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Mobile Devices Provide Effective Customer Data Channel

BY Dan Berthiaume

Retailers should take advantage of the constant availability of data created by near-ubiquitous mobile penetration among consumers, advised Michael Olmstead, director, Plug and Play Retail, a Silicon Valley-based global start-up accelerator and investor.

“Our generation has a constant in-flow of information, much of which we receive on our mobile electronics,” said Olmstead. “From text messages and emails to world news to discounts on stores and restaurants, nearly all information is readily available and easily attained.”

In recent years, many retailers have realized the importance of mobile technology and have begun to implement it to more effectively target customers, he added.

“The ability to instantly send out time-, product- and location-sensitive retailer information to a tailored group of consumers is an aspect of mobile technology that can bring more attention to retailer activity,” Olmstead said. “This will establish a better retailer-consumer relationship by boosting both sales and consumer satisfaction.”

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Loyalty on the Go

BY Dan Berthiaume

Fast-growing footwear retailer Rack Room Shoes has always had a good grasp on its customers and their wants and needs. However, the retailer never began building a formal loyalty plan until the first quarter of 2012, which actually created an advantage.

“We have a good, loyal base of predominantly moms,” said Jan Mauldin, director of corporate marketing, Rack Room, Charlotte, North Carolina, which operates 390 stores. “We wanted to better understand their behaviors and shopping preferences. They won’t buy what they don’t care about.”

Realizing there was lack of a loyalty skillset in-house, Rack Room contracted with Denver-based CRM marketing agency Customer Communications Group Inc. (CCG) to help develop the necessary solutions and knowledge base necessary to support a top-quality loyalty program. Rack Room’s existing CRM program was supported by a homegrown customer database and primarily used email communication with customers.

“We had a unique ability to launch a loyalty program from a digital and mobile perspective, because there was no existing infrastructure to worry about,” Mauldin said.

CG provided expert personnel and data management services, and also connected Rack Room with SmartButton, a third-party provider of a Microsoft SQL-based database, to track loyalty dollars and points. The resulting loyalty program, launched in April 2013, is completely based on mobile technology from the consumer standpoint

“There are no loyalty cards,” explained Mauldin. “You sign up on a microsite with your email, which is easy and fast. Your email address is your membership number. Enrollment has far exceeded our projections and is now more than 2 million members.

Getting Personal: Rack Room automatically tracks customer spending, and will send customers a reminder message when they are close to obtaining a loyalty reward to encourage further purchases. The retailer is currently classifying customers into about 10 to 15 segments based on such behaviors as frequency of visits and spending totals, and designing specific strategies for each.

“If a person mostly shops clearance, we want to encourage them to shop more than clearance,” Mauldin said.

Looking ahead, Rack Room plans to take over all data management and analysis from CCG by the end of 2015. In addition, the retailer wants to take advantage of the unique capabilities of mobile technology in several ways.

“We’d eventually like to do real-time, one-to-one communications,” Mauldin added. “We’re testing some geotargeting now, pinging members when they’re in the mall and near the store. As we get our member base larger, we get smarter.”

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PCI Compliance Is a Holistic Effort

BY Dan Berthiaume

Bob Russo, general manager, PCI Security Standards Council, offers the following advice about complying with PCI Data Security Standards, including the upcoming October 2015 deadline for U.S. retailers to accept cards with Europay, MasterCard, Visa (EMV)-compliant chips.

No Single Security Solution: “As evidenced by recent high-profile breach incidents, keeping payment data secure in today’s world is an increasingly complex challenge,” explained Russo. “While EMV chip implementation solves one part of the problem, there’s no single solution that addresses all security challenges. For example, the EMV chip is not intended to protect the ever-growing part of our global economy that conducts business online. Increasing security and reducing fraud requires a layered approach to security.”

Consider Whole Payment Infrastructure: EMV chips provide excellent protection against fraud in a face-to-face environment, according to Russo.

“But in preparing for migration to the EMV chip, multichannel organizations need to consider their entire payment infrastructure, not just brick-and-mortar, and specifically e-commerce environments,” he said. “EMV chip migration is a great opportunity to look at overall terminal security, and for retailers to invest in a terminal that meets various
security standards and needs.”

Stay Vigilant: Organizations with security controls in place as part of complying with PCI Security Standards improve their chances, both of avoiding a breach in the first place, and of minimizing the resulting damage if they are breached.

“These findings, coupled with recent breach incidents, highlight the need for businesses to build security into their ‘business as usual’ practices,” Russo said. “In the case of PCI Standards, that is especially important that this does not become a once-a-year event, when a compliance assessment is due, but rather is a daily occurrence.”

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