News

Customer Loyalty Elusive, but More Important Than Ever

Customer loyalty is becoming harder for retailers to earn, and even harder to keep. 


An Accenture survey of more than 5,800 consumers in 17 countries about their experiences with 10 industries found that only 20% of consumers feel loyal to the retailers they do business with. Overall, satisfaction was down in each of the 11 different categories of service that consumers were asked about in the Accenture Global Consumer Survey. From the innovation of technology to the volatility in prices to the evolution of store format, the challenges are building but show the immediate need for retailers to transform loyalty from beyond just rewards to a customized, two-way dialogue that reaches all parts of the customer experience. 


Retailers and consumer goods companies start off at a disadvantage, as consumers find it inherently easier to switch stores and brands than to switch other service providers, such as insurers, banks or wireless companies. In fact, retailers experienced the highest rate of switching among service providers last year, with 17% of consumers saying they stopped doing business with a retailer altogether and switched to another.


While it is easy for customers to switch from one store or brand to another, retailers have historically experienced more success than other industries leveraging loyalty programs. The survey showed that participation in retail loyalty programs grew from 45% in 2009 to 52% in 2010, and the percentage of retail customers who were persuaded to remain a customer as a result of loyalty programs increased from 49% in 2009 to 54% in 2010.


Loyalty programs have become an essential tool for building and retaining consumer engagement with retailers. However, you cannot rely on loyalty programs alone. Loyalty is an outcome achieved when retailers deliver against customer expectations at each and every customer experience touchpoint; it’s not simply about the program. 


The survey research and industry experience indicates > that retailers must address the issue of customer loyalty on three fronts simultaneously: 


1. Obtain deeper insight into customer thinking. Through effective analytics, retailers can gain a better understanding of what matters most to customers in their purchase and research decisions. This knowledge can be used to help meet the needs of different types of customers and forge stronger relationships.


2. Make better use of technology. Retailers can still do more to improve the coordination and effectiveness of their email advertisements, online banners, online ordering and personalized offers. More than three-quarters of consumers (77%) say that the increased use of technology has improved their experience in choosing providers, but consumers want the digital experience and the in-store experience to be consistent.


3. Increase customer satisfaction levels. Many store chains need to increase their investment in employee training, as customers are most satisfied with being able to deal with employees who are polite, friendly and knowledgeable, and also do not want to wait to be served. 


While price will always be an issue, consumers’ low satisfaction levels give retailers an important opportunity to differentiate themselves from their competitors. They can do this by improving service, making better use of technology, creating and maintaining effective loyalty programs, and getting “inside the customer’s head” to identify the best ways to build loyalty, increase engagement and turn satisfied customers into active advocates for their stores.


Chris Donnelly is a senior executive in Accenture’s Retail practice and the management consulting lead for retail in North America. Dawn Palmer is a senior executive in Accenture’s Customer Relationship Management practice who focuses on solutions for the retail industry. Accenture is a global management consulting, technology services and outsourcing company.


keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Are you hiring seasonal employees this year?

View Results

Loading ... Loading ...
News

Focus on: Social Media


BY CSA STAFF

As merchants big and small still try to figure out how to best use Facebook, a few major trends have surfaced, including some that could potentially shape the future of e-commerce. 


One of the fastest-growing trends among retailers on Facebook is also the most simple: posting contests and promotions. In fact, Walmart’s Facebook site grew by 1 million “fans” in the first quarter of 2011 by running contests and offering deals.


“The quality and number of Facebook fans a retailer attracts is critical because it puts companies in position to push out promotions, product deals and information to their core audience,” said Susan A. McKenna, CEO of Winnetka, Calif.-based social media firm McKenna’s Marketing. 


Big-box merchants aren’t the only ones leveraging this strategy. Edison, N.J.-based Abe’s of Maine, an electronics and camera multichannel retailer with an online store and a bricks-and-mortar location in its hometown, is adding an abundance of new Facebook fans, thanks to a series of contests it launched as a part of an effort to boost its follower base. 


Building on its camera-centric product focus, the company encourages its Facebook fans to upload creative pictures to its page and write captions/comments to win prizes, such as digital cameras. Avi Blumenstein, the online market manager for Abe’s of Maine, said this tactic has proved extremely valuable.


“Since we are a smaller retailer, there have been challenges in growing our Facebook fan base,” Blumenstein explained. “But, we have had a lot of success with giving shoppers an incentive to ‘like’ us on Facebook through contests, and people have been sending them to friends, so more consumers are learning about our brand and interacting with us.” 


Abe’s of Maine is also incorporating Facebook into its online reviews, which are run by PowerReviews, a San Francisco-based social commerce solutions company. When the retailer prompts shoppers to submit a review, people can share it with others on Facebook by posting it to their wall. 


CUSTOM: Another growing Facebook trend is custom-designed welcome pages. 


“Since Facebook is phasing out its former FBML (Facebook Markup Language) in lieu of more detailed JavaScript and XML-enabled code base, pages will have a lot more functionality in the months to come,” McKenna said. 


This means that Facebook members will be arriving at beautiful, custom-designed pages that serve as a second homepage and act more as a gateway to e-commerce sites. 1-800-Flowers and Pizza Hut are already doing this, with fan pages that allow users to place orders directly from Facebook. 


Merchants such as Best Buy, Old Navy and Urban Outfitters are also featuring products on Facebook with a “Buy Now” button that sends users to the product page on the brand’s site to make a purchase. This trend is becoming increasingly popular among those who shop the Web. 


According to a recent report by Portland, Ore.-based Webtrends, Facebook stores now have the same sales conversion rates as e-commerce sites, and they are “efficient at acquiring visitors cheaply” through wall posts that promote products.


Wall posts tend to generate on average 1,673% spikes in Web store traffic, the report said, and the average order value coming from Facebook is around $104, with 24% growth month over month.


“[There is] a gradual shift in traffic from a brand’s website to its Facebook page, hence the need for marketers to closely measure their Facebook activity,” the report said.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Are you hiring seasonal employees this year?

View Results

Loading ... Loading ...
News

Better Management

BY Deena Amato-mccoy

It’s no secret: When the Great Recession hit in the fall of 2008, retailers sustained a serious blow in the form of sharply declining consumer demand. Privately held apparel retailer Bob’s Stores was no exception.


“For us, the slowdown had a significant impact on our inventory movement,” said Victor D’Amato, VP planning and analysis, Bob’s Stores, Meriden, Conn., which operates 34 stores in the Northeast.


Prior to the economic downturn, Bob’s had started to embark on an inventory reduction strategy to improve its gross margin. The recession intensified the importance of the project. 


Sales projections for 2009 and beyond were dismal. Plus, the chain was facing a host of uncontrollable factors, including the rising cost of cotton and wholesale partners that were pulling back on orders or canceling them altogether. It became clear that if the chain wanted to continue serving its shoppers, Bob’s needed to transition away from costly advanced orders to more targeted weekly and just-in-time orders — a process that also required the company to rethink the way it was stockpiling inventory.


“A high level of holding stock was costing us working capital and reducing turns,” D’Amato recalled. “To be successful in this new sales environment, we knew we needed to lower on-hand merchandise, and better manage our inventory to match consumer demand. To do so, we needed help from better solutions.”


The retailer was supporting an outdated legacy system that had limited functionality when presenting users with forecasting data. It was not uncommon for the chain to create inventory orders without knowledge of on-hand stock.


“We used Excel spreadsheets to manually calculate our available safety stock, then added our calculations into the system to improve the next order decisions,” D’Amato said.


Bob’s wanted a solution that could account for promotions, seasonality and other events that impact demand. It also had to take into account a large volume of SKUs and store planning combinations.


“The ideal system needed to analyze the product hierarchy and aggregate a sales forecast based on consumer demand and merchandise performance,” D’Amato said. “It also needed to be affordable and provide a return on investment.”


That solution was a cloud-based demand forecasting management system from JustEnough Software, Newport Beach, Calif. Bob’s launched it in 2009, with an initial goal to eliminate the burdens caused by its safety stock. 


As users launch the software-as-a-service application via desktop or laptop, the solution uses pre-established inventory policies, such as existing safety stock levels, service levels and demand, and then generates an inventory forecast around these details. 


Since adding the solution, Bob’s has slashed its holding stock by 16% and reduced its average in-store stock levels by 9%. “Even with the reduced stock, we did not sacrifice sales, turns or gross margin,” D’Amato said.


Based on the solution’s cost-effective configuration, Bob’s expects to see a return on its investment within a year. Since the solution is a secure, Web-based system accessed via a Web browser, the company didn’t need to purchase, install and run software in-house. A SaaS-based solution also eliminates the burden and expense of software maintenance or running a proprietary server infrastructure.


At presstime, the chain was completing the second phase of the technology deployment, which included completely transitioning off of its legacy system and managing its enterprise-wide forecasting and replenishment processes through JustEnough. 


Once it is supporting the entire enterprise, Bob’s plans to apply it to inventory held at the distribution center and remove safety stock from the back room of the store.


“The goal is to reduce our network inventory,” D’Amato said. “We believe carrying a limited supply of inventory will save us capital, and we will still be able to service our shoppers by having more accurate assortments, such as sizes and styles, based on their demand and purchase behavior.”


keyboard_arrow_downCOMMENTS

Leave a Reply

R.Advocate says:
Apr-16-2013 05:06 am

It's good that D'amato find a new way how to manage things. Int his way it will be more effective. And it will be more easy to find buyer's. -Casa Sandoval

R.Advocate says:
Apr-16-2013 02:53 am

Its good that D'amato find a new way for a better management. It's amazing to imagine to think he find a way like that. I like D'amato thinks. -[4/14/2013 6:49:35 PM] Raquel Caytuna: Scott Sohr

R.Advocate says:
Apr-16-2013 05:06 am

It's good that D'amato find a new way how to manage things. Int his way it will be more effective. And it will be more easy to find buyer's. -Casa Sandoval

R.Advocate says:
Apr-16-2013 02:53 am

Its good that D'amato find a new way for a better management. It's amazing to imagine to think he find a way like that. I like D'amato thinks. -[4/14/2013 6:49:35 PM] Raquel Caytuna: Scott Sohr

Y.Hendriyanto says:
Jan-28-2013 02:12 am

Bank Mandiri Bank Terbaik di Indonesia have to manage your finances well.

Y.Hendriyanto says:
Jan-28-2013 02:12 am

Bank Mandiri Bank Terbaik di Indonesia have to manage your finances well.

K.Perro says:
Jan-22-2013 03:13 pm

I would like to read more about this because I am really interested in the subject. Thanks! Waiting for updates!

K.Perro says:
Jan-22-2013 03:08 pm

I like how D'Amato thinks. I hope that things will go as you expect. Good luck! Best wishes from Lavrion!

K.Perro says:
Jan-22-2013 03:13 pm

I would like to read more about this because I am really interested in the subject. Thanks! Waiting for updates!

K.Perro says:
Jan-22-2013 03:08 pm

I like how D'Amato thinks. I hope that things will go as you expect. Good luck! Best wishes from Lavrion!

TRENDING STORIES

Polls

Are you hiring seasonal employees this year?

View Results

Loading ... Loading ...