Winning at Retail
Online retailers attract a lot of attention, but the message coming out of the latest Future Stores conference in Seattle is that physical stores still do the heavy lifting. According to Shopify, 82 percent of all shopping happens in-store. This is great news for bricks and mortar retailers, but this doesn’t mean they can continue to do business as usual.
At the conference, retailers stressed the importance of creating memorable and relevant customer experiences that are consistent across all channels, but they note it can be challenging to execute. Increasingly, retailers are discovering that they need the right data to deliver that 360° customer experience.
Here are some of the highlights from the conference:
1. Create memorable experiences
In one session, a venture capital firm asked a room full of retail executives a great question: What would you need to do to be able to charge admission to one of your stores? The question reminded retailers that they are not merely selling products; they are selling an experience, which in some cases can be another revenue source. According to venture capital firm GGV Capital, Winky Lux is one of the better companies at offering its customers an immersive experience.
Winky Lux is a cosmetics retailer that has carefully designed its stores to serve up camera-ready Instagram moments. The theme-based rooms within Winky Lux stores have become hot spots for bachelorette parties and other community events. Consumers have to buy a ticket to enter, which comes with a voucher for product purchase. This approach only works because Winky Lux has a strong connection with its customers and delivers a consistent message with relevant creative, offerings and experiences across all touchpoints.
Some mall operators are taking a similar approach to help create their own memorable experiences. At the conference, one mall explained how it worked with competitive retailers such as Lululemon, Fabletics and Athleta—who share a similar target audience—to co-host community yoga classes. The mall also collaborated with a juice retailer and a coffee shop that target similar customers to create a holistic experience that would drive more like-minded traffic to the mall.
To find the right event or experience that will drive engagement for a specific segment of customers, retailers need to link their data with a segmentation system to gain valuable insights. An established segmentation system will help retailers learn more about their customers’ demographics, lifestyles, shopping preferences and psychographics, which will help them to deliver relevant messaging and identify potential partnerships. When retailers don’t have customer data, advancements in mobile location analytics open up a range of new opportunities for retailers to gain new insights into their visitors and their competitors’ visitors.
2. Up your service game
Trendy fashion and cosmetics retailers aren’t the only ones looking to make a stronger emotional connection with customers. At the conference, Walgreens explained how they are enhancing their beauty offerings and hiring highly educated beauty consultants who can personalize the services that they offer. Walgreens is even taking steps to use their beauty and pharmacy teams in new and unexpected ways, including a unique service that caters to cancer patients. In this expanded role, Walgreen’s staff are able to offer thoughtful and uplifting experiences to help these customers during a difficult time in their lives.
3. Make shopping in store more convenient
Buy online, pick up in-store, custom tailoring, personal stylists and 24/7 help are just some of the services Nordstrom has been adding to make the lives of its customers easier. The retailer notes that customers who receive personalized experiences will spend anywhere from two to three times more at Nordstrom than their typical consumer.
Improving the customer experience is also a big part of Indochino’s strategy. Indochino’s CEO, Drew Green, explained how when the company moved from being online only to online and bricks and mortar, that pivoted them from a transaction-based approach to one more focused on creating experiences in-store. As a result, the company cut the cost of acquisition in half.
To deepen these one-to-one relationships and personalize the customer experience, retailers must ensure that they enhance their customer databases with third-party data insights to provide a complete view of their customer. The result is the ability to identify which target audiences prefer certain types of experience and how to personalize the content and messaging.
4. Respect consumer privacy
Amazon continues to be a hot topic, with several speakers noting the online juggernaut is becoming more of a data company than a retailer. To remain competitive, other retailers must also become more data-driven. While this is the right direction, retailers need to be mindful of consumer privacy issues. Gone are the days when consumers will provide information without an explicit benefit and, of course, data security is becoming a larger issue.
As retailers look to the future, having a 360° view of the customer is only becoming more of an imperative. Start with the consumer, capture relevant customer data and enhance it with best in class third-party data. Leverage the insights to create exceptional customer experiences that deepen the emotional connection with your brand. Retailers that win will be those who understand the consumer and provide them with great service and an exceptional experience based on their needs.
Tracey Matchett is a Group Account Director for the retail sector with Environics Analytics, helping organizations of all sizes leverage data and analytics to achieve their business objectives.