runway by having 3D fashion show screening events, showing these same fashion shows real time on the internet and added the ability to order Burberry product from an iPad app.
- Stand Firm These brands build communities for employees and customers to create sustainability around their brand. Zappos is a perfect example of a company that "stands firm" in that they walk their talk. Though it appears that they sell bags, clothes, shoes, and so on, what they actually sell is service and what they deliver is happiness. They are committed to their culture and they very much believe in the power of company culture not only with how they interact with their customers but also how they engage with each other inside the company. By standing firm, Zappos creates rites and customs that are guideposts for its values. These rites and rituals ranging from real time engagement with customers on social platforms to quirky office meetings and recognition activities within headquarters.
- There's hope for bricks-and-mortar retailers Sarah Lacy, senior editor for TechCrunch! said that we are witnessing the revenge of the brick and mortar stores. Even though e-commerce represents only 10% of retail sales, it happens to be a very disruptive 10%. Many retail models have been turned on their heads because of this new way of shopping, selecting and purchasing products. But now there is an opportunity for traditional retailers to leverage the best of both worlds.
At the moment, the offline and online worlds are colliding as customers transact online or on their Smartphones while also using real world experiences thanks to connections with others on platforms such as Yelp, Groupon, Foursquare, Twitter and Shopkick. Lacy recommended four strategies to improve bricks-and-mortar retailers' chances in today's developed market:
- Play up your niche - It's difficult to buy maternity clothes or food online. Celebrate that natural advantage over online but you can use online to enhance the experience.
- Pilots are your friend - There is nothing wrong with "test and learn".
- Pick the channel - If something is best done online, then put it online. Make sure to have several high touch points in the customer journey to provide or reinforce what online can't.
- Service - Nordstrom is an excellent model of service in this social commerce world. Aspire to that level of service and people will always come back to you.