It’s strange how the world is abuzz with ecommerce, yet it only represented 13% of retail sales in 2017 in the United States (Internet Retailer). This shows there is still demand for physical presence in the retail space – shown clearly by brands such as Warby Parker and Rent the Runway, both having debuted as online-only brands only to add physical stores to their business plans later. With all the convenience that ecommerce brings to the consumer, physical retail still holds the ultimate opportunity for immediate gratification and that touch-and-feel opportunity. It can be argued that the brands surviving the “Retail Armageddon” are integrating their physical presence with digital. And those brands doing it best are finding their niche of the expansive customer experience, a draw known as retailtainment.
Retail is one of the industries most affected by the influx of technology, changing consumer behaviors, and enhanced customer expectations. Looking toward retail’s future, we compiled some key steps to staying on top of changing trends in the industry.
Acquiring a new member to your loyalty program is a great sign of growth; it’s a sign your member base is getting larger and therefore your revenue and margins are growing. That’s the usual perception and the reason why many marketers spend a disproportionate amount of their budgets on various forms of Above the Line (ATL) communication to attract new members. In reality and in most cases, this is the wrong approach. Yes, creating awareness of your brand and loyalty program is absolutely necessary and this is clearly required to attract new members. However, don’t think that your job is done once the new member picks up their loyalty card and walks through your door for the first time.
Since the turn of the century, the age of information has seen masses of data dumped into disconnected silos across many retail organizations. Limited access, capability, focus and free time has meant that until very recently we were only able to skim stones across the surface of this pool of potentially rich insight. However, where once IT systems creaked to breaking point whenever a non-batch data request was made, the digital transformation of customer data management is now enabling the development of inter-connected information ecosystems and finally rich customer insight. With loyalty programs in which customers self-identify, retailers can connect disparate pieces of data across multiple silos and touchpoints to build a complete picture of their customers – what we call the Golden Profile. With this Profile, retailers create relevant messaging to reach their consumers in a meaningful, impactful way.
When a business realizes the extent to which they can engage and grow their customers through a strong loyalty initiative, it’s tempting for them to consider building the program in-house. Often, it’s the desire to completely customize their program and have total control over this martech that leads them to believe it will be better to build their own platform. However, these companies may not know the extent of ongoing costs to running their own technology, not to mention the opportunity costs of time, talent, and the expertise they would have access to with a global provider, to continually evolve their program to reflect their growing customer needs.
Take a moment to think about your most fulfilling relationship. Now, think about the qualities that make that relationship successful. I’m willing to bet that one of the qualities that makes that relationship so successful is each person’s willingness to listen. In this relationship-era where brands are looking to build authentic and long-lasting connections with consumers, it is imperative that they first… listen.
People think of personalization in many ways. Some, very simplistically: a first name on an email. Others, view it as much more: providing personalized experiences based on a holistic view of the customer. As companies continue to gather more data across more touchpoints, customers’ expectations are rising. They expect relevant, real-time, right-time, individualized communications. In order to deliver on these expectations, companies must begin by thinking strategically about their organizational structure as it relates to loyalty.
When it comes right down to it, a loyalty program is an agreement between a brand and their customer. When a customer signs on for a rewards program, they know they’re giving up something invaluable – their information, habits, and behaviors – in exchange for certain treatment from that brand.
Airlines have long been leaders and experts at cultivating dynamic, trend-setting loyalty programs. Their treasure trove of information allows marketers to engage with travelers in a meaningful way.
What airlines get right about loyalty is creating an experience for members that’s different from non-members – priority boarding, private lounges and free flights make customers feel valued. However, airlines can learn from other industries that rewarding for interactions beyond miles through social engagement, mobile, and surveys allows brands to gather more data to create truly personalized offers and communications.