In-Store IT Investigation: Microsoft
As might be expected from a retail chain that serves as an extension of a technology brand, Microsoft stores are sleek and futuristic. Store layout is open and interactive, with a wide variety of opportunities for shoppers to engage with technology. However, customer-facing technology is limited to products on display, without IT features such as self-service kiosks or electronic shelf labels that can be found at many other stores.
Interactive Promotional Display
At the mall-based Microsoft store location this reporter recently visited, the first piece of technology a prospective customer encounters is a widescreen Perceptive Pixel multi-touch display in front of the store. The display is clearly branded for the Microsoft Store and lets customers interact with digital promotions of the products and services for sale inside.
Hands-on Technology Access
Store layout is non-traditional, featuring products such as mobile phone hardware, software packages and video games behind glass cases along the walls at the rear of the store. The front two-thirds of the store consists of open workstations, each featuring a Microsoft Surface Tablet or other PC or tablet device from a Microsoft OS partner such as Samsung.
The devices allow consumers to directly engage with Microsoft software applications such as the new Windows 8 operating system and the Skype online messaging/communications client. Skype terminals also allow consumers to use headphones from hardware partners such as Skullcandy and Beats by Dre during trial sessions.
Other interactive technology features include stations where customers can engage with live demos of Xbox games toward the back of the store. The store is heavily staffed with associates known as Service Advisors who will provide basic support services and consultation for free and also offer extended services for a sliding fee scale. The ready availability of expert staff makes the basic store environment, which is geared toward a more sophisticated technology user, compatible with the needs of an IT novice.
The checkout counter for the Microsoft store is located toward the rear of the store. The retailer uses the Microsoft Dynamics AX for Retail POS system running on PC terminals. The store also offers free in-store WiFi and has a section in the back with open workstations where customers can use their own portable computing devices.
Is Loyalty Right For Your Retail Brand?
By Joe Easley, Sr. Director, Business Development & Product Strategy, Kobie Marketing
As retailers continue their quest for deepening customer engagement, they’ll often turn to a loyalty program. Yet high membership numbers are deceiving because engagement levels are actually stagnant. This poses the question, are loyalty programs right for every brand? How do brands choose the right strategy for customer engagement and the overall integration of the loyalty program within the brand?
Having loyal customers is the goal of all retailers, but that does not necessarily mean that all retailers desire loyalty programs. Oftentimes, the key decision makers can agree that they want a loyalty program, but are interested in opposing objective and definitions of success.
Many retailers engender loyalty in ways that may not be manifested in a formal program. By offering genuine connections that create optimal experience, knowledgeable staff who understand the importance of delivering great and consistent customer experience, and by using unobtrusive engagement tactics, retailers are finding that loyalty can indeed be earned in many different ways.
If a retailer does wish to engage in a loyalty program, focusing on customer and member acquisition is a great place to start. Effective loyalty programs are optimized when brands are researching and developing customer acquisition strategies with the goal of obtaining potential high value customers.
While there is value in obtaining customers and ultimately program members from varying value segments, it makes the most sense to target the very best, right from the beginning. This last aspect is absolutely critical: why spend good money going after bad? Why would a retailer continue to drive acquisition efforts that go after those who may not be or may not have the potential to ever be their best customers?
When to Implement a Loyalty Program?
For too long, retail loyalty programs have been stuck in a “me-too” mindset with most or all offering the same generic rewards, i.e., points, month-end specials, coupons or automatic discounts. This is where retailers have a great opportunity to implement something different by segmenting between tangible (points and physical rewards) and experiential, status-based rewards.
After reviewing its competition, assessing the economic and financial benefits of loyalty and making a commitment to differentiation, a retailer may believe it’s ready to develop a loyalty program. However, the retailer that chooses to include experiential types of rewards that appeal to its customer base and not only differentiate the brand and program, but the overall experience, begin to truly differentiate.
Another factor that will impact a retailer’s loyalty program implementation (and differentiation) is whether it is single-tiered, multi-tiered or integrated multi-tender. An integrated multi-tender loyalty approach can help retailers improve ROI while broadening their customer base and really increase shopper engagement and satisfaction levels. Consumers can, in one seamless experience, enroll in the loyalty program and have the option to apply for a credit product.
In contrast, retailers who choose to offer “parallel” programs (credit and non-credit) are missing the potential value to grow their card base, generate incremental behavior and optimize member satisfaction. Non-credit programs are a fit for some retailers; however they must be careful not to give away margin to already valuable members.
Applying the Five ‘Es’ Assessment to a Loyalty Program
As much as a successful loyalty program relies on quality rewards and experiences that speak to customer needs delivered on preferred channels and uses behavioral insights in a member-respecting manner, it also requires a review of what I call the “Five E’s” approach: Enterprise, Experience, Economics, Enablement and Execution.
- In terms of Enterprise, ensuring C-suite buy-in is critical. Executives must be informed about a retail brand’s loyalty culture. Ideally, they must be program knowledgeable and an inspiration for the rest of the staff.
- From an Execution perspective associates must also be trained to understand the loyalty construct, how to ask for customer enrollment and when to position the credit product.
- Regarding Economics, brands must ask themselves what they are trying to accomplish. Are they driving behaviors like bigger baskets or more trips? Or are they trying to connect emotionally with customers?
- Experience speaks to the brand-loyalty program relationship. To what extent is one an extension of the other? And how does proper loyalty manifest across all channels? Lastly, is the brand promise properly infused throughout the loyalty experience?
- Finally, Enablement means that when all the behind-the-scenes legwork is done, what is the customer experience operationally? For instance, if the business goal is to empower great experiences at the point of sale, surprise and delight or great earn and burn scenarios can’t slow that experience down.
By utilizing the Five E’s approach during the evaluation stage, retailers can determine their loyalty program readiness and make informed decisions that will maximize member engagement and ROI, for the long haul.
Webinar Today: Creating the Ultimate Customer Experience
New York — As more dollars are spent online and consumers become savvier in product knowledge and comparison shopping, retailers must rethink their customer experience strategies.
Chain Store Age’s Webinar, “Creating the Ultimate Experience: Research Shows How to Increase Customer Loyalty,” will provide insight into how retailers can capture more revenue through a consistent and well-executed customer experience. Webinar attendees will receive a complimentary research report detailing the full research findings.
Thursday, September 26, at 2 p.m. (EDT). Register here.