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Experts Agree: Customer Engagement Key to Retail Success

Clarus Commerce CEO Tom Caporaso comments on the important role that premium loyalty programs play in helping brands significantly enhance membership and engagement levels as retail continues to change.

(As originally published on WWD on June 20th, 2018.)

Total global online sales rose 25 percent year-over-year to $2.3 trillion in 2017, according to eMarketer, and is on track to do the same this year. And while the share of sales in physical stores is expected to remain at about 88 percent of total sales, the explosive growth of e-commerce has been at the heart of the industry’s remaking.

For apparel brands and retailers looking to maximize sales in stores and onlinethrough this transformation, industry experts urge companies to double down on marketing, customer service and consumer engagement.

Nancy Friedman, a customer service expert and president of The Telephone Doctor Customer Service Training Inc., trains retailers and brands on how to “provide improved customer service to increase sales and encourage return shoppers.”

Friedman said while the growth of online sales “has chipped away at the market share of bricks-and-mortar retailers” companies can attract shoppers and increase repeat customers via better customer service.

“More business is lost due to poor service and poor treatment than poor product,” she told WWD. “Retailers spend lots of marketing dollars trying to convince us to buy their products, but if that contact is not handled just right at the point of sale, all that money is wasted. Customers service failures not only impact sales and return business, but can damage a brand and lead to online shaming on social media.”

Friedman suggests brands and retailers to train sales associates. “Hire a professional trainer to come to your store and train your workers how to treat the customer right,” she explained. “Poor customers service is almost always lack of proper training. Smart retailers that truly care about dealing with the public and providing quality customer service, invest in training programs.”

On the digital side, companies are turning to artificial intelligence and machine learning platforms to develop more personalized marketing. Greg Zakowicz, senior commerce marketing analyst at automation marketing solution provider Oracle Bronto, which counts Rebecca Minkoff, Timex, Lucky Brand, Theory, Brooks Sports, Ashley Homestore and Christopher & Banks as among its clients, said in the current climate e-mail marketing “continues to be an extremely effective tool for driving sales.”

“However, when it comes to life cycle messages, companies often settle for basic best practices, leaving money and a better customer experience on the table,” Zakowicz told WWD. “Consider a welcome series, a series of messages sent to a new subscriber onboarding them with the brand and provide reasons they should shop. Often, the same set of messages is sent to all e-mail subscribers, regardless of age, gender, or other defining characteristics. Using data such as source of sign up or e-mail click behavior, a retailer can automate messaging in the welcome series that correlates to their interest.”

Zakowicz said if a new subscriber clicks on a “maternity link” in the welcome message, for example, “the subsequent messaging could be maternity-themed. For those who click on the shoes link, they would be treated with relevant shoe information. These are messages that provide substantial relevance, and for companies that have implemented them, convert at higher rates.”

Zakowicz also said product recommendations (in an e-mail and on a retailer’s web site) can also drive conversions. “Inside of e-mails, product recommendations are an essential tool to turn the everyday batch-and-blast message (which most retailers send) into something more relevant to the consumer,” he explained. “And consumers today expect relevance. By using consumer data such as email activity, web browsing activity, and purchase activity, to name a few, an effective marketing automation platform can dynamically insert intuitive, consumer-specific recommendations into an email message.”

He went on to note that this same approach holds “true for web site recommendations. Provide consumers of today with what they want; a relevant and more personalized experience.”

Consumers also demand perks for being loyal customers — but the growth of e-commerce has changed the rules. Tom Caporaso, chief executive officer of retailloyalty provider Clarus Commerce, said amid retail’s transformation, traditional retailers are “rethinking loyalty” programs. Caporaso said premium loyalty programs are “becoming top of mind given the shift of customer expectations toward instant gratification.”

“Many retailers are realizing that traditional points-based loyalty programs fail to differentiate themselves and don’t bolster or create actual loyalty,” he told WWD. “Fee-based premium loyalty programs help brands significantly enhance membership and engagement levels, spend levels, and have created a sense of community for customers that has created increased advocacy.”

One perspective that is essential amid these market changes is having a clear understanding of the customer and their needs – across all channels. Michael Osborne, chief executive officer of behavioral marketing platform provider SmarterHQ said retailers and brands have “the data to know when and what they’re browsing, adding to cart, and eventually buying, across all of your channels — online, mobile and in-store.”

“If that data is silo’d and not matched across channels, you are missing out on serious opportunities to understand how your customers want to browse, shop, and eventually buy,” he told WWD. “Tailor your marketing to that and don’t fight with your consumers desired paths. Adapt your strategies to know who likes to browse online and buy in-store, versus shop exclusively online. Tailoring experiences to the ever-changing needs of your consumers means you won’t alienate them or let them drift to other brands versus yours.”

Osborne added that it was also important to focus on promotional dollars. ‘Too often retailers use a ‘batch and blast’ approach to try and keep revenue up, but at the expense of valuable margin that can help retailers truly thrive in a constantly changing market. Know which consumers want to buy brand new products the day they’re released, versus the ones that might need a sale or promotion to push them to purchase. Which channel, which promotion, and when to deliver it is all critical in tailoring these valuable dollars. And predict which will be great lifetime customers to make sure you acquire them and retain them. You have the data, make sure you have the tools to unlock it.”

Divya Menon, founder of brand consultancy firm Bad Brain, suggests traditional retailers taking a stab at “moment marketing” to drive sales and profits.

“Moment marketing is part timing, part context and part programmatic,” she told WWD. “It provides a brand message, at a poignant time during a consumer’s activity, in a medium that can be analytically accessed by the brand. A clean, simple example that’s applicable to traditional retailers involves location-based marketing: Dylan is searching for a ‘shoe store near me’ and Shoe Company shows up with an ad complete with location, number, and proper landing page extensions.”

Menon said moment marketing can get more complex, though. “A brand should be studying the patterns of their targets and approximating the times, locations (both on- and off-line), platforms used, interactions had and even sentiments that occur during particular, relevant activities in order to hone targeting for moment marketing,” the consultant said. “Moment marketing, also, should not supplant any larger, more broad marketing strategy. Moment marketing is an acute moment and while the ROI for moment marketing might be higher than the sales velocity of a general retargeting ad, it will likely be less frequent and won’t give you the same breadth of awareness and consideration that other forms of advertising will.”

ebbo™ is an all-in-one loyalty company. With our data driven strategy, full-service approach, and the unwavering support of the people behind the platform, our dedicated team will work with you to understand your loyalty goals, innovate solutions and help you build customer engagement on repeat.

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