It’s more important than ever to initiate conversations with customers. Martin Shaw outlines which retailers in the IRUK Top500 are best at this and why
RETAILERS NEED TO reach out to customers. They need to do this not only to tempt new customers to risk a first purchase, but to develop conversations with existing customers. In this way, retailers gain much of the knowledge they need to personalise their offerings, to put their customers at the centre of what they do.
For multichannel retailers in particular, this means handling vast flows of information as customers interact via social media, email, high street stores, the website and customer service. The best of the best, Britain’s leading retailers, have not only faced this new reality, but made the most of the opportunities it offers. Where, once upon a time, the idea of continuing conversations across multiple channels on a personalised basis would have seemed beyond most retailers, this scenario is becoming increasingly commonplace.
That’s not to say it’s easy to achieve, as we discovered when we measured, through more than 30 metrics, how retail brands communicate with existing and potential customers. These gave us overarching results we outline in our ongoing research feature but here we want to look in more detail at what leading retailers do.
More specifically, what is it that retailers that perform strongly in this Performance Dimension do that other retailers don’t?
Or, more pertinently, what is it they do well? (It is, after all, perfectly possible to ask an office junior to handle the company social media accounts, that doesn’t mean this is advisable.) Here, we first focus on key areas within the
Brand Engagement Performance Dimension research: the use of social media and the effectiveness of email communications.
What the leading retailers do in social media
In recent years, there’s been much discussion among analysts not just about the effectiveness of social media in a retail context, but even in some cases whether retailers should use social media as a selling tool at all. That debate is surely over. Broadly, our research shows that British retailers have embraced social media as ardently as their customers.
It’s easy to see why. A Facebook presence is now the minimum shoppers expect of their favourite retailers. Increasingly, shoppers also expect to see retailers active on such channels as Twitter, YouTube and Instagram, especially when it comes to brands catering to digital natives. Accordingly, it’s not surprising that amongst the best-performing retailers in this Dimension, Topshop [IRDX RTOP], Victoria’s Secret and Forever 21 all out-performed competitors in key social media metrics.
However, that’s by no means the whole picture. The electrical retailer Currys [IRDX RCUR] performed strongly for offering social validation, the facility to Like items and share them with friends.
Even more revealing in showing what can be achieved is Myprotein. The sports nutrition specialist ranked a truly impressive 397 places above the place its Top500 Footprint would suggest. That’s in great part because it enables its visitors to Like products and to validate them on social media, while also offering product star ratings via its mobile app. The wider lesson of Myprotein’s approach may be that the retailer has successfully scaled up a traditional strength of specialists: sharing expertise with customers about products that, to the uninitiated, can seem arcane and overly complex.
What the leading retailers do in email
The importance of email communication is sometimes undervalued, as we explore in more detail in our new research feature. While the channel-hopping behaviour of millennials can make it seem as if email use is declining, it remains the most preferred channel across all demographics. When a 2016 study by Bluecore and NAPCO Research asked consumers how they would prefer to receive brand communications, 68% chose email. Even allowing for this figure being skewed by the attitudes of older consumers, it’s a stark reminder that email remains a great way to start conversations.
In this context, it’s fascinating to see that our research shows many trusted, mid-market retailers performing strongly when it comes to email. Debenhams, for example, performs strongly in terms of not only sending out emails that aren’t treated as spam by recipients, but their emails have a high read rate. Mothercare [IRDX RMOC] too sends out emails that its customers are more likely to read than those of competitors, as do Argos [IRDX RARG] and John Lewis [IRDX RJLW] M&S [IRDX RMAS] outperforms competitors in terms of sending emails that its customers don’t treat as spam.
The complete package
The five retailers we mention above are also interesting in that none of them rely wholly on email to achieve their high rating in the Brand Engagement Performance Dimension. Rather, each excels in a variety of metrics that we measured. Debenhams [IRDX RDEB] enables consumers to Like products. Mothercare makes it easy for customers to share product reviews and ratings, especially useful for new parents buying a buggy or cot for the first time, you’d imagine.
Looking outside these five retailers, House of Fraser [IRDX RHOF] performs strongly for a combination of offering product reviews and ratings, and sending out emails that have a high read rate. It communicates effectively via email and it’s also good at the softer art of getting customers to talk about products. Amazon’s [IRDX RAMZ] emails are more often forwarded than those of competitors. It’s rightly noted for its user-generated product reviews and product ratings.
Leave aside for a moment the individual factors – company culture, customer demographics and so on – that may shape where these retailers choose to focus their resources in the disciplines we measure for the Brand Engagement Performance Dimension, one thing united these retailers: they work at scale. In a sense, it would be surprising if they didn’t perform strongly.
However, it’s important to recognise that it’s not just larger retailers that perform well in this Dimension. We’ve already noted how Myprotein drives a strong performance through social media. Other companies also sit more than
200 places above their Footprint ranking in this Dimension. Why is this?
In the case of lingerie retailer Victoria’s Secret, it’s down to a combination of making products easy to Like, social validation and the way it offers product ratings, not so far removed from the mid-market retailers we’ve already analysed.
In contrast, fast-fashion retailer Forever 21 has far more in common with Myprotein. It performs strongly for offering shoppers the ability to share items on social media, and for not just letting customers Like products, but persuading its shoppers to Like pages. Here, perhaps, lie the bare bones of a customer engagement strategy for any company aiming at millennials and digital natives.
There isn’t one way to do best practice. Top performers in this Dimension have adopted various successful strategies with the common theme that each has built strong relationships with customers.
While this goes a little beyond our research remit, one way to explain the nuances in our findings is to observe that we’re entering an era when customers want retailers to initiate and continue conversations through a range of different channels. As we refine our research, we fully expect examples of best practice that are currently at the cutting edge to become mainstream propositions.
Our research will maintain a focus on performance, whatever that means in the future, refining our techniques so that we’re looking at new methods of brand engagement. As it becomes easier to link store and digital, for example, will retailers be nimble and technologically savvy enough to help store assistants continue conversations started online? Today, this is difficult. In the months and years ahead, we think it will become increasingly commonplace.