Focus on: Mystery Shopping
Mystery shopper reports served as a wake-up call to Kroger’s 131-store Fred Meyer division.
In 2009, Fred Meyer stores scored a meager 68.3% in overall customer impression in the reports. But over the past three years, the number has jumped to 83.8%, according to data provided by Reality Check of Seattle, the retailer’s secret shopper service provider.
A key reason for the increase has been a renewed focus on customer service, which makes greeting and acknowledging shoppers a top priority ahead of stocking and non-interactive tasks. The training and operations areas put more energy behind getting information directly to stores. The improvement has been so great that in one of the most important measurements — ‘Would you recommend this store to a friend?’ — Fred Meyer currently earns an 86% ‘definitely’ compared with a 47% ‘definitely’ in 2009.
Connecting with the consumer has become more important as shopping options have grown, according to Ross Thomas, president of Reality Check. And for Portland, Ore.-based Fred Meyer, whose stores feature grocery along with multiple other departments such as home improvement, jewelry and apparel, a good rapport is necessary. This retailer, Thomas said, “is tied to the community and seen as its local store.”
In data collected from 17,129 shoppers across its multiple grocery retail clients, Reality Check found that good customer service is crucial if you don’t want negative word of mouth. Even though when recommending a store the survey found the most important reason is price at 32.28% followed closely by service at 31.43%, the top reason for NOT recommending a store far and away is service at 73% with price only 9.78%.
ROCHE: At Roche Bros., an 18-store upscale supermarket chain in Wellesley Hills, Mass., mystery shopping is a way to monitor and ensure the effectiveness of its long-standing programs. According to Maribeth Grant, customer service merchandiser, the company takes a “Golden Rule” approach to shoppers.
“We use [mystery shopping] as a tool to help us maintain the leadership [in good customer service]. The principles of treating others the way you want to be treated is so fundamental to who we are,” she said. Grant added that Roche holds training classes, offers department mentorship programs and also sends employees to Dale Carnegie courses.
“We consistently give associates feedback, and they are definitely aware that the stores are shopped. It helps associates know they have to be on the game all the time,” said Grant, who noted when the results arrive they are immediately emailed to the store manager. “They are published in the store, and people are recognized for the services they are doing, such as a $5 reward or letter from the president.”
Judi Hess, president of Customer Perspectives, of Hooksett, N.H., which provides the service to Roche, said that Roche has mystery shopper visits once per month, per store, with the reviewer required to visit at least four of its departments and “sometimes as many as eight” per trip.
“What doesn’t get measured doesn’t get done,” Hess said. “Retailers are much more aware now of how customer service drives consumer loyalty and the ROI on it.”
The BIG Show Is Back
With an eye on expansion, both from customer engagement and operational perspectives, retailers are eager to revitalize their brands and overall shopping experiences, according to industry experts. The upcoming 102nd annual NRF Convention & EXPO, produced by The National Retail Federation, Washington, D.C., promises to educate attendees on these and other business strategies.
The event, known throughout the industry as “Retail’s BIG Show,” will set up shop at the Jacob K. Javits Center, in New York City, Jan. 13 to 16, 2013. NRF reported a record attendance of 25,500 domestic and international delegates, comprised of retail executives, vendors and consultants last year, and “we are expecting an increase at this year’s show,” said Eric Olson, VP education strategies, NRF.
Olson credits part of this increase to an ever-growing delegation of international executives, especially those from Mexico, South America, South Africa, even as far away as Australia.
“NRF Annual is truly a worldwide-known event for retailers, and they all attend in hopes of learning what will be the next generation of retail innovation,” Olson said.
A common area of interest for all attendees, both domestic and abroad, is how to expand business into new areas and then localize operations on this new turf. Specifically, NRF reported that international expansion and operating in emerging markets, including Brazil, China and India, is one of two key retail growth drivers.
“Retailers, such as Nordstrom and others, have made international expansion part of their business model, and others are interested in learning how this can help propel business moving forward,” Olson explained.
To help retailers understand the importance of this path, NRF is dedicating at least eight sessions to the topic, including “Emerging Consumers from Emerging Markets: The New Retail Frontier” and “What Will it Take to Thrive in the Global Arena?”
The other growth driver is the proliferation of digital technology steering the omni-channel experience both inside and outside of the store. Add in consumers’ smart device adoption, and retailers finally have a way to localize conversations, promotions and pricing to build loyalty in the slowly recovering economy.
“Digital solutions are what retailers need to revitalize the store experience, especially as more millennials enter the marketplace,” Olson said. “One session that illustrates this will be ‘Retail Re-imagined – Conversations on Storytelling, the Customer Experience and What’s Next!,’ a 20-minute presentation that talks about how to use dynamic ideas to turn retail on its head and inject new life into the consumer experience.”
Before delving into these sessions and other retail tracks, NRF will set the tone of the conference with keynote sessions that provide insight into how the global economy is impacting the retail industry. For example, Monday’s keynote speaker, Kofi Annan, secretary-general, United Nations, will discuss the “Building Strong Nations: The Pillars to a Prosperous Society.”
“The discussion will focus on diplomacy and retail’s role in the larger global economy across emerging markets,” Olson said. “We are excited to hear his perspective and learn about the impact retail has on the global economy.”
On Tuesday, Bill Simon, president and CEO of Wal-Mart U.S., will present “A Job to Do: Retail’s Role in an American Renewal,” discussing how retailers must lead based on the big issues that matter to customers and communities, such as the economy and job creation.
“Retail is the engine for this country’s economic recovery, and we’re eager to hear about how Wal-Mart is fulfilling that role and how other retailers can play their part in America’s renewal,” NRF president and CEO Matthew Shay said in a statement.
Besides joining these keynotes and other sessions within the show’s extensive educational agenda, NRF encourages attendees to delve deeper into industry issues “during meetings on the show’s EXPO floor as well as through networking,” Olson said.
Loyalty programs may be commonplace across the retail industry, but few are capable of rewarding members on a personal level. Société de transport de Montréal (STM) may not be a retailer, but retail chains can learn a valuable lesson from how the transportation company rewards individual consumers for their loyalty.
In Montreal, 65% of the population uses public transportation when headed to downtown destinations. While STM is interested in driving revenue, it is even more interested in increasing its ridership. Looking to increase its ridership between 3% and 5% annually, the transportation company decided to see if a new loyalty program would help it to achieve its goal. Leery that a traditional card- or points-based program would be costly from both internal operations and customer engagement perspectives, however, STM is preparing to launch a mobile loyalty program by February.
“For us, the program is a way to deliver value as a means of retaining our loyal riders and also recognizing their loyalty,” said Pierre Bourbonnière, director of marketing, STM. “We plan on getting to know customers by gaining a better understanding of their preferences and behavior.”
STM manages fares through “OPUS” transit smart cards that can be loaded at one of 200 fare vending machines. The smart card, which can be used across the Montreal subway and bus system for up to four years, stores all purchased fares as well as riders’ personal information, including email addresses. Currently, there are 3 million OPUS cards in circulation. One million of these cards are active.
Approximately 20,000 OPUS cardholders are being invited via personalized emails and station-based advertising to join the mobile loyalty program by downloading a dedicated app. Once downloaded, riders are prompted to input their specific preferences, such as their interest in sporting events, cultural arts, restaurants and other hobbies. STM will exploit these details with the help of longtime technology partner, SAP.
By leveraging SAP’s CRM (customer relationship management) solution and a combined business intelligence tool, STM can delve into OPUS rider histories and preferences. Once that is done, Bourbonnière said, “We will create and deliver personalized, geo-localized offers from STM, as well as across more than 1,000 business partners.”
As riders launch the mobile app, they receive notifications about available rewards from business partners, including the Opera de Montreal, promoters of local events, as well as approximately 125 retailers, ranging from IGA to Tim Horton Coffee to local liquor stores. While riders can scroll through approximately 125 standard offers daily, what makes the program unique is STM’s ability to segment geo-localized promotions.
“Geo-localized promotions are based on individual’s demographics, entered preferences and our ability to offer them relevant offers in real time,” Bourbonnière said. “The key to success is offering the right individual the right offer at the right time. That formula is what makes this an extremely unique program.”
For example, IGA, STM’s grocery retail partner, may send a message asking, “Have you thought about supper? If you check in within the next hour, here is a special offer on our new arrival of oysters.”
“It may also offer free delivery to riders knowing they cannot carry a bagful of groceries,” Bourbonnière explained. “They can check in at home, and IGA can deliver the order.”
STM plans to initially launch the program among iPhone users and then will expand it to Android devices.
“The objective of the program is to follow the behavior of our riders, understand their preferences and then exploit our CRM solution to communicate with them and deliver promotions that they can benefit from,” Bourbonnière said. “Our overall challenge will be keeping up the excitement and momentum, but we are eager to be successful and deliver something innovative.”