Jill Standish
TECHNOLOGY

Retail with purpose: The new digital economy demands an emotional bond with customers

BY Jill Standish

What is the purpose of your business? If you are a retailer and your immediate answer is “to sell more products,” you may find times getting tougher in the months and years ahead.

To survive and prosper in the new digital economy, the leading retailers are thinking more profoundly. In practice, this means identifying their purpose – the role they play in the lives of customers, both practically and emotionally.

An existential threat
The danger of the new economy for traditional retailers is not simply slower sales or declining profitability. Instead, the threat is existential.

Online-only retailers saw their share of Christmas shoppers rise by almost 16% in 2016; department stores, meanwhile, lost more than 6% of sales. Bankruptcies and store closures are increasingly common, and even the biggest names are not immune.

If they have not already done so, retailers should take findings such as these as their cue to start thinking differently – and many are starting by focusing on what they stand for.

What do we mean by this? For some time, retailers have sought to manage their reputations, project a positive brand image and enthuse their employees. These days, however, such strategies may no longer be enough. Now, retailers need to consider their very right to exist: what is it that only your brand can give consumers? Answer this question, and the way forward becomes clearer.

Refocus on what makes your brand unique
So how can retailers differentiate themselves and stand out in today’s crowded marketplace? In our view, it requires a radical shift in approach. Consumers today do not want to merely buy from you, they want to buy into you. This means ensuring that the very essence of your brand is communicated to the consumer every time they experience you – from store employees to social media.

Consumers want to connect with your brand in their communities. Becoming relevant therefore means operating locally and ensuring that the brand promise is well known and understood by local consumers. Those with this kind of relationship with their customers will be able to adapt as consumers’ needs change. We call these brands “living brands” – they evolve according to the behaviours of stakeholders, staying true to their roots to retain authenticity but flexible enough to adapt.

Refocus human capital on what matters
This kind of radical change is likely to lead to a rethink in the way you work – including how your organization is structured and the use of technology. The leading retailers will rethink their use of human capital: roles that are standardized are likely to be automated by artificial intelligence, leaving to employees the strategic roles that matter most to consumers.

In addition, today’s enormity of data demands that retailers use analytics to aid the employee rather than leaving insights to chance. Modern tools and automated processes will not be enough to attract and maintain the right talent; to compete, retailers need to think about what draws employees to their brand. Like consumers, employees are increasingly interested in the purpose of organizations: they want to work for a business with integrity that knows what it is best at and what impact it is having on the lives of others.

Read between the lines of these capabilities, and it becomes clear that most retailers will no longer be able to do everything themselves. Instead, industry leaders are thinking about new partnerships – plugging into networks of digital partners big and small, and using data and analytics to maximize their own agility.

Rising to the challenges of the new economy will not be easy. But the data is showing us that the consequences of being a retail traditionalist could be dire: brands that do not evolve face more than decline; they face extinction.

It does not have to be this way. There is a huge prize for retailers that identify their purpose, organize around experiences, make use of advanced technology, focus on being local and personal, reconsider their structure and reimagine their processes. Get this right, and you can focus on what truly matters to the consumer and make them fall in love with you all over again.

 

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TECHNOLOGY

Walmart aims to make merchandise returns a 35-second process

BY Deena M. Amato-McCoy

A discount giant has just made a big move in its returns process.

Eager to streamline the often frustrating task of merchandise returns, Walmart will introduce Mobile Express Returns. Starting Nov. 9, the new service will enable online customers to use the Walmart app to begin the returns process — before even heading to their local store.

Here’s how it works: Customers follow prompts on the Walmart app to find their transaction and pinpoint the merchandise they want to return. Once completed, they can go to their local Walmart store, and enter the Mobile Express Lane.

Here, they scan a QR code displayed on their Walmart app directly onto on a dedicated card reader. The refund is credited back to the shopper’s payment account by the next day, according to Walmart.

The returns process, which the company estimates will take 35 seconds or less, can be completed across Walmart’s more than 4,700 locations.

The discount giant plans to streamline the process even further in December, when it enables customers to instantly receive their refund without even making a trip to the store to physically return the item. This service will initially be available on select household items, such as shampoo and color cosmetics, and others items to be added over time, Walmart said.

“We know that returning an item and waiting for a refund, especially for a product purchased online, isn’t always seamless, so we’ve completely transformed the process for our customers – whether they are shopping in stores or at Walmart.com,” said Daniel Eckert, senior VP, Walmart services and digital acceleration, Walmart U.S. “By leveraging our physical stores and the Walmart app, we’re changing the returns game in ways that only Walmart can do.”

To ensure that shoppers don’t abuse the system and keep merchandise they have already been reimbursed for, the discounter has invested in technology to make sure the service isn’t exploited and even detect shoppers who might be abusing the privilege, according to The Street.

Looking ahead, store purchases will be integrated into the program in early 2018. The company is also creating a similar streamlined returns process for items sold by third-party sellers on Walmart.com, according to the discounter.

The new returns program sends a message to online rival Amazon, which recently partnered with Kohl’s to streamline its own returns process. While the department store retailer began accepting Amazon returns this month, the service is only available in 82 Kohl’s stores in Los Angeles and Chicago.

“Walmart, with Marc Lore’s influence, is working hard to leverage the power of their 4,700 stores, by launching new and aggressive in-store pickup programs to draw their customers back into the store,” said Michael Levine, VP of marketing at Photon. “They use the Walmart Mobile app as a means to create new synergistic experiences that cross from digital into the physical store – putting digital at the core for delivering new customer convenience.”

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TECHNOLOGY

Lids’ new loyalty program hits a home run

BY Deena M. Amato-McCoy

With a mere six months under its belt, Lids’ new Access Pass loyalty program is driving customer engagement to new levels.

Tired of running a stagnant loyalty program that only engaged a small amount of shoppers regularly, the sporting goods headwear and apparel retailer was ready to change the game. In April, Lids switched from a static points-based program to a digital model designed to “delight” shoppers.

“In the past, our Lids Club loyalty program enabled shoppers to collect points during each purchase, and that was it,” Jeff Pearson, senior VP of e-commerce and marketing, Lids Sport Group told Chain Store Age. (Lids Sports Group is made up of Lids headwear stores, Lids Locker Room retail chain, Lids Clubhouse retail stores and its online businesses. The company is owned by Genesco Inc.)

“We fell short when it came to communicating with our loyal customers, or even showing them their accrued points and how to redeem them,” he said. “It was time to bring in new offers and contests, and to keep consumers engaged to Lids core brand.”

Using its digital platform upgrade last spring as a jump-off point, Lids began designing Access Pass — an electronic loyalty program that engages all shoppers, and delivers a new level of rewards. To be sure to engage its entire customer base, Lids launched two membership options.

Access Pass Premium, which requires a $5 annual fee, rewards members with 10 points for every dollar spent. Once 1,000 points are accrued, members receive a $10 reward toward their next purchase — a reward that is redeemable at any of Lids’ more than 1,300 retail locations across North America, or online.

Premium members are also eligible for sneak peeks on new exclusive Lids merchandise, special gifts on birthdays, early access to special sales in-store and online, 20% off on all headwear and embroidery, and 10% off apparel and novelties.

A free version of Access Pass is also available. It rewards members with five points for every dollar spent, and features limited incen-tives, including special gifts on birthdays, and early notifications on special offers.

The retailer is augmenting its loyalty program with a dedicated app that enables users to track points, reward thresholds and earned rewards.

Keeping simplicity top of mind, Lids only requires Access Pass members to share their email address either online or in-store during checkout to earn points. They can also sign in at store-level by scanning their app at point-of-sale.

Since launching in April, Lids has enrolled approximately 1.7 million subscribers in both programs. Almost 70% of members — just over 1.1 million — are enrolled in the Access Pass Premium program.

Meanwhile, the Access Pass app is approaching 150,000 app downloads. While the app does not support mobile commerce, Pearson is increasingly bullish on the value it is driving related to personal engagement among members.

“Besides helping members track their loyalty, the app is a vehicle we use to engage them socially, especially when communicating exclusive offers,” Pearson reported.

For example, the app supported a promotion that rewarded Access Pass members that purchased over $50 between July 1 and July 9, with a $10 reward to be used in August. The promotion had 30,000 shoppers qualify for the reward, and 8% redeemed the incentive in August.

“This was something we couldn't communicate before we had the app or new loyalty program,” he said. “We now know which customers took advantage of the offer, and also learned that 60% customers used the reward in-store and 40% redeemed the offer online.”

Pleased with early results, Pearson expects to double Access Pass’ enrollment within three months.

“By the end of our fiscal year, January 31, 2018, we will be 10 months into the new loyalty program, and this goal would put us well ahead of numbers that we had annually for our previous Lids Club program,” Pearson explained.

“Customers are already responding well to the new program and it is outperforming our previous model,” he added. “We need to continue listening to our customers and engage them to find out what they want in future. That is how we will continue to evolve the program into something that is useful and desired by customers.”

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