In the old days, the general store knew each of its customers by name, and even offered house accounts as a convenience for customers. Although those accounts were kept on handwritten ledgers, it was really the humble beginnings of the loyalty clubs we know today: Because you shop here regularly, we will allow you to run a monthly tab.

From club memberships to mobile apps, merchants encourage customers to return by offering them incentives like discounts or gifts in exchange for their loyalty.

As a result, shopkeepers got to know their customers. Today’s loyalty clubs offer that advantage as well as, hopefully, a few more perks for customers. Retailers that capture data regarding past shopping history can use that information to reinforce that customer behavior — “Come back to Joe’s when you need paper clips again” — but it does little to extend revenue. The report, “Customer Lifecycle Engagement: Imperatives for Midsize-to-Large Companies,” reveals that marketers think they know their customers well: 53 percent of respondents said they have an excellent understanding of customers’ purchase history, followed by 42 percent for basic demographic information such as gender and age. However, the reported concluded that they lack the deep data insights that would enable them to send personalized, relevant campaigns. Less than 25 percent of marketers are using channel-preference data, propensity scores or household composition. Such often-overlooked pieces of data will reap results, because of their inherit value and because competitors are unlikely to be considering that information.

Loyalty data of past behavior is valuable because when the correct analysis is applied, it becomes predictive — and that’s where retailers will really profit.

While some retailers are stingy with what they offer customers in return for personal data — a strategy that, ultimately, will be unsuccessful — beware of giving away too much in an attempt to improve loyalty. A study by the Harvard Business Review revealed that offering too many perks or services can be unproductive.

Authors Louise O’Brien and Charles Jones in, “Do Rewards Really Create Loyalty?” note that small businesses have traditionally compensated loyal customers with free or bonus items. But as companies grew, it became harder to tell which customers were being loyal as well as the most valuable to keep:

“Rewards programs are widely misunderstood and often misapplied. When it comes to design and implementation, too many companies treat rewards as short-term promotional giveaways or specials of the month. Approached that way, rewards can create some value by motivating new or existing customers to try a product or service. But until they are designed to build loyalty, they will return at best a small fraction of their potential value.”

There is a difference between the loyal customer who comes in monthly and spends $50 and the one who spends $500. Both are loyal, and both are probably worth rewarding, but the customer spending more would probably enjoy (and respond favorably to) receiving a unique promotion. Most companies treat all customers as equals: Everyone gets a 10% off coupon. Those VIP customers are quick to pick up on this and if they aren’t made to feel special, they are likely to find appreciation in the arms of your competitors.

O’Brien and Jones note, “A company that offers average-value products and services to everyone wastes resources in over-satisfying less profitable customers while under-satisfying the more valuable loyal customers. The outcome is predictable. Highly profitable customers with higher expectations and more attractive choices defect, and less desirable customers stay around, diluting the company’s profits.”

What are you doing to keep your high-rollers happy?

This entry was posted by Jennifer Bosavage on Wednesday, December 24th, 2014 at 10:32 am .

The technology to make mobile payments is growing in popularity.

Mobile payment strategies have been around for much longer than you may recall — but until Apple Pay rolled out this Fall the mention of “mobile wallets” prompted quite a bit of eye rolling. But remember how tablets were stuck in neutral until the iPad came along? A bit of that Apple magic has been sprinkled onto its payment solution, according to recent figures. This holiday season saw an increase in use of mobile payments, and that’s most certainly been driven by Apple Pay.

An ITG survey recently said that Apple Pay — which debuted on October 20— accounted for 1% of digital payments, while Google Wallet, launched in 2011, was responsible for 4%. The study’s authors noted that the 1% figure was impressive given that the service is only available to Apple customers with the newest hardware and it is currently supported by a relatively limited list of merchants. Sixty percent of new Apple Pay customers used Apple Pay on multiple days through November, suggesting strong customer engagement. In comparison, new PayPal customers used the service on multiple days during the same time period just 20% of the time.

Apple Pay could pose a major threat to market leader PayPal’s current dominance of the Mobile Payment space, according to Steve Weinstein, senior Internet analyst at ITG Investment Research. Weinstein said that PayPal’s infrastructure barriers, including challenging relationships with payment counterparties and no biometric capability, means it will be difficult for PayPal to match the ease of use and consumer appeal of Apple’s solution.

As the service grows in popularity, Apple will profit commensurately. Banks and payment networks will pay the iPhone maker more than 15 cents out of a $100 purchase. ApplePay uses NFC and Bluetooth to enable mobile, “touchless” payments. During in-store transactions, Apple passes a cryptogram and token to merchants using NFC, and Apple will be paying a (lower) “card present” rate. But, when using Bluetooth, or when making an in-app purchase using Apple Pay, the transaction fee will be the equivalent to a (higher) “card-not-present” rate. As the CEO of a company that specializes in gathering mobile shopper preferences mentioned to us yesterday: “Until Apple came out with ApplePay, no one was really thinking about using Bluetooth connectivity for this.” Indeed.

The challenge for Apple is that there are many perfectly good iPhones out there, whose owners are in no rush to upgrade. When and if they do upgrade to an iPhone 6, the number of mobile payments seems likely to jump. So, while the number of users using Apple Pay will likely grow significantly during 2015, it’s unlikely to “go viral,” so to speak.

In addition, many retailers are upgrade weary having just replaced — or are in the midst of swapping out — their swipe pads to implement chip-and-pin security measures, to meet the mandated deadline of October 2015. Adding an NFC reader to those devices is roughly $40.

And some retailers have opted to sign up with a competing, yet-to-be-seen offering from MCX, called CurrentC. The key will be how consumers take to CurrentC, which is being embraced by many top retailers, including Walmart, RiteAid and Target, at the exclusion of Apple Pay. By some estimates, that shuts Apple out of more than a trillion dollars in potential annual revenue.

We’ll know in the middle of next year whether Apple will pick up disillusioned CurrentC users, or pack up and leave the market to MCX.

Smart money may be on the Apple magic, but MCX may have a trick or two up its sleeve . What do you think?

This entry was posted by Jennifer Bosavage on Tuesday, December 23rd, 2014 at 7:50 am .

The holidays will soon be over — and with that comes all those returns.

Surely someone wants that luxurious mint green cashmere Armani sweater, violet Diane Von Furstenberg wrap dress or deep orange Prada bag, just not the first owner.

So back it comes.

As a retailer, you are trying to make way for Spring fashions, and as delightful as these items are, they are just not a fit for this time of year.

You need to move them, pronto.

However, mark downs can make items seem “cheap,” and, particularly in luxe goods, perception is everything.

How to get these products into appreciative hands?

Analyze your shopping data and you just might find some happy homes for these “misfit” goods.

The most loyal among your shoppers may be in store for some good deals if you can decipher which customers should be targeted for specific items.

By narrowing down the prime candidates, retailers can clear out merchandise in a way that is much more appealing than throwing it on a clearance table.

That is where clienteleing— the art of tailoring of a sales message to a particular customer or segment — excels.

Luxury shoppers in particular respond well to a personalized approach, as evidenced by the popularity of the “private shopper” at high-end retailers.

Retailers can start by analyzing their most loyal customers’ information.

What are their shopping habits, and what might entice them to come into the store?

Perhaps a promo code in an email or text message to these valued customers is in order.

Another idea is to compose an email with a personalized URL such as www.JensShoes/CustomerName.

Now you’ve created not just a multi-channel experience but a personalized one to boot. (Excuse the pun.)

Within the email should be some unique information directed at that particular customer.

For example, if a male shopper purchases a similar type item every year at the same time for his wife, the retailer can send him an email with some enticement for him to return.

Or, a phone call from the lead sales associate can work wonders.

Technology sometimes seems at odds with old-school ways; thinking of associates armed with tablets in a general store with its neighborly ways seemingly offers an anachronistic view of the retail experience.

But not really; by embracing technology, retailers can nurture an atmosphere of familiarity, one where everybody knows your name — and your shoe size.

This entry was posted by Jennifer Bosavage on Thursday, December 18th, 2014 at 7:11 pm .

According to Forrester Research, the public cloud market is estimated to reach $191 billion by 2020, quite a boost from 2013’s $58 billion. Cloud applications will lead the charge, accounting for approximately $133 billion in revenue by 2020. Cloud platforms will bring in roughly $44 billion in sales, and cloud business services will amount to some $14 billion in revenue during that time.

At the same time, mobility is a prime objective for retailers, who are looking to improve flexibility among workers; retail executives are looking at cloud computing initiatives to fulfill that mission. In a new report released this week, “Elevating Business in the Cloud,” KPMG reported that companies are often choosing to implement cloud technology not only to improve cost efficiencies — which is the #1 reason — but also to facilitate a mobile workforce.

The survey was also conducted two years ago, when companies were first begining to implement BYOD strategies and create more mobile employee workforces. While just 15% of respondents in 2012 sited the enablement of a flexible and mobile workforce as a driver of cloud usage, in the recent survey 42 percent of respondents said mobility was a transformative mechanism to implement cloud solutions.

Perhaps more than any other group, retailers recognize the importance of using cloud to connect with consumers. Compared to other industries, retail executives in the survey were more likely to say their organizations are using cloud to improve alignment and interaction with customers, suppliers and business partners. According to the report:

“To maximize holiday revenue, for example, it is critical for retailers to turn to cloud solutions to attract and support mobile shoppers. Consider that Shop.org expects sales in November and December 2014 to grow between 8 and 11 percent over last holiday season – to as much as $105 billion. Mobile-optimized e-commerce or customer support tools, for example, can give retailers a competitive advantage during the peak holiday season, when providing personalized and instantaneous service is the new requirement for success. Retailers that aren’t able to respond to the expectations of empowered consumers will see them jumping ship, as they tap into online pricing and product information and seize the best deals elsewhere.”

Cloud computing can support initiatives such as clienteleing, a customer-centric approach that analyzes shoppers’ data and offers customized, personal solutions that can benefit retailers as well as their customers. Today’s shoppers are exacting: They want good value, quality service, a great all around experience.

As Jeanne Johnson, a Principal on KPMG’s Management Consulting team who focuses on consumer markets, pointed out in a statement, “Today’s empowered consumers expect more from their retail experience, and this adds pressure and uncertainty to retail businesses and operating models. Consumers expect to be known, recognized, and offered personalized insight and offerings. They want to interact with the brand in person, on-line, on the go – on their terms. They also prefer ready access to knowledgeable and responsive associates across those various channels.”

Cloud computing is making that personal experience a reality. Employees can access the cloud from wherever they are in a store;  transactions are no longer chained to the cash wrap. They can go where the action is — which is where the customer is. Increased employee productivity (54%) and higher employee satisfaction and flexibility (48%) are the top two benefits the survey respondents attributed to using cloud to improve workforce mobility, and greater productivity means higher transaction values for the retailer.

This entry was posted by Jennifer Bosavage on Wednesday, December 17th, 2014 at 7:10 pm .

The consumer landscape has been in a state of perpetual flux for several years now, driven by an ever-younger population of individuals becoming the most important purchasers in the United States. Additionally, new technologies have quickly transformed the requirements associated with retail management and the best practices of customer prospect targeting, conversion and retention in a relatively short period of time. 

The most successful retailers of the future will be those that handle the ebb and flow of consumer preference evolution in stride, focusing on agile strategies that adapt whenever necessary. This is no easy pursuit, but a little guidance, a lot of internal research and plenty of healthy technological provisioning can help companies reach and retain a higher volume of prospects in the coming years, leading to increased financial performances. 

Perfection in practice
The Drum recently reached out to several marketing directors, professionals and experts regarding their sentiments on agile advertising strategies, affirming that adaptation is among the most critical actions in this regard. Once a business begins to lose its relevance in the current market, significant issues will inevitably manifest into reality, such as a lack of prospect conversions and hindered retention of otherwise loyal customers. 

According to the news provider, one of the main drivers of an agile retail marketing strategy is adequate and consistent research, working to identify trends as they proliferate – or even before – rather than only obliging the evolutions in a reactive fashion. When it comes to virtually any type of business strategy, proactive companies will almost always outperform reactive ones, regardless of which industry one might be discussing. 

Analysis of available data will often indicate what needs to be done to improve the marketing strategy in stride. 

"We know that we need to engage across multiple channels," Web-based retailer Big Lots Director of Marketing Strategy Brandi Ply told The Drum. "This holiday season we have increased our focus on social and digital media, including creating an online only holiday gift guide, multiple social sweepstakes across Facebook, Twitter and Instagram, creating video content specifically for YouTube, and pushing content on Pinterest for the first time."

The source went on to note that beyond agility, marketing programs must be optimally integrated to ensure a consistent brand image across channels and among customers to be truly successful. 

Takeaways for digital retailers
Online businesses have unique opportunities to create more cohesion throughout the market research, lead generation, advertising, sales and client relationship management cycle, especially as so many consumers are looking to the World Wide Web to connect with companies. For this reason, the focus in 2015 should be establishing a seamless strategy that links each investment into one organic system of brand management. 

When online retailers can strike the right chord in marketing, sales and client relationship management, the sky will be the limit for revenue and visibility growth, while customers will inherently enjoy a more preferable experience over time. 

This entry was posted by Retail Pro on Wednesday, December 17th, 2014 at 9:11 am .

Mobile shopping continues to grow in use, and now accounts for roughly one-third of all e-commerce transactions, according to a recent report from Criteo, a performance marketing technology company. Given that the Census Bureau of the Department of Commerce reported last month that the e-commerce revenue total, adjusted for seasonal variation but not for price changes, was $78.1 billion, that’s a very big number. E-commerce sales as percent of all retail sales is currently 6.60%, up from 6.40% last quarter. That’s a quarterly annualized growth rate of 12.50%.

Online retail shifts to mobile content

So if your retailers are not interested in optimizing their m-commerce platforms, they are in for a rocky road for the foreseeable future.

Criteo, in its State of Mobile Commerce report, found that mobile is responsible for more than 30 percent of eCommerce transactions globally and more than 27 percent of eCommerce transactions in the United States.

“There has been a significant lack of information about mobile commerce, leading many marketers to under-estimate the opportunity,” said Jonathan Wolf, Criteo’s Chief Product Officer, in a statement.

So much for thinking smartphones were simply being used for comparison shopping and showrooming. Clearly, shoppers are purchasing through their phones, in fact they now beat out tablets for being the shopping device of choice. The study found 53% of mobile retail transactions use a smartphone. And why not? When a retailer provides a simple, easy to understand and navigate interface with a fast response time, why not purchase while on the site? It’s a no-brainer. Illustrating that trend, mobile conversion rates are improving.

“The report demonstrates that mobile is now about purchasing not just researching, and that there are huge opportunities for eCommerce businesses to capture increasing sales via mobile devices, particularly in the retail and travel industries,” added Wolf. “We expect mobile to rapidly move toward 50% of all transactions, as mobile usage continues to skyrocket and retailers better optimize mobile sites for conversion.”

The report notes that a third of fashion transactions now come from mobile, with average order values close to desktop levels. Further, the top 25 percent of U.S. retailers — companies that would include Walmart, Kroger, Costco, Target and The Home Depot — generate almost 40% of their e-commerce transactions from mobile, compared with 27% for retail in general. The bottom quarter see a very small amount (5 to 10%) of transactions from mobile. That’s four times the share of mobile transactions, a sizable difference.

Retailers should also be aware that shoppers are using various devices; Android devices now make up 39% of smartphone transactions in the U.S. for retail. In addition, Android smartphone share of ecommerce transactions is higher than the iPhone’s in several countries such as Germany, Italy, Spain, South Korea and Brazil.

Mobility, once the wave of the future, is here, and retailers who are ill-prepared will drown in their own antiquated ways. Retailers must ensure their m-commerce sites are tied into their e-commerce and brick and mortar channels, and are effortless to use, because mobility without ease will get them nowhere fast.

This entry was posted by Jennifer Bosavage on Monday, December 15th, 2014 at 9:17 am .

The past 12 months have been filled with gains in the ecommerce arena, as companies from around the globe have become a bit more competitive in the digital realm. No longer are retailers capable of truly competing without having at least some foundation in the World Wide Web, while the complexities and challenges of doing so in such a way that separates the business from others in the market are intensifying as the years roll on. 

In a word, the time is now to iron out ecommerce strategies before the new year begins, as studies have indicated that consumers will continue to flock toward these platforms and websites to make purchases on products and services. When these platforms are efficient and intuitive, strategies are aligned with best practices and marketing programs are fueling traffic to the websites, retailers will be able to position themselves for success. 

How to make it fly
CIO Magazine recently suggested several steps all ecommerce retailers should take soon to ensure that they perform more prolifically in 2015 than this year, affirming that this begins with taking a close look at the website and evaluating where it is in need of improvement. Considering the fact that the firm has 12 months to look back on, leaders would do well to also look for issues that caused website disruptions and outages. 

According to the news provider, when evaluating the accessibility, seamlessness and reliability of their website, decision-makers might want to also look at the design and layout of various pages, ensuring that every component is going to catch the eye of the viewer. Not surprisingly, the source urged companies to make their ecommerce websites accessible via mobile devices, as smartphones and tablets continue to take up a larger market share of all revenues online. 

This was further illuminated during Thanksgiving weekend, when mobile devices accounted for much higher rates of purchases on Black Friday and Cyber Monday than was the case in 2013. All signs point to continued growth in the frequency of mobile-driven purchases and commerce. 

Finally, CIO Magazine went on to explain that the metrics and tools used to evaluate performance and other activities should be ironed out, with analytics solutions being deployed as soon as possible for maximum intelligence in real time. 

Keep it cohesive
Another strong move ecommerce retailers should consider making is to adjust marketing plans to ensure that brand image is cohesive across all platforms in use, and that the highest possible traffic volumes are hitting the actual product and service pages. When marketing and ecommerce platforms are disjointed, consumers will be less likely to see a consistent and preferable brand voice and image, leading to fewer conversions in many situations. 

By leveraging a comprehensive strategy that governs activity from lead generation all the way through client relationship management down the road, 2015 can be a highly successful year for all retailers. 

This entry was posted by Retail Pro on Monday, December 15th, 2014 at 8:53 am .

It may not be a blue Christmas after all.

After some preliminary doom and gloom reported from some retailers last month, a pall was cast upon Commerce reported Thursday that November retail sales reached $449.3 billion — up 0.7 percent compared with October and an increase of 5.1 percent compared with November 2013. In addition, total retail sales from September through November are up 4.7 percent annually. That’s much better than expected, on the heels of Black Friday and Thanksgiving shopping reports that were flat.

Avoiding a sales slump similar to that of the 2013 holiday season

The National Retail Foundation reported similar findings to the Commerce department’s. It said that retail sales rose .6 percent in November from the prior month. That’s in line with the organization’s forecast for the holiday shopping season overall, of a 4.1 percent increase in revenue from 2013.

Experts noted that shoppers have taken advantage of some early discounts offered, and are pacing themselves in the weeks leading up to Christmas and Hanukah.

“It is important to remember that for most retailers, the holiday season is a marathon, not a sprint, and there are plenty of important holiday shopping days ahead of us, including the week leading up to Super Saturday – the day many expect will be the biggest shopping day of the season,” NRF President and CEO Matthew Shay said in a statement.

So shoppers are stretching out their spending — and they probably have a bit more to spend this year as well. Gas prices are down significantly, from an average of $3.27 on Dec. 2, 2013, to $2.67 today. Job creation is up also, with employment up 321,000, an average monthly gain of 224,000 during the prior 12 months. Those are positive signs that while spending may be steady, the NRF’s prediction of greater sales may be on target.

Now is the ideal time for retailers to take advantage of increased sales and take stock of their technological prowess. Those who can implement technology such as RFID tags, mobile check out and data analysis will realize cost savings in their daily procedures:

• RFID helps store associates and managers improve tracking and stocking inventory in stores, and make better decisions when ordering merchandise and selecting products. Additionally, overall loss prevention is improved because the exact product locations are known and logged throughout the brick-and-mortar store.
• Mobile checkout lets retailers manage long lines and also provides the opportunity for associates to interact more with customers. By getting salespeople out from behind the cash wrap, they are able to get to know their customers better and provide consultative sales, thereby increasing revenue.
• As mobile, tablets and social media becomes increasingly popular, more customer data is being collected. Today’s retailer knows not only the basic demographic information about a customer, but purchase history, call center interaction, mobile/social interaction, supply chain data as well. The amount of information available to retailers is unprecedented, even for brands that have years of experience analyzing customer data. By analyzing this information, retailers can make appropriate sourcing and marketing decisions.

The time is ripe for retailers to review their IT and make appropriate upgrades. Consider it a gift that will keep on giving.

This entry was posted by Jennifer Bosavage on Thursday, December 11th, 2014 at 8:25 pm .

Retailers that take the most intelligent stances on strategic planning and general management tend to be the most successful in practice, as every step taken should be measured, assessed and driven by purpose. When looking at the retailers which tend to have the most consistently positive financial results at the end of each year, it will quickly become clear that none of their strategies are lacking in intelligence, bravery and foresight. 

Now, as the retail sector has been forever transformed by the advent of new technologies, notably ecommerce platforms and websites, the rules of engagement have changed significantly, and in a relatively short period of time. These businesses will need to remain extremely agile to sustain growth in the coming years, and this begins with understanding where the trends are leading their operations and how to best keep pace. 

What the pros have to say
International Data Corporation recently released the results of its Worldwide Retail FutureScape study that stated omni-channel integration is going to become more highly demanded among businesses in the industry. Similarly, each channel is expected to require a bit more investment in the coming years, with IDC forecasting more than half of all retailers to launch mobile payment systems and programs to enhance their clients' experiences. 

"Relentless technology innovation underpins consumers' participatory behavior and expectations," Leslie Hand, IDC Retail Insights vice president, affirmed. "The most successful retailers will find opportunities by putting mobility, analytics, cloud, and social to work in their customer and operations strategies, adopting omni-channel integration technologies and IT governance, unifying customer engagement for hyper-personalized loyalty, adopting product intelligence for marketing and competitive insight, employing location-based services via analytics driven agile engagement and operations, utilize socially-networked on-demand delivery services, and gain share with private label merchandise."

Furthermore, the firm went on to explain that consumer-driven private brand growth will begin to truly take hold in the coming years, with retailers focusing on the development of products that fit a specific demand. Perhaps the most positive take away from this forecast report was the segment on security, in which analysts predicted that 50 percent of the largest retailers in the world will enjoy 50 percent fewer threats thanks to increased investment in protection. 

Riding the wave
Retailers cannot sit back and wait for trends to become a bit more palpable before diving in, as the sector and consumer preferences are likewise evolving at an extremely rapid pace going into the new year. Although some predictions listed above go beyond the next 12 months, foresight will be critical in planning and strategy building to ensure a brand's relevance is sustained over time. 

With the right level of research and planning, retailers can begin to enjoy the enhanced opportunities presented by a return in consumer spending and general economic improvements that have taken place throughout the past couple of years. Focus on agility and alignment and the sky will be the limit for financial and operational performance improvements. 

This entry was posted by Retail Pro on Thursday, December 11th, 2014 at 4:01 am .

The omnichannel is evolving further this holiday season, as online shoppers will be able take advantage of same-day delivery at several large retail chains as well as several malls. The idea is to combine the benefits of e-commerce — 24 hour availability and convenience — with those of brick and mortar — namely, immediate gratification.

Online ordering and same day delivery helps retailers compete against Amazon.

Two retailers, Macy’s and Bloomingdales, have launched same day delivery for their online customers who live within a 15-mile radius from the store. The solution takes the click and collect model and extends it to delivery. It works like this: A shopper buys online from Macy’s, for example, and selects same day delivery. Macy’s collects the items and brings them to a central location within the mall. A service called Deliv picks up the order and brings it to its destination the same day the order is placed.

Of course, the system requires that either online and brick and mortars offer the same inventory, or that the service is not provided on every item available online. Further, malls are offering this service to their retail tenants as a way to promote foot traffic in the stores; the pleasant experience the customer had online will encourage him or her to visit down the road.

Deliv uses a same-day, crowd-sourced model similar to the car service app, Uber. However, Deliv corrals drivers to pick up packages for delivery, rather than customers looking for a ride.

Deliv offers a welcome convenience to the mall-weary in Chicago, Houston, Los Angeles, San Francisco, San Jose, Seattle and Washington, D.C. It, like a similar service called WeDeliver, helps retailers compete directly against the same-day delivery service offered by Amazon. While Walmart is trying out a similar service,  working with third-party crowdsourced services seems to be more economical, allowing traditional retailers to cut delivery costs and giving Amazon a run for its money. But don’t count Amazon out just yet; it is testing its own fleet of trucks for same-day deliveries — and has even experimented with using taxis.

This entry was posted by Jennifer Bosavage on Wednesday, December 10th, 2014 at 9:01 pm .