In one of the better recent articles focused on OMNI-channel retail strategy, this article from HBR really hit home for me. It outlines a research-driven process for testing several hypotheses about merits of OMNI-channel. In short, getting shoppers to buy online had a negative effect on retail profitability. However, getting online shopper to buy in-store gave a major boost to profitability. Perhaps the article is biased toward brick and mortar, but not blindly so. There are some good insights into what criteria make for more profitable channel shoppers, including a shopper’s proximity to the store. The conclusion I drew from this was that if retailers can win shoppers in any channel, go for it. But if they can get online shoppers to go in-store, they will boost margins and sales. That’s why ship-to-store is the best OMNI-channel strategy to capture this online to offline customer behavior.
Archive for Loyalty
In a recent article by AdAge, a variety of companies shared their approach and desire to use purchase-based data to enhance targeting of digital ads, specifically by CPG brands. Epsilon, Acxiom, Datalogix among others are referenced. Lots of talk around high-level trends, but not as much discussion around what specific data is being used, where it comes from and how marketers are using it. Devils always in the details.
It seems people love to hate JCpenney these days, blaming the lack of recovery in performance on “the prior strategy” of Ron Johnson, who tried to transform the company by eliminating coupons, deals and discounts and good with an everyday low price. The logic was sound. Except I’m guessing nearly impossible to pull a 180 in a company’s merchandising strategy from hi-Lo (promotional) to EDLP (everyday low price). Retraining the entire generation of customers was a near impossible feat.
The approach to building customer loyalty should be pretty simple. Many local merchants build loyalty with customers without fancy loyalty card, points programs or CRM systems. However, most large retailers spend so much time and money on loyalty schemes to attract and retain shoppers, and the programs aren’t wildly successful. In a recent post on Retail Customer Experience here, the author talks about how customer loyalty needs to start with the retailer demonstrating loyalty to the customer first before expecting the same from the customer. This is quite accurate. Think about all the times you’ve been in a retailer and can’t find a knowledgeable sales person, or you have difficulty returning merchandise. These are simple things from a customer perspective, but difficult aspects of retailing to get right. If all retailers abandoned loyalty programs and plowed the money and time into staff training and customer service, they’d have more customer loyalty than they could imagine.
In a recent study by Progressive Grocer, Target.com ranked highest among grocery retailers as the most trafficked website for retailer coupons. The playing field was remarkably skewed in Target’s favor, given the scale of Target’s ecommerce and digital marketing efforts. Comparing Target web traffic to even the largest grocers, like Safeway and Kroger, isn’t fair, since grocery retailers are notorious for low web traffic (mostly because they don’t sell online – one of the more compelling reasons to go to a retailer’s website). Regardless of comps, Target does offer consumers a remarkable set of options to save money with coupons. Check out the accolades and stats here.
There are so many articles written on how to build retail customer loyalty. Furthermore, there are millions of dollars spent on generating and nurturing customer loyalty among retailers and service providers. I recently read this article on Retail Customer Experience that talks about 10-steps to customer loyalty. I love articles with 10-steps to success. Super simple and clear. Just follow the sage advice and watch the magic happen. Unfortunately, many retailers want to throw money at a problem without contemplating a much simpler solution. Equally as costly, retailers need to put the customer first and focus on demonstrating loyalty to the customer (easy returns, easy purchasing, great customer service and sales support) before hoping for loyalty in return. There was another article focused on the nuances around how a retailer can “be loyal” to customers first. I can’t object to this simple yet hard-to-execute approach. All the coupons and loyalty cards in the world can’t mitigate my frustration when sales people are unhelpful and customer service people are rude…