Customer Experience, Loyalty Programs, and Data at CRMC 2017
It’s common to hear the claim that we’re currently facing the worst period in history for retailers. CRMC 2017 tackled this notion of the “retail apocalypse” head on at their event earlier this month, hosting sessions on customer experience, loyalty programs, the importance of data, and more.
While it wasn’t said outright, it seemed to me like the unspoken mission on everyone’s mind was, “How do we keep Amazon from taking over everything?” Considering we just saw the ecommerce giant make a serious move into a new space by purchasing Whole Foods, plus the overall trend from brick-and-mortar to digital, it’s a valid question concerning the future of the retail industry. And there’s one excellent—albeit complex—answer: Customer experience.
AMAZON, 1998: hello we sell books but online
AMAZON, 2023: please return to your Primehouse for your nightly Primemeal, valued Primecitizen
— KRANG T. NELSON (@KrangTNelson) June 16, 2017
MORE THAN A STORE
The most prominent message from the conference was to stop thinking of stores as just a place where you sell things. Instead, consider them an opportunity to provide an experience. Several speakers agreed that the future of retailers is to provide an immersive experience to patrons, connecting a consumer’s physical presence in a store with their online history and all digital channels to offer a personalized, seamless, and memorable experience with your brand. But… how?
The strategy in developing a differentiated and effective customer experience is multifaceted. Ultimately, it begins with a broader concept—your culture, brand, voice, mission, vision, values—and ends with execution—the technical tools to achieve personalized, relevant communication with your customers in real-time. Thanks to the “retail apocalypse,” retailers are beginning to realize that they must examine a much bigger picture than the storefront to continue to compete in the market of the empowered consumer.
CRMC sparked discussion regarding numerous tactics to create the best possible in-store customer experience, including:
- Collocating with a complementary brand
- Using virtual and/or augmented realities
- Redesigning traditional stores as new gathering forums for people with shared interests
- Mobile checkout
- Robust consulting capabilities, like custom fitting
Naturally, some changes will come more quickly and easily than others, but what each of these suggestions have in common is that an online-only ecommerce player simply cannot compete with a brick-and-mortar retailer for these experiences. This is precisely why customer experience is so essential. So, how did we get here?
MILLENNIALS WANT EXPERIENCES
Versus Baby Boomers, 72% of Millennials prefer to spend money on experiences rather than material possessions. Many retailers look at these findings with defeat, wondering how they’ll possibly sell products to a generation that doesn’t seem interested, but they’re missing the point—Millennials still consume, they just consume differently.
Led most prominently by Gen Y (Millennials), Gen X (Baby Boomers) are quickly following the trend of digital adoption, desire for speed and convenience, demand for personalization, and more. Gen Z is emerging with these traits already deeply ingrained, and we’ll see what they and future generations have in store for retail in the coming years.
To sell a product today, retailers must first focus on customer experience. Through this attention to developing a two-way relationship, younger generations develop a connection with brands and become loyal customers.
POSITIVE EXPERIENCES LEAD TO LOYALTY
To capitalize on these loyal customers, many presentations covered loyalty programs. Even for established companies, creating an effective loyalty program is notoriously challenging. Many speakers touched on the fact that their programs were still in their infancy, with a few seeing recent reinvigoration. This uptick is thanks to retail marketers seeing the potential value that loyalty programs could offer their companies; from building stronger relationships with consumers, to rewarding high-value customers with discounts, to increasing brand awareness and frequency of contact, to encouraging a feeling of exclusivity amongst members, and more. But most important of all? Loyalty programs are a window into a wealth of data.
LOYALTY MEANS RICHER DATA
Loyalty programs provide a gold mine of data that allows retailers to better understand their customer base. Various metrics can be matched with demographics or psychographics to aide with personalization and relevancy in marketing. Nearly every CRMC speaker who discussed loyalty programs confirmed that the initiative had a significant impact on how their organization consumes and uses data; for most, true analytics has begun to command real budget and management attention, which spells good news for customer experience efforts.
In particular, representatives’ approach to segmentation changed due to the increased availability of information. With purchase history, channel preferences, third-party demographic data, and more, retailers can refine customer segments to be more precise with messaging, resulting in an improved customer experience, in turn resulting in a financial win for the company.
Susan Rodgers, Vice President of Marketing, CRM & Analytics at Pier 1 Imports, put it perfectly: “Data matters, but relevant data that tells a story and can inspire is the data that matters the most.”
RETAIL MUST ADAPT
No matter the size of the company, all the CRMC speakers had at least one trait in common: Constant evolution. In order to keep up in this fast-paced, customer-centric era, retailers must regularly assess and adapt their approach customer experience, including loyalty programs and data analytics. This year’s CRMC was insightful, and I predict that next year’s conference will advance into new issues for the retail industry that have yet to arise. As change continues to come, retailers must continue to be proactive rather than reactive to stay in the game.In fact, it’s just the right time for the traditional marketer to become an Adaptive Marketer™.
Learn more about the Alterian Adaptive Customer Experience™ Platform today.