Creating loyalty programs that work

Retail marketing includes efforts to draw in new shoppers and hold on to existing patrons. Loyalty programs can be a component of this strategy and retail customer intelligence can enable merchants to tailor these initiatives to their consumers' preferences.

According to a McKinsey & Company study, as reported by Forbes, retailers could do more to make their programs worth the investment. The study found that heavy investors in loyalty programs grew at the same rate or more slowly than other companies since 2002. With the right strategy, however, merchants can turn their loyalty programs into assets that engage customers and drive sales.

McKinsey & Company recommended incorporating loyalty programs into the shopping experience, instead of running them almost as afterthoughts at the cash register. Similarly, Business 2 Community advised retailers to make sure their loyalty programs cut across all store operations, creating a seamless omnichannel experience. Merchants can tie in their online branding by taking social engagement into consideration, the source added.

Creative approaches to loyalty integration, such as adding a mobile payment component, can also foster loyal customers without putting too much emphasis on the program, McKinsey & Company said. Overall, retail reports and data analytics can help merchants design stronger loyalty programs that offer the right incentives for their consumer base.

Retail technology should empower employees

Merchants are implementing innovative retail technology, such as mobile point of sale systems, to improve their marketing strategies and enhance the customer experience. Both online and in stores, technological solutions can help retailers offer personalized services, provide consumers with information and make shopping a more efficient process.

An important component of successfully integrating retail systems is employee training. In a recent Wall Street Journal blog post, Michael Hickens described a shopping trip during which poorly implemented technology detracted from his experience. The store associate used a tablet POS system to take Hickens' information and complete the sale. While Hickens noted some opportunities the tablet could have provided – such as personalized suggestions for items that would go well with his purchase – the employee struggled with the basics on the tablet, taking time and causing frustration.

"I think it's important particularly when you're talking about higher-end, commission-driven environment, that sales associates don't become a point of resistance in adopting the technology," Steven Dennis, president of SageBerry Consulting LLC, told Luxury Daily. "When it's obvious it saves them time, closes more sales, efficiently solidifies relationships with clients and it happens to save money for company, then it's a win-win."

Simple, integrated POS solutions can help create a smoother transition, and retailers should make sure their employees are prepared to use the new resources.

Customers value time-saving retail technology

Retail customer trends reveal that consumers still choose brick-and-mortar store locations for a significant portion of their shopping. Even if they do their research online first, many patrons want the in-store experience, especially for specific items like apparel and home goods. Customers greatly appreciate the convenience of online shopping, so merchants are finding ways to provide time-saving options in their stores to meet consumers' expectations.

According to Advertising Age, a key strategy for retailers is to ensure their store operations match the convenience and information resources of online channels. Shoppers value time-saving technology that can help them make informed decisions faster and complete their transactions with minimal inconvenience. Here are a few examples of retail technology that merchants can use to give customers an efficient store experience:

  • Virtual try-on: Advertising Age mentioned that some stores are offering apps that show customers how they would look in new clothes, drawing on fashion advice from style bloggers. Other stores have body scanners or virtual dressing rooms that make it easy for shoppers to find the right size or explore options that are not in stock but can be ordered. For example, Bloomingdale​'s offers customers the option to try on outfits in 3D virtual dressing rooms, which allows them to see their look in real-time and solicit feedback from friends on social media networks. 
  • Payment options: From self-updating Bitcoin tags to digital wallets, retailers are offering customers more choices for payment types. Apps can allow gift card owners to pay by tapping their phones. While Bitcoin hasn't become mainstream for retail purchases, the BitTag technology shows a move toward expanded self-checkout options, CNN reported. Shoppers can shake the tag and then pay with their phones.
  • Mobile POS: With tools like mobile POS systems, store clerks can help customers check out anywhere in the store, reducing time spent waiting in check out lines. Some POS software empowers employees with instant access to product information, enabling them to serve as a valuable, real-time resource for shoppers who have questions about additional stock or alternative models. In-store kiosks can also provide some of the information access that consumers enjoy while shopping online.

Overall, these trends point to a need to incorporate technological advancements across channels. While the specific options are different in stores and online, merchants can work toward the same goals – convenience, information, empowerment, engagement – to provide customers with a better overall experience, regardless of the channel they choose.

Personalized retail marketing tips for small business owners

Retail business intelligence is all the rage, particularly as big data analytics becomes more available. But not all retailers can pour a significant chunk of money into collecting massive amounts of information and hiring analytical experts. Nonetheless, small and mid-sized businesses (SMB​s) can take advantage of personalized marketing ideas to better engage their customers and drive sales.

Retailers can use ecommerce software to offer customers additional shopping opportunities. It's helpful to keep Web and mobile resources consistent, but the sites don't have to be complicated. SMBs should focus on implementing one strategy at a time, Small Business Computing recommended, such as using shoppers' IP addresses to present products that are tailored to current weather conditions. Forbes magazine identified a number of enhancements retailers can add to their websites to create personalized presentations. For example, merchants can use recommendation engines to offer their shoppers suggestions based on their search history.

Overall, there are small-scale ways that SMB​s can take advantage of the information collected by retail technology to improve their marketing strategies. With the growing emphasis on personalization across the retail industry, these current trends give SMB​s a chance to shine where they already excel. As Forbes magazine observed, smaller retailers often thrive on building personal relationships with their customers. Merchants can capitalize on these skills by translating them to their marketing efforts.

Click and collect gains popularity in the United Kingdom

In the United Kingdom, merchants are offering customers new options to make ecommerce more convenient. The "click-and-collect" system means that consumers buy items online and then pick them up from specified locations instead of choosing home delivery. Retail customer trends point to the popularity of the service, and merchants are transforming this concept to provide shoppers with added conveniences, such as:

  • Faster delivery. With click-and-collect services, shoppers don't have to wait as long to receive their orders. Instead, patrons can reserve items online and then pick them up from the store or from designated areas, The Drum explained. Other merchants provide fast item delivery by avoiding the "final mile" and leaving packages at central pickup locations.
  • Subway pickup. The Transport for London (TfL) public transportation system has formed partnerships with retailer industry leaders to offer pickup locations from Underground station car parks. After initial success with pickup lockers for several retailers, the transit system recently announced agreements with additional merchants. The service gives customers a convenient way to pick up their purchases on their commute, drawing business for the retailers.
  • Try on items first. At a shopping center in Westfield, customers pick up their online click-and-collect purchases and try them on before taking them home, The Telegraph reported. Instead of having to transport items back and forth if they don't fit, consumers can make decisions before leaving the pickup center.

What millennials really want from retailers

 

 

As millennials come of age, they’re an increasingly important demographic for the retail industry.

Although analysts use different starting points for the generation, most people generally regard millennials as the group currently ranging from late teens to early thirties.

According to Venkatesh Bala, chief economist and director of the Economic Center of Excellence of the Cambridge Group, in an article for Quartz, this group encompasses up to 80 million people in the U.S., spends around $600 billion annually and could account for $1.4 trillion in commerce by 2020.

Therefore, merchants have a vested interest in understanding this demographic and its retail customer trends.

 

Information drives millennials

Much has been said about the technology habits of this age group, inspiring retailers to focus on mobile and ecommerce strategies.

However, the real takeaway is that millennials want more information, are good at finding it and use it when making decisions.

Millennials are resourceful at price-checking and comparison shopping, Bala emphasized – they know how to use sites like Hukkster.com and have more options at their fingertips than ever before.

For that reason, it’s important for merchants to consider their online presence.

With or without ecommerce software, retailers can take advantage of the Web by making sure millennials can find their information.

Staying on top of competitive pricing is crucial for marketing to this generation, which tends to be thrifty.

Growing up in a recession has proven difficult for the age group as they transition to adulthood.

Pew revealed that millennials are underemployed and many are living at home with their parents.

CNBC remarked that millennials are still catching up from the slow start that defined their entrance into the job market.

Consequently, it’s important for retailers to understand more specifically what these consumers need and how they’re balancing their budgets.

 

In-store experiences and engagement

According to research by Merchant Warehouse and Retail Pro International, millennials prefer to buy certain products in stores, including apparel, footwear, home goods, furniture and jewelry.

They might still check information online before making a purchase, but they want the physical store experience for these items.

Some merchants are catering their in-store experience to these younger consumers through strategies like “pop-up” retail stores or modern retail technology, Bala explained.

He noted that Nordstrom has crafted a more edgy, youthful image by using mobile POS systems and offering brands that are relevant to millennials.

Overall, millennials want convenience, options and engagement.

Omnichannel marketing is a useful approach because it engages younger consumers and leaves them with both consistency and options.

Mobile is central for retail marketing in 2014

With smartphone and tablet use growing globally, merchants are planning to refine their mobile presence in 2014 to stay competitive. The drive to be visible and engage consumers across devices is a core component of multichannel store operations. As part of an effort to improve the customer experience, retailers are prioritizing mobile for the coming year.

According to the 2014 Shop.org/Forrester Research Inc. State of Retailing Online survey, more than half of retailers intend to improve their mobile presence, focusing on responsive design, mobile site optimization and tablet redesign. In 2013, smartphone revenue grew 113 percent and tablet revenue grew 86 percent from the previous year, the survey found. This was driven both by the increasing prevalence of mobile device ownership – especially among wealthier demographics – as well as the greater availability of mobile apps and coupons, Business Insider noted. 

Forty-six percent of retailers plan to redesign their websites, according to the survey, and site experience is instrumental to customer conversion. Mobile improvements are part of a general trend toward increasing personalization and convenience for shoppers. These strategies are made possible by advances in retail customer intelligence, which merchants can incorporate into designs for their mobile websites and apps. 

Repairing relationships with unhappy customers

In the retail industry, customer relations are key. Merchants reach out to consumers in a variety of ways, including personalized email campaigns, social media, customized offers and engaging in-store experiences. Unfortunately, retailers can't please everyone, and even the best stores sometimes make customer service mistakes. In an era where consumers can rapidly spread discontent through online platforms, it's important to make an effort to repair relationships with dissatisfied customers.

When shoppers voice their dissatisfaction on social media networks, it's best to respond rather than let the comment simmer. The Connection, a contact center blog, suggested retailers respond as soon as possible, keeping a positive tone and maintaining professionalism. If possible, the source said, it's helpful to move the conversation to private channels, but merchants shouldn't delete the original comment because that looks like they're trying to cover up mistakes. Additionally, despite improvements in the way retail management software integrates channels, it's best to respond to customers in the same way they offered feedback, according to Social Barrel.

Regulating online feedback is important for retailers as the multichannel approach becomes more central. According to The Guardian, it's more essential than ever for merchants to build brand loyalty by engaging with customers.

Improve store operations with better inventory management

Online retailers and brick-and-mortar shops alike depend on good inventory management to run an efficient business. Having the products customers want, when they want it, can be the determining factor in who makes a sale. Because warehouse space is limited and shipping takes time, merchants need to optimize their inventory processes.

David Sasson, president and co-founder of overstockArt.com, described the challenges and best practices for effective inventory management in Practical Ecommerce. It's important to hold stock, he noted, but usually inefficient to buy a lot of items in bulk. In fact, retailers have the highest return on investment when they maintain revenues while holding the least inventory.

Businesses can use retail customer intelligence to anticipate what consumers will want to buy before the demand peaks. In Entrepreneur magazine, Ronald L. Bond, a retail business owner and consultant, advised store managers to watch for indicators such as:

  • High-selling items with limited stock availability
  • Slow sellers and seasonal goods that can be replaced with more popular items
  • Hot sellers with rising sales

Retail management software can help merchants identify trends and better track the inventory they have on hand. Integrated systems can also take advantage of technology such as RFID tags to maintain more accurate records of product location.

Can responsive design help integrate channels?

For omnichannel retail marketing, consistency is key. Customers want to find the same deals, prices and service regardless of how they make a purchase. In addition to integrating their retail management software across channels, merchants can provide consumers with a more seamless experience by making sure their online presence is consistent for all devices. Responsive website design is one option that retailers should consider as mobile becomes increasingly important.

Mobile presence central to marketing
According to Strategy Analytics, mobile phone sales have increased about 5 percent each year, reaching 1.7 billion units in 2013. As smartphone and tablet use becomes more pervasive, shoppers are turning to their devices to look up stores, browse offerings, read emails and make purchases. For that reason, merchants that want to stay ahead of the competition need to make sure their Web presence is convenient and appealing to mobile users.

When creating a mobile presence, retailers must make sure it's integrated with the rest of their Web presence and retail technology. According to Retail Technology Review, merchants need to ensure that customers can see up-to-date information about inventory, prices, deals and orders on any platform. Consumers expect the same procedures and policies for making purchases, regardless of the channel they're using. Unfortunately, the source noted, less than half of retailers use integrated business processes and technology.

Responsive design can help simplify online presence
One way to improve multichannel integration is to make sure websites are consistent across devices. For some retailers, responsive design is the best option. Responsive websites automatically adjust based on screen size, device and locality, providing the optimal Web experience on any devices, without requiring merchants to maintain individual sites for each platform. This helps to ensure that price changes, inventory updates and store news are all presented in the same way for all devices. Responsive design also helps websites to appear higher in Google search results, Business2Community noted.

At the National Retail Federation (NRF) Convention, held January 12-15 in New York City, industry leaders discussed the pros and cons of responsive design. The development process can take longer, and might be challenging for stores with a lot of SKUs, said Jay Dunn of Bare Necessities, according to the NRF blog. Other retailers use a combination of responsive design, mobile websites and apps to provide the best information for customers. For example, the Mall of America uses responsive design for its main site but creates unique, simple sites for promotions that change frequently.