Customer data: collecting selectively for better service

Today’s retailer faces stiff competition, particularly from ecommerce.

In a world in which fewer people want to visit malls and other enclosed spaces, retailers have had to pull out the stops to provide exceptional customer service.

In addition, online retailers are fiercely competitive with one another, angling for the best way to attract and keep shoppers.

Customer loyalty is critical to success – and profitable retailers know how to foster repeat business.

Understanding customers to predict future purchases

Image: Porapak Apichodilok

Customers respond to the personal touch.

It’s one area in which in-person, brick and mortar stores can effectively compete against their online cousins.

But virtual stores can and do also provide personalization.

Data analysis is used by all varieties of retailers to predict future purchases by analyzing customers’ previous shopping history.

A “360 customer view” is used to create a strategy that considers each shopper’s interaction history and maps out an outcome for each event.

But recent research by Gartner points out that collecting the “right” data is much more important than collecting “all” the data.

Unifying data sources for a holistic customer view

The key to understanding the customer is having software that brings together certain data that is scattered throughout the business.

Combining various data sources into a heterogeneous whole in business intelligence solutions like Retail Pro Decisions helps retailers consume data to uncover customer patterns and needs and optimize processes for serving these needs.

That information may lie within other channels and includes shopping history, preferences, consents, products owned and relationships with other customers.

Many of those other channels, such as social media or mobile apps, provide rich information on customer preferences.

Brick and mortar locations use POS data as well as technology such as line-of-sight detection, which uses sensors to collect data from eye movements, allowing retailers to identify shopping patterns and tailor the customer experience to those habits. 

Collecting focused data to solve specific needs

Image: Jopwell

Collecting every shred of information is time consuming and burdensome.

It is also, according to Gartner, unproductive.

Identifying a problem first and then collecting data related to that issue is a far more efficient solution.

A number of customer experience problems can be addressed by gathering specific information and applying it to specific problems, such as long customer wait times, inadequate communication and low inventory.   

POS solutions like Retail Pro Prism that integrate CRM software can be tailored to collect certain information that provides a customer view that will help retailers predict shopping trends.

What information should be collected?

Retailers should filter their data through a lens of what will help them improve each interaction with a customer.

All information gathered should be able to be used to enhance the relationship with that customer.

The more precise the data is, the more targeted marketing campaigns for each customer segment can be.

And that will provide retailers with the ability to offer more personal, proactive customer service based on an individual’s buying habits. 


How AR can bring immersive retail to shoppers staying at home

Image: Vlada Karpovich

Apple CEO Tim Cook recently told Bloomberg that augmented reality (AR) is “changing the whole experience of how [customers] shop.”

Considering the typical experience of entering a store, looking through the merchandise, speaking to an associate and paying for the purchase has, in some cases, changed very little in the United States since Colonial times, until COVID-19.

Now, with social distancing and the Stay at Home life, augmented reality can bring brand stores home to their customers.

AR for COVID-19 omnichannel

Image: cottonbro

AR could be a very effective tool for retailers looking to enhance their omnichannel retail strategy while shoppers are still hesitant to return to stores with the pandemic’s ongoing threat.

AR adds digital elements to a live view usually by using the camera on a smartphone.

In a store, shoppers typically already have their smartphones out, so taking over that screen’s real estate with AR content can deliver additional information that will grab consumers’ attention and keep them focused on making a purchase.

Brick and mortars and e-commerce could benefit from AR advantages over more traditional advertising efforts.

Merging digital and physical retail

Image: Oladimeji Ajegbile

The technology can merge online and offline customer experiences through an intuitive, context-sensitive, and socially connected interface.

How will that desk look in my home office? Will that color red look good on me?

AR puts the desk in your room or the blazer on your back, using the smartphone’s camera.

AI currently serves as an attention-grabber for retailers looking to deliver novel experiences.

It also provides interesting potential benefits to customers – such as allowing them to “showroom” a product at home, or see a product in its future environment, helping them to make more informed purchase decisions.

With shoppers unable or unwilling in many regions still to visit stores, augmented reality’s showrooming benefits could be an opportunity for a more consultative approach to distance sales.

Bringing customer value

Image: Ola Dapo

Customers have been slow to warm up to AR, often considering it gimmicky and failing to see much value in it, but COVID-19 may change that perception.

The technology can deliver real value during the lockdown if firms are able to prioritize actual customer needs, such as more efficient and enjoyable shopping experiences that reduce decision-making uncertainty.

In contrast to other emerging technologies, which immerse customers into a fully synthetic environment (e.g., virtual reality), AR supplements reality rather than replaces it.

As such, it is the perfect lynchpin between the online and offline world.

Contextualizing experiences & spreading the word

Image: Anna Shvets

AR contextualizes products and services by embedding digital content into the customer’s physical environment, interactively and in real-time and increasingly allows customers to share their enhanced view of reality with others.

Customers draw on their own physical experiences and actions to learn more about products and services, while also relying on others to support them in product or service evaluation.

Because people have a natural tendency to share their experiences with peers, customers commonly consult peer reviews, go shopping together, and increasingly share their shopping in real-time through highly visual social media such as Snapchat.

AR blurs the boundaries between online and offline channels by providing a combination of embedded and extended experiences.


Measuring ROI of relationship building with loyalty programs

Customer retention is a huge challenge for retailers, and all recognize the advantages of cultivating a base of customers: A 5% increase in customer loyalty can increase the average profit per customer by 25% to 100%, according to fitsmallbusiness.com.

Creating a customer experience that is satisfying is a much more cost-effective strategy than constant prospecting.

Short-term value of increasing sales vs building relationships

Some businesses assume that by simply rewarding customers with discounts, shoppers will become more loyal; JC Penney discovered the unintended side effects of sale psychology too late.

However, cultivating a strong emotional bond between a brand and its customers is what makes it more likely that a customer will continue to visit the store or website in the future.

And the intangible aspects of relationship building come actually with a very clear ROI, if you’re tracking the right metrics.

For example, offering a sales discount as part of a birthday recognition personalizes the rewards experience to every member, making each feel special and recognized for being a loyalty club member.

Yes, you’re making them feel special and a little more bonded emotionally to your brand.

And yes, you see immediate ROI on those relational tactics when they redeem their birthday offer.

Watching for and leading customers to the next phase in the journey toward a higher overall CLV should be the goal of every loyalty program, and can be accomplished more effectively with loyalty and personalized marketing tools like AppCard for Retail Pro.

While well-run loyalty programs that deliver customer satisfaction clearly improve retention rates, they can also be a means to attract new customers.

First-time shoppers can easily recognize a program that makes customers a priority and that anticipates and exceeds their needs as soon as they join.

Having a well-designed loyalty program not only keeps returning customers happy, but it also grows the retailer’s customer base.

Millennial mindshare: Experiential loyalty

Millennials are the largest group of shoppers in the current market, and as a demographic, they are very brand loyal.

However, they are particular about what they are looking for in a loyalty program.

No punch cards for this generation — or trading stamps.

The key to success with millennials is building a relationship, and that’s done through offering special experiences rather than coupons.

For example, a credit card that offers advance ticket purchasing for popular events; a coffee roastery that gives members a heads up to new roasts and coffee tastings or a makeup line that provides VIP access to a celebrity Q&A on a social network are ways to make a customer feel special and want to be part of a loyalty program.

Loyalty programs are important to retain customers and attract new shoppers, as well as to help retailers forge deeper, richer, customer connections.

Happy customers spread the word, and prospective customers generally trust friends’ feedback more than advertisements or other types of marketing.

Loyalty programs help polish a retailer’s image.

Humans want to feel special, and loyalty programs help retailer provide that experience.

By doing so, retailers reap the benefits of repeat customers while attracting new ones — and enhancing their brand’s reputation.


Mitigating in-store risk and acting on customer safety perceptions during COVID-19

Covid-19 Best Practices for Retail: Safety Experience

COVID-19 triggered a rapid, never before seen evolution in consumer attitudes and expectations towards retail.

While many consumers are ready to get back to stores, fears and concerns around safety and hygiene are at an all-time high.

Watch this webinar from Retail Pro International and customer experience experts TruRating to see:

  • First-hand data on the evolving state of consumer attitudes to both online and physical retail over the past 12 weeks
  • How retailers are leveraging retail-time customer feedback to adapt faster
  • Best practices and retailer examples for mitigating risk and measuring safety experience (SafeX) in store

Take a proactive approach to measuring customer sentiment across your channels. Watch this webinar to get practical steps to help you:

  • Set the standard for safety in your in-store customer experience to encourage your customer base to shop in store
  • Maximize your opportunity with the first-mover customers who are shopping with you in person right now

In times of great acceleration, those who are able to innovate and meet the moment will be most greatly rewarded.


Get the COVID-19 Safety Experience Best Practices

Consumers are watching for consistency between brand’s messaging and business reality during COVID-19

Gaining customers’ trust and loyalty is always a painstaking business.

Particularly in times of crisis, that work pays off as customers turn to the comfort of the companies they are not only familiar with, but are also aligned with on global issues.

McKinsey research has found that 64 percent of customers choose to buy from socially responsible brands.

Retailers are under scrutiny today more than ever, as customers are increasingly interested in how companies demonstrate their ethical practices in the ways they conduct business.

Customers are attuned to local, national and global issues, and their buying decisions are increasingly influenced by how retailers are responding to the world.

Indeed, customers who once wondered, “Does this company have questionable labor practices?” now also ask, “How did this company treat its employees during COVID-19?”

News reports suggest that the businesses that show concern and empathy for their employees are winning with customers.

COVID-19’s shift in retail plans and consumer behavior

The COVID-19 pandemic and periods of economic shutdown have thrust retailers into crisis mode, and into providing services that were not on the roadmap for this year — if ever.

Curbside pickup of items from bath towels to ground beef has become commonplace; even this past January curbside was something only a handful of pharmacies and chain restaurants offered.

Customers too had to change buying habits and embrace e-commerce.

The proof is in the numbers: It was, quite literally, Christmas in May as digital sales were up 77.8% year over year to $82.5 billion, tracking higher than holiday shopping levels on Black Friday and Cyber Monday, according to Barron’s.

Analysts are still watching to see whether these shifts will remain or recoil.

But during times of crisis, the way a business treats its customers can make a lasting impact.

Loyalty is reinforced with brands who show care in crisis

Consumers remember which companies contributed to their communities’ well-being.

Those that were supportive earn loyalty — and the ones that were perceived to be unsympathetic lost customers.

Customer experience leaders must not only position their companies as being socially responsive in order to attract and retain shoppers, but actually strive to embody those values.

Empathy, care and concern are part of a new currency.

Of course, delivering high-quality products and services at a good value along with providing excellent customer service will never go out of style.

But involvement in civic causes demonstrates how — and whether — the company cares about their customers.

In times of hardship, customers want to know their favorite stores are there for them and will reward those retailers with their loyalty even after the crisis has passed.


Recessionary shoppers: convenience over experience?

Image: Andrea Piacquadio

For the past several years, retailers have seen two types of customers.

The first are those who, after living through a number of recessions, have determined they must protect their money at all costs.

They are experts on value, seeking deals, discounts and saving; they are coupon clippers.

The second have also weathered a number of economic slumps, but they see life as short and because money can disappear in the blink of an eye, time is more valuable than frugality.

That group is focused on convenience, and the motivation behind their spending money is to save time.

Both groups are important to retailers, and many shoppers today have traits of both types of consumers: They want to spend thoughtfully, not frivolously, and they are focused on efficiency.

Retailers that can demonstrate value for products or services that make customer lives easier or more fulfilling will therefore attract more loyal customers.

Value: the “Right” price or the “lowest” price?

Image: Artem Beliaikin

People always want a good value.

It’s not only those living on fixed incomes or those living on minimum wage but also professionals who are bargain hunters.

Off-price stores such as Nordstrom’s Rack and Saks Off Fifth boast customers from every economic strata—proof that savvy shopping does not discriminate.

However, the “right” price does not have to be the “lowest” price.

A strong value proposition that focuses on the benefits of the product or service may help nudge a cost-conscious customer to spring for the purchase now, rather than wait a few weeks or even months.

Buying time

Image: Jeffrey Paa Kwesi Opare

When value is coupled with the idea that a purchase could make one’s life easier, retailers have a winning strategy.

For example, buying a $400 robotic vacuum cleaner is less expensive than hiring a housekeeper, and also frees up time to spend time in a more pleasurable way.

In 2017, a study from the University of British Columbia not only found that people who bought time-saving products were happier, but that the findings were the same despite the respondent’s socioeconomic standing.

“The benefits of buying time aren’t just for wealthy people,” said UBC psychology professor and the study’s senior author Elizabeth Dunn, in a release about the research. “We thought the effects might only hold up for people with quite a bit of disposable income, but to our surprise, we found the same effects across the income spectrum.”

Outsourcing the work of getting products

Image: Sunyu Kim

Convenience really matters. Many people are looking for something that simplifies their busy lives while delivering a positive experience.

A 2019 report from Deloitte found that customers want to “outsource” the work of getting products.

Their focus has turned from focusing on the act of purchasing products to the act of using them.

Retailers that understand how to curate the “just right” selection of products will have a competitive advantage. For those stores, enabling convenience is baked into their foundation.

Other retailers, however, might find offer convenience more difficult.

From experience to efficiency

Many shops have invested in providing an entire experience around the act of shopping.

If these stores’ customers no longer consider the store the destination in and of itself and prefer a more efficient shopping experience, they will have to reassess the way they do business.

Convenience must be woven into the fabric of the retailer to provide a cohesive, integrated shopping experience, rather than a tacked-on, haphazard one, or, worse, one that is viewed as not genuine. Most importantly, retailers should view convenience as constantly evolving: People’s tastes change rapidly and what may be considered convenient today may tomorrow seem as dated as ornament beards.


Reopening your stores: optimize these 5 areas first

Stores are starting to reopen across the world, and we are watching this very, very carefully. 

We’re learning a ton of new things while watching what they are doing, because some of these stores are doing excellent business. 

In some cases, they are exceeding last year’s numbers!  Let’s take a look at what the most successful retailers are doing to make this happen. 

Overall, you have to approach opening as if you were opening for the first time. 

It has to have that level of excitement, that level of enthusiasm. 

So my first, best advice to you is to get super pumped up about opening! 

1. Store Presentation and Layout

This is the perfect time to reassess your store’s layout and shop-ability. 

You certainly want to organize your store so your shoppers can maintain the proper social distance from each other and still see all the great merchandise you have in stock. 

Here are some tips you can apply:

  • Start at the front door, and look inside your store as if you’re visiting for the first time.  Can you see all the way to the back wall? Can you identify key areas that you want to go to to see the merchandise?
  • The most important real estate in your store is the immediate right. Do we have some of our best merchandise there?
  • Many stores are putting markers on the floor that direct people through the store, creating a path to follow, much like grocery stores or Ikea have done. The benefit of this is that when your shoppers walk the path, they can see merchandise they might not have seen.  This is creating add-on sales!
  • As you walk the store, make sure your displays make people want to stop and check out the merchandise. Make the displays compelling with cross-merchandising, props, bundles, and multiple levels.
  • From each display that causes a shopper to linger, where will they go next? Merchandise your displays that lead the customer through the store, directing their eyes to the next great display of merchandise.
  • Signage is super important. Yes, you want to have signs that remind people to obey social distancing, but they don’t have to be negative or serious. A western apparel store put up signs that say, “There should be a cow’s distance between us!” Another store posted a sign that said, “If you can read the label on my jeans, then you’re too close!” Make it fun!
  • This is also a time to ensure you have excellent lighting that shows off and spotlights your great products.

2. Marketing

For many years, I have said that marketing should have a two-word definition, which is “Creating Demand.”

That means that any messaging you send out, whether it be by email, social media, or texting, should first be checked to see if the message makes anyone want to come to the store or the website, or to find out more.

If it doesn’t, rework it until it does.

  • I think the best messaging for reopening is, “We are back, we are safe, and we are ready for you!” Customers need to feel like you are welcoming a long, lost friend to the store.
  • Show them in your videos (you ARE doing videos, right?) and posts how you are working hard to keep the store clean, safe, and fun. 
  • There is a lot more activity in social media and emails now. More retail stores have had to quickly open up e-commerce sites, and the only way to promote those was to send out tons of social media posts and videos, and emails. So it’s noisier out there, and to compete you have to generate as much activity as everyone else. That means 2-3 emails per week, multiple posts on social media every day, and at least a couple of videos.
  • While I’m talking about videos, did you know that YouTube is the #2 search engine on the planet?  That means that you need to have your own YouTube channel, post all your videos on there, and make sure you tag them properly so people can find and watch them, and want to come to your store.

I have to confess that up until recently, I was not doing much with hashtags in social media. 

But I have come to learn that they are the best, most direct path to getting more customers to follow you. 

That said, they have to be the RIGHT hash tags – in other words, “#clothing” is not going to help you, but “#darkwashskinnydenim” will. 

Look at other stores and brands that you admire and take a look at their hashtags. 

Incorporate those into your posts and see if they get you more likes and followers. 

3. Staff

As you open your business, you’ll also need to give careful consideration to your staff’s needs and your personnel needs as well. 

  • Keep in mind that with social distancing, you may not need as many people on the floor as you did previously. Also, your store may have different hours now. So first, consider what you really need in terms of floor coverage, and then deal with any employee issues.
  • Some of your staff may be reluctant to come back. It may be that they are scared of the virus and don’t want to return. It may also be that they are enjoying the extra money they’re getting while on unemployment. This is all understandable, but you cannot be held hostage this way. Retailers who have faced this have had to get new staff, and you may have to do the same. 
  • The ones that do come back will need some additional training. First, they need to learn some new procedures in the store, especially regarding cleaning. We need to show customers that our stores are clean and safe, and so your employees will need to know how to clean and which areas to clean. Of special concern for apparel retailers is the dressing room. It needs to be cleaned between visitors, and I would recommend posting a log inside the dressing room that shows how often the dressing has been cleaned. 
  • Staff will also need to be trained on how to sell from 6 feet away. How do they still engage with customers, make recommendations, and lead them to the purchase?  Certainly, one of the things I think they’ll need to work on is how to move the conversation from the awfulness of this pandemic, to positive things. It’s something they need to drill before you open.

4. Selling

The politics of salesmanship are yet another challenge we have to get past. 

Scroll through social media for 2 minutes and you’ll see tons of divergent opinions about how this whole situation should be handled. 

  • Some of your customers are going to be worried about being out. Make sure they feel warmly welcomed, and make sure they see that you are cleaning the store, that you are safe, and that it’s OK to be there.
  • Other customers will want to completely ignore that there is a virus at all. Be careful about any customers who do not obey social distancing, for this reason only: you could freak out other customers who see it, and that could get you a nasty scene on the sales floor, or a nasty online review.
  • Lots of stores are stepping up sales by setting appointments to visit the store. An appointment is almost a guaranteed sale, because you wouldn’t make an appointment unless you had a strong interest in buying product, right? 
  • Products that are touched by customers need to be cleaned. Garments that have been tried on need to be steamed, and everything needs to get looked at to ensure safety. This is part of what your employees need to show customers on the floor – that we are safe, and the merchandise can and should be touched!

We are seeing a large variety of methods of selling right now. It’s a broad topic and way beyond the scope of this post.

The most important thing I can tell you is that we’re all learning how to sell in this new era, and there will be lots of tips and tricks coming. 

5. Merchandise

Frankly, the absolute most important thing in this blog post is a discussion of your merchandise.

Having the right merchandise is the key to your survival.

  • First, look at your Spring merchandise. We think Spring will be extended by a month or so, since people have not seen a lot of the merchandise you received when then lockdowns started. Look carefully at what you have and what’s on order. Talk to your vendors and find out if they still have goods and negotiate for discounts on whatever they have left, but only if your Open to Buy plan (you do have one of those, right?) tells you that you need it.
  • Fall goods could be tricky. We’re already hearing that many manufacturers are not able to produce their typical Fall production because of the shutdown. Start talking to your vendors about Fall and see who can and cannot ship, and how that will affect your assortment plan.
  • Most importantly, you need a sales plan that you believe in, coupled with an inventory plan that enables you to turn goods even faster than you ever have. In all of our merchandise planning and open to buy planning, we are putting together models that ensure positive cash flow through proper sales forecasting using algorithms and artificial intelligence. Cash was always king, but now, it’s super-king. Make sure you have a solid plan to get you through the rest of this year!

One last thing, which is really, really from my heart. I believe in independent retail. I believe in you. Every politician says that small business is the backbone of our economy, and that’s true. 

That said, small businesses are the people who build communities, who take leadership roles to give everyone a better life.

To that degree, you are more than the backbone of the economy, you are the backbone of society itself.

As such, your survival is hugely important! 

And you can do it, if you apply these first tips that I’ve listed here. 

So go for it. Make it happen, for you, your family, your community, and for the future for all of us. 

We all stand with you, and we’re cheering you on!

Get the retail reopening checklist

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Guest author: Dan Jablons
Management One
Retail Smart Guys

3 Ways to keep customers from feeling ‘distant’ during COVID-19

The current economic lockdown has exacerbated challenges many retailers have faced during the past several years, as decreasing foot traffic and increasing online competition has chipped away at margins.

Even as local governments consider when retailers’ doors can and should reopen, many customers will remain wary of running non-essential errands.

However, a vast majority of retailers already have employed successful strategies to compete with online merchants, and now they are redoubling their efforts to keep customers happy and satisfied.

For many retailers, that means continuing to invest in the online portion of their businesses to remain viable.

Current circumstances have forced them to offer new services — including some “out of the box” solutions — that may become permanent additions to their business strategies.

Here are 3 ideas that retailers large and small are using to meet, and even exceed, customer expectations during COVID-19.

1: Social media engagement

Topping the list of retailers’ worries is figuring out how maintain and possibly even increase customer relationships with their customer bases digitally.

These are strategies that are not only imperative when in-person engagement is impossible or reduced, but important also when competition from online merchants seems overwhelming.

Social media marketing via Facebook and Instagram are perfect tools for the task, as is direct-to-consumer email marketing.

Customer relationships can be nurtured, and clients can still feel the strength of their loyalty and engagement with brands using social media as well as personalized emails.

These can be targeted to specific sets of customers, and might herald the introduction of a new offering, or provide a unique service.

2: Unique offerings

Customers engage online with retailers that provide unique services online.

Offering an online class or special event can offer a much-needed “social” activity, while encouraging staying in the privacy of one’s own home.

Tying the online presentation to products for sale with handy links boosts sales as well as the retailers’ reputation.

Any retailer can offer a relevant online class, including flower arranging, lawn care, golf instruction, cooking lessons, makeup application, etc.

3: Expanding online and delivery options

Retailers that offer more stock online will reap more sales, and appeal to a broader customer base that may stick around long after social distancing mandates have disappeared.

Expanding the breadth of online offerings, including gift cards, lets customers support businesses 24 hours a day, 365 days of the year.

If shipping is a problem, curbside pickup has become one innovation that is likely to become part of everyday shopping. The convenience of calling ahead and picking up without leaving the car is addicting.

In addition, it may actually require some retailers to hire “runners” specifically to satisfy those customers.

Omnichannel or online retailers are well-positioned to deal with restrictive store hours but should always be alert to maintaining the best experience for customers.

The website experience should be straightforward and welcoming, so customers can shop and engage in a frictionless, easy way.

Engage the whole supply chain

The retailer-vendor relationship is also crucial during these uncertain times.

All of the supply chain is in uncharted territory, so continuous partner engagement is critical.

All links in the chain should be encouraged to provide the best customer experience for their customers, in ways that can be mutually beneficially for all partners, such as passing along special offers through finance partners or working with distributors to provide free shipping.

Those relationships will become particularly important as customers return to in-store shopping, as retailers rebuild their customer loyal bases and engage the newer customers who were attracted by the retailers’ digital presence.

Millennials: the force driving thrifting’s upsurge

 

 

What’s old is new again.

Need proof? One look at the resale market—particularly in clothing — makes it abundantly clear that a change in market dynamics is happening.

A few months ago, GlobalData and online clothing retailer ThredUP released a study that estimated that the U.S. second-hand apparel market was worth $24 billion in 2018. Within 10 years, by 2028, the used-fashion market in the United States could explode, reaching $64 billion, an increase of 166 percent.

Goodwill stores and their ilk – church thrift shops, charity donation centers, etc. – have been around for years. That hasn’t changed.

But their ability to use technology to help categorize, price and display goods has exponentially increased. That, coupled with a burgeoning online presence has helped the segment grow.

But what has really made it popular is the millennial generation.

 

Millennials: today’s social conscience – and it shows in retail

Millennials are particularly attuned to being stewards of the planet.

As a result, the idea of using natural resources to create new products when used goods serve the purpose perfectly is anathema to these young adults.

Buying hand me-downs has a significantly smaller ecological footprint than purchasing new: According to thebalance.com, the annual environmental impact of a household’s clothing is equivalent to the water needed to fill 1,000 bathtubs and the carbon emissions from driving an average modern car for 6,000 miles.

Millennials also are extremely interested in supporting brands that share their personal values and tend to support purpose-driven companies.

So, buying clothing from a charity that supports low-income communities is a win-win for millennial shoppers.

 

Quality and value don’t have to be mutually exclusive

This generation is also focused on quality and value.

Buying a winter coat at a discounter may be the least expensive option, but its material quality is likely to be poor.

A better option might be a coat made of high-quality materials, but the price could be quadruple that of a big box competitor.

The best option, therefore, for these shoppers, would be a gently used coat from a high-quality brand.

Pricing will be drastically lower, with minimal degradation in quality.

For example, Patagonia’s Worn Wear program encourages customers to bring in their old clothing to local stores for resale, in exchange for a gift card.

Many of those also include a note describing how the item was worn.

That creates a very special connection among the item, the seller, and the buyer.

Patagonia’s mission: “To build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”

The cost and quality of new items can never match the value proposition of cost and quality of used.

For example, a new dress shirt bought at a big-box discount retailer may cost the same as a used luxury brand, but the latter will last longer because of its quality construction. It may even be re-thrifted.

In addition, for truly vintage items, there is not only the appeal of “the hunt” for the piece, but also of its uniqueness.

For example, finding and wearing a Levi’s red tab, sherpa-lined denim jacket from the 1980s has a special appeal.

 

Impact of ignoring the millennial mindset

Andy Ruben, a former global strategy exec at Walmart and founder of Yerdle, was a recent featured speaker on The Tony Robbins Podcast.

He warned of significant ramifications for retailers that did not recognize this Millennial mindset.

Retailers that ignore the customers’ dedication to sustainability and their intense focus on value, as well as bespoke-type items, could result in a significant erosion of their customer base.

Recent studies report that sales of resold clothing will surpass the revenue of “fast-fashion” retailers, such as H&M, Forever XXI, etc.

In response, struggling department store chains could follow Patagonia’s model and allow clothing “trade-ins.”

Or, they could open a thrift-mart for luxury items, where customers could buy used items of highly desirable brands.

It’s the same business model as that of a new car dealer that also owns a used car lot on the same property.

Another related concept that brick and mortar retail could adopt is one successfully launched by Rent the Runway, in which a woman can rent a designer outfit for a special occasion, spending far less money than if she’d bought the clothing.

Millennials are surpassing Baby Boomers in population; there are roughly 73 million in each group.

As a result, retailers’ focus must evolve to take into consideration this generation’s unique characteristics, including millennial’s inclination to gravitate toward brands that are an expression of their personality.

Thrifting is environmentally conscious, budget-friendly and provides an opportunity to hunt for the just-right, uncommon item, which speaks directly to how millennials want to spend their money.

Knowing your customers and winning their loyalty: correlation or causation?

 

 

Customer retention is a huge challenge for retailers.

The cost of acquiring new customers is far greater —some studies suggest as much as seven times more — than keeping existing ones.

Creating a customer experience that is satisfying is a much more cost-effective strategy than constant prospecting.

Many find stopping customer churn to be a serious challenge but recognize the advantages of cultivating a base of customers: a 5% increase in customer loyalty can increase the average profit per customer, according to experts.

Retention can boost the average profit per customer by 25% to 100%, according to fitsmallbusiness.com.

Nurturing the emotional connection to your brand

Existing customers feel valued when they can participate in loyalty programs.

The programs foster a sense that they are getting a deal in appreciation for their repeat business.

Some businesses assume that by simply rewarding customers with discounts, shoppers will become more loyal.

However, cultivating a strong emotional bond between a brand and its customers is what makes it more likely that a customer will visit the store in the future.

For example, offering a sales discount as part of a birthday recognition personalizes the rewards experience to every member, making each feel special and recognized for being a loyalty club member.

Winning loyalty with new customers & millennials

While well-run loyalty programs that deliver customer satisfaction clearly improve retention rates, they can also be a means to attract new customers.

First-time shoppers can easily recognize a program that makes customers a priority and that anticipates and exceeds their needs as soon as they join.

Having a well-designed loyalty program not only keeps returning customers happy, but it also grows the retailer’s customer base.

Millennials are the largest group of shoppers in the current market, and as a demographic, they are very brand loyal.

However, they are particular about what they are looking for in a loyalty program.

No punch cards for this generation — or trading stamps.

The key to success with millennials is building a relationship, and that’s done through offering special experiences rather than coupons.

For example, a credit card that offers advance ticket purchasing for popular events; a coffee shop that gives members a heads up to seasonal drinks or a makeup line that provides VIP access to a celebrity Q&A on a social network are ways to make a customer feel special and want to be part of a loyalty program.

Loyalty programs are important to retain customers and attract new shoppers, as well as to help retailers forge deeper, richer, customer connections.

Happy customers spread the word, and prospective customers generally trust friends’ feedback more than advertisements or other types of marketing.

Loyalty programs help polish a retailer’s image.

Humans want to feel known, and loyalty programs help retailers provide that experience.

By doing so, retailers reap the benefits of repeat customers while attracting new ones — and enhancing their brand’s reputation.