I just read a really interesting article from The Retail Experience newsletter that covered the controversial and elusive concept of Value-Pricing. Many folks think about retail value-based pricing as charging different prices to different customers based on their perceived value of the same product. It’s great in theory but difficult in practice. Furthermore, issues around consumer privacy and misleading advertising could prevent value-based retail pricing from being put into practice. On the other hand, online retailers are adjusting prices all the time based on fluctuating inventories, time of day and how much the competition is charging. The big question is do you pay higher prices on Amazon than the next customer. If you found out, you might love Amazon a little less… Check out the entire article here.
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.
I’ve been very interested in the different types of devices consumers use to shop, browse, and engage with retailers. Ironically, some data shows mobile apps are preferred by consumers for better user experience that only an app can provide. However, other data show that users prefer mobile websites. I’m confused at the comparison. One comparison is on volume of visits/usage. The other is quality of user experience. The volume is on the mobile web it seems, but the user experience is better on apps. Why do consumers purchase more on mobile websites than on retailer mobile apps if the experience on apps is so much better? I’m not sure, but it doesn’t seem there is an explanation. Check out part of the debate that Mediapost covered.
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.
The CEO of Ahold, a major international grocery store retailers, had a very informative interview with McKinsey. Dick Boer, CEO of Ahold, talks about how grocery retail needs to evolve with the current needs of shoppers. Ahold is an international portfolio of grocery retail banners that have a very local community presence. Operating such a retail model is challenging, especially when more and more packaged goods can be purchased by consumers online and elsewhere. The interesting strategic focus is on fresh foods, leveraging the grocer’s key strength with perishable goods. It’s hard to get right but represents clear opportunity for grocers. Check out the full interview for more details.
This is totally off topic to the typical retail and CPG industry commentary. I read an article on LinkedIn that I thought was awesome for start-ups and large companies alike. The sage advice can help corporate employees run and participate in meetings more effectively. Check it out if you want some out-of-the-box suggestions for maximizing meeting time and minimizing wasted time.
Retail has been changing for a while. Once upon a time, retailers specialized in certain types of merchandise with little cross-over between retailers. Unfortunately, assortment uniqueness is a thing of the past. Amazon has over 1 million products for sale online. No brick & mortar retailer can compete with that. With price and assortment advantages conceded to Amazon.com, other retailers need to compete on other levels. Check out this article for some interesting guidance for retailers who want to evolve in today’s competitive retailer environment.
A great article from Retail Customer Experience on where retailers are most likely to succeed first in the fight for the omni-channel customer experience. It seems like retailers are great at figuring out product, price and inventory. However, this has been optimized by channel, not across channels. Customers are more and more thinking across channels and devices (buying where/when/how they want), but retailers are ill-equipped to engage this type of customer until they figure out how to integrate their core systems to deliver a seamless customer experience regardless of device, in-store or online. Tons of investment needs to be made in both technology, organization restructurings and marketing efforts to deliver a customer-centric experience.
In an article on Digital Transactions, there was a very good piece focused on the reality (and not hype) of the state of virtual gift cards in the prepaid industry. Check it out here. My take is that virtual gift cards is an innovative concept for an old-school industry dominated by plastic cards. What started with paper vouchers (aka e-gift cards), these virtual cards are becoming increasingly mobile. After all, how un-sexy is a printed gift card, with botched printer inks, torn or crumpled paper. The experience for the consumer sending the gift is great, but not so great for those receiving this type of gift. I’d rather receive a nice shiny plastic gift card than an email that says, please print the gift card on your home printer and make sure you have enough paper and ink. I’m exaggerating to make a point but you get the idea. The main focus of this article is that e-commerce retailers like Amazon have been doing virtual gift cards for a while and typically don’t have issues with consumer redemption because there is a unique code that consumers redeem online by copying and pasting it into their check-out page online. For those retailers with an in-store component, it’s a different story. The redemption experience can be a nightmare for a consumer who has printed and crumpled a virtual gift card. Don’t forget the retailer experience. Redeeming a gift card in-store requires a human being on the store side to do something different (instead of swiping a traditional gift card). Store associates haven’t seen enough of these to know what to do and how to deal with issues around scanning bar codes or manually inputting long strings of gift card numbers. Very messy, and often leaves the consumer with a desire for a different type of gift…
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…