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12 Approaches that Work – Part 1

Retailers develop customer relationships that stand the test of time by inspiring trust and loyalty. Chloe Rigby outlines 12 practical approaches that leading retailers take to long-term engagement

1 – Marry content with commerce

The latest thinking suggests that putting content alongside commerce is key in giving shoppers reasons to return to a website. A 2014 report, Content and Commerce, from L2, put the emphasis on bringing the two together: this, it said, “may be what separates retail winners from losers”. David Walmsley , director of M& , says it was crucial for its new site to weave content and commerce together. “For us it was critical that we didn’t create something that could feel like a content ghetto: turn left to shop and right to read,” he told InternetRetailing Conference 2014.

“One of the key aims that I think a lot of retailers have is to drive that frequency, drive reasons to return, and tell stories in season,” he added. “Creating that daily drum beat in content has, I think, been critical to the new flagship dotcom.” Walmsley says it’s important to focus in particular on the kind of content that customers want, from short ‘picks of the day’ to in-depth features on the actors and actresses who represent the brand. “Capturing that edited point of view for our customers is critical because we’ve got a broad assortment,” he said. See more on how Elite retailer M&S handles brand and engagement in our interview with David Walmsley.

2 – Find new ways to communicate the brand

“Our objective is to be a destination of choice,” says David Kohn , head of multichannel at Snow + Rock . “What we stand for is being the ultimate authority on products and advice.” The skiing-to cycling fitness equipment retailer is finding new ways to communicate that authority across its sales channels. In store, that means giving helpful and expert advice. Online, that means finding new ways to advise.

A Snow + Rock mountaineering expert has moved from helping shoppers in store to explaining to website visitors through online videos what gear they need when tackling a climb. Visitors to the website also trigger the proactive offer of advice over live chat when business rules judge that customers are in need of service. They may, for example, have looked at three pairs of skis on the Snow + Rock site, or, on the CycleSurgery website, have spent three minutes scrolling up and down the bicycle page.

“We’re trying to bring the expertise and content to life as much as possible,” noted Kohn, speaking at InternetRetailing Conference (IRC) 2014. Later, on an InternetRetailing/SLI Systems webinar in December 2014, Kohn said that in 2015 the retailer would be working to enable store staff or other brand representatives to answer questions posed to them by digital shoppers using social media such as Twitter.

3 – Use big data to improve customer service

DIY store Homebase can make the best and most relevant offers to customers when it knows what home improvement projects they are planning. “Ultimately we’re trying to make it as effortless as possible for our customers to shop in our stores or online so we can provide the inspiration, support and advice they need to create homes they really love,” says Simon Langthorne , customer loyalty manager at Homebase. But getting the kind of insight that underlies this is hard when DIY takes place relatively rarely:

“One of the biggest projects we’re working on at the moment is increasing understanding, creating dialogues to actually understand what customers are planning to do in their homes – when they are planning to do those things in their homes, and then we can proactively start talking to customers about those things, about inspiring them to get over the inertia of potentially not starting those projects. Once they start shopping in our stores, we then start combining that transactional data to give them a programme of activity that will lead them through that project and beyond.”

Speaking at IRC 2014, Langthorne said the company created such programmes by methods including surveying Nectar cardholders about their project plans, while also linking online and offline transactions to create a single view of the customer. “By understanding what customers are doing upfront, we can combine that with transactional data to make it more relevant.”

4 – Make intelligent recommendations

Recommendations are key to cross-selling and upselling. Today, online product suggestions have moved on from sometimes random suggestions of items that ‘people like you bought’ to learning from shoppers’ shared experience about what items work well together and suit specific types of people. Retailers including Marks & Spencer, BrandAlley and Shop Direct-owned and use Dressipi technology to power online style recommendations through a tool that uses individuals’ sizing and preferences to work out which clothes to suggest to each through personalised recommendations. As a result, says Dressipi co-founder Sarah McVittie , speaking at IRC 2014, its retail clients consistently see double-digit net sales growth. Perhaps that’s because, Dressipi has found, confident customers spend three times as much on clothes as unconfident shoppers. But to be useful, recommendations rely on the accuracy of the data that underpins them.

McVittie says the Dressipi technology actively encourages customers to ensure the data held is both up to date and relates to one specific shopper, rather than a family member who might be using the same device to shop. Shoppers who store details of their existing wardrobes in order to ensure recommendations are relevant effectively ‘clean’ Dressipi’s data themselves. “If you provide a utility, ” she says, “customers will very happily give you that data because of the value they’re getting from it. ”

5 -Taking a long-term perspective

Subscription schemes that ask customers to pay once in return for year-long perks, including free delivery, are growing in number. Such schemes promote long-term relationships with customers, who see them as a good deal when they use a retailer frequently. The merchant benefits because paid-up loyalty scheme members tend to use the services more often and spend more over the course of the lifetime relationship.

Customers who join the Asos Premier loyalty scheme, for example, pay £9.95 a year. In return, they get VIP status, with early or exclusive access to sales, 10 free issues of the company’s magazine and, probably most important to them, free next day delivery and returns, no matter how small the order. Sounds like a win for the customer.

Asos chief executive Nick Robertson says it’ s a winner for the retailer too. “I’d give it to them for free,” he said, speaking at Asos’ 2014 interim results presentation, “because those who use Premier order more frequently and return slightly less. They are more valuable customers.” He added, “By paying for something they feel they’ve entered into something and will use the value of the £9.95.” Asos experimented to get the price right. Membership of the Premier scheme cost £29 when it was first launched. As the price was cut, more people signed up.

6 – Add value to the loyalty card

Waitrose aims to inspire loyalty across channels through the myWaitrose card. In store, shoppers can use the card for a physical benefit: a free daily tea or coffee. Online – and in-store – shoppers receive a 10% discount when the free card is used. Targeted offers give extra discounts across a range of products and across channels. Take-up has been high. The card had 4. 8 million members at the time of Waitrose’ s most recent financial results, the half-year to the end of July 2014. In those results, Sir Charlie Mayfield , chairman of Waitrose owner the John Lewis Partnership linked a 6% rise in Waitrose customer numbers to the success of the card. “This reflects,” he said, “the growing appeal of our omnichannel offer.”

He said myWaitrose and sister scheme my John Lewis were “encouraging customers to shop more frequently with us across all of our channels”. However, there are costs here. Mayfield said investment in myWaitrose, along with money put into and into new stores, had resulted in lower profits at the supermarket.

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