Made for Each other
It's become common in today's society that when a couple gets engaged, they are feted by friends and family, celebrations are planned, and they shout to the world at large that they are committing to each other for all eternity.
What if that same scenario were common in consumer packaged goods? Imagine what it could mean for retailers, if they were able to engage their customers for all eternity. The loyalty alone would be invaluable, not to mention the ability to better predict sales performance and essentially guarantee profits.
The reality of today's retail environment, however, is that shoppers can't be easily wooed into loyalty simply with shiny diamonds and parties. Retailers can't just show up and expect loyalty to happen, nor can they count on the consumers they do have to remain loyal. Consumers want more than just a pretty face–they want a retailer who listens, who pays attention to their needs. In short, consumers want a relationship. And savvy retailers are stepping up.
In late April 2015, Kroger bought assets from dunnhumbyUSA to create a new company called 84.51° that uses analytics and insights to improve customer engagement.
"We want everything we do–every decision we make–to be about the customer and what that person wants," Stuart Aitken, chief executive officer of 84.51°, said in a recent statement.
This consumer-focused attitude is growing momentum in retail, and means deploying a targeted, strategic plan on how to best engage customers and foster a loyal relationship with them.
RETAILER, KNOW THYSELF
Love yourself, and others will love you. That age-old advice holds up surprisingly well in retailing for developing a consumer engagement strategy. If retailers, whether big box stores or independents, don't know who they are, how are consumers going to get to know them, fall in love and commit?
"Establishing what you stand for is very similar, whether you're a one-store operator, small chain or multi-regional retailer," says Jim Hertel, managing partner of Willard Bishop, Barrington, Ill. Consumers, he notes, shop for food six to eight times per month, hitting two to three different banners. Knowing yourself as a retailer, and establishing what you stand for, creates a stronger presence for consumers, and can intrigue and engage them, pulling them back into your store.
"The task is less about getting them in the door and more about earning the extra visit or two each month."
– JIM HERTEL,
"The task is less about getting them in the door and more about earning the extra visit or two each month. It's the personal level of engagement that can be the difference maker," Hertel notes.
When a retailer knows what it stands for, it's easier to understand the shopper value equation, or, simply put, understand the consumer. Retailers need to "take inventory of what is important to their most important customers and understand how the store is delivering against those critical needs compared to the competition," Hertel notes.
Those needs could comprise a variety of factors, such as price, assortment, produce selection or cleanliness. And while a retailer doesn't have to rate superior in every dimension, they do "have to be the best on at least one dimension that's important to your best shoppers, or you will always be their second or third choice," Hertel warns. On the other hand, he adds, a retailer doesn't want to be rated poor or below in any dimension.
When retailers know who they are, what they stand for, and what their customers want, the next step has to be maintaining consistency, says Tricia Chismer Gustin, senior manager for research and marketing with The Parker Avery Group, Atlanta.
"Customers need to have the confidence that their shopping experience, as well as the items they purchase, are what they expect–i.e., the same item or at the same level of quality and value–and that the shopping experience as a whole consistently meets or exceeds their expectations," Gustin says. This can be especially critical for independent retailers, or new retailers still making a name for themselves. Follow the example of convenience chain 7-Eleven–a shopper can go into a 7-Eleven anywhere in the world, Gustin explains, and grab a cup of coffee or a gallon of milk knowing that their entire experience will be exactly what they expect.
"7-Eleven has standards and 'recipes' that they follow to deliver this consistency," she notes.
BUILDING NEW RELATIONSHIPS
When a retailer decides to make a move into a new region, or even simply a new neighborhood, the prospect of building new relationships can be daunting. A retailer has to prove itself worthy of these new consumers, and simply sending a weekly circular doesn't have the sweep-you-off-your-feet feeling consumers want.
When retailers know who they are and can say with confidence that they are providing a consistent shopping experience, the next step should be to go to the consumer, rather than asking them to come. The best way to do this is online.
Social media is playing a bigger role in retail for both retailers and consumer packaged goods suppliers. But conversations and opportunities that start online must continue offline to be truly engaging and effective.
"The digital connection only goes so far, and can easily get lost among the hundreds of other companies vying for space in a very scarce–and often fickle–customer's mindshare."
– TRICIA CHISMER GUSTIN,
Parker Avery Group
"The digital connection only goes so far, and can easily get lost among the hundreds of other companies vying for space in a very scarce–and often fickle–customer's mindshare," says Parker Avery's Gustin. Customers crave personal attention and recognition, she adds, and they want to know that companies are just as concerned with their satisfaction as they are with gaining their dollars. That means staffing stores properly, and hiring store associates who can deliver on brand expectations, Gustin notes. Corporate must support these hiring criteria.
Willard Bishop's Hertel agrees that personal touches will give any retailer–whether new to an area or not–a leg up with consumers. But retailers should take it a step further, he suggests, and get to know not only their consumer, but their communities.
"There's a lot that is enabled at the store level. For example, learning customers' names and preferences makes them feel special," Hertel says. "But loyalty is also a function of community involvement. When the store manager is on the school board or sponsors a Little League team, they're delivering more value than simply from product and price."
READY, AIM, CLICK
In relationships, often there is a lot of work that goes on individually to make for a better partnership, and retailers know that. While direct digital outreach to consumers is important, so is digital strategy for shopper data. Retailers today are reaching for new digital and data-digging technologies.
Digital signage, for example, can have a significant impact on a consumer's experience, providing immediate information that can bolster in-store productivity, says Steven Platt, director of the Platt Retail Institute in Hinsdale, Ill. And mobile technology is getting hyped, but Platt cautions that it still has a ways to go.
– STEVEN PLATT,
Platt Retail Institute
"A lot of people are talking about mobile apps right now, but it's not necessarily related to the retailer," Platt explains. Much of the hype for mobile apps in retail has to do with proximity marketing, which he notes can be cost prohibitive and difficult to execute.
"If Shopper A is at your store and looking to buy diapers, and receives a message that Huggies are on sale, that sounds like a pretty easy strategy," Platt says. "But then you also have to make sure that the right price is being displayed and that the merchandise is where it's supposed to be, and that the message Shopper A receives is tailored to her as opposed to Shopper B." Proximity marketing technology is very complex, he says, and many shoppers are already doing tasks on their mobile devices unrelated to shopping.
Retailers that are on top of their technology game are using location analytics to ramp up their consumer engagement strategy, Platt says.
"We can use people's smart devices to measure repeat business," he explains. "We don't know the exact individual, but we can tell from a unique address that you've been in the store three times in the last week, and have spent a lot of time in the baby aisle, for example."
This type of shopper tracking has been around for years, Platt says, formerly done predominantly with videos. But with wi-fi, the cost of tracking technology has dropped. And it comes with the additional promise of more traffic via new clicks.
"When you're looking at online shopping, the most important thing for a retailer to understand is who is visiting your site, and how often," Platt says. "You've never really had that in the retailer realm, but now you do. Your customer is your most valuable asset, and with the advances in wi-fi and location analytics, we can bring that same intelligence to the retailer. And that's all about customer engagement."
True love can be messy and disorganized, but a carefully crafted strategy for consumer engagement can cut out a lot of the potential stumbles. Sure, it doesn't sound quite as romantic as a sonnet, but in the realm of consumer packaged goods retail, shopper loyalty sometimes needs a little encouragement to become something beautiful.
Molly Strzelecki is a freelance writer living in Chicago. She has been covering trends in the consumer packaged goods industry for more than a decade.