Five Key Building Blocks to Grow Customer Loyalty in Retail

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Five Key Building Blocks to Grow Customer Loyalty in Retail

Today's digital environment has dramatically changed the landscape for traditional brick and mortar retailers, full of both opportunities and challenges. On one hand, retailers are coping with customer retention issues while trying to secure baskets against the online players. On the other hand they also have to adapt to new technologies and ideas like mobile, personalized marketing, and shopper experience management. Retailers must up their game while tackling competition coming in from all directions.

 

Being pulled in too many directions makes it challenging for a retailer to pick the most important places of focus for customer retention. Below are five areas which could help sustain customer confidence in you as a retail brand and keep that valuable customer relationship going strong for the long haul.

 

Have a loyalty program. And “work” it.

It may seem simple, but just having a loyalty program is an important step in building loyalty. However, it is important to not just have a loyalty program, but to foster and build a loyalty program. This enables you to not only communicate with your shoppers over time to enhance your relationship with them, but it also allows you to capture vital purchasing behavior data over time. This data is crucial in planning what you sell and how you sell it to drive trips and build baskets, and offers you the opportunity to personalize the shopping experience.  

 

Regular content-driven interaction (like recipes and nutrition information), event-based offers, and customer community building brings in a long-term sense of association with your brand, and loyalty to your brand

 

Prevent incomplete shopping lists.

Now that seems obvious – every retailer wants to maximize the sales in each trip. It’s all about bigger baskets, right? Well, put simply, the items you sell matter - especially in the Grocery segment. If shoppers are leaving your store without the items on their list because either you do not carry them or, even worse, you are Out-of-Stock, you risk losing your customer to your competitor.  Get the assortment right so that customers leave each shopping trip knowing that their shopping list is complete, and they will return knowing they can always find what they need on your shelves.

 

Choosing the appropriate target segment and using a customer-centric approach to assortment planning ensures that the needs of your customers are met.  There are tools and solutions available today that leverage customer data to help optimize the assortment and regionalize the offering so that customer preferences, needs, and motivations are considered in the planning process and included in the measurement on the backend.  

 

Look beyond discounts to build customer loyalty.

Be it recipes and beauty tips delivered via a mobile app, a health and fitness e-magazine, or a direct mail lifestyle magazine, content consumption adds to the holistic feeling of customer satisfaction and demonstrates that you understand your shoppers.  A Nielsen* study showed that over 30% of millennial consumers said that non-monetary benefits (e.g. high-priority service, exclusive access, etc.) are what they consider to be top loyalty program benefits. While the modern consumer may also at times be deal hunting for coupons and offers, content in the form of e-magazine, takeaway recipe booklets, or even gamification can prove useful in engaging the consumers. Use of the loyalty program’s data, based on specific shopper’s online and offline behavior, is critical in content distribution: getting the right content, to the right person, at the right time – all building perceived or real value with your customers. 

 

Balance between online and offline.

It’s 2018.  By now every retailer understands the value of having a digital presence. But don’t ignore your non-digital customers or traditional interactions with most customers who likely engage with you across multiple means or channels. The customers who don’t use your mobile app are likely still very valuable shoppers. While mobile is the hot, new channel, running app-only offers could lead to missed opportunities with traditional shoppers. This is where data and customer understanding is key. By creating a good mix of shopping opportunities on mobile and offline, retailers can reach their maximum number of shoppers with basket-driving and/or loyalty-building offers. The data can help you understand the proper balance for what you are trying to achieve.

 

Personal interaction matters.

A loyalty initiative backed by the best technology is half the battle, but in-store interactions are still pivotal to trip conversion. Customers continue to see value when staff initiate helpful engagements. Time and again it has been seen that all customers don’t engage with technology on their own every time and when the staff on the floor takes the initiative to engage and help them out, it makes a difference.  A major US multi-line retailer saw significant gains in sales and loyalty when they placed “Beauty Consultants” in their self-serve beauty section of select stores that over-indexed with beauty shoppers. Creating meaningful interactions at the store-level can have long term impact on customer loyalty.

 

Begin by looking at categories or aisles where closure rates are below what you are expect, and find new ways to engage your customers in-store via event marketing,  .  By offering your consumers little incentives such as wellness classes, product demos, or a wine-pairing seminar, for instance, in place of standard communication, you can help drive incremental trips. Similarly, on-site experts like nutritionists and beauty advisors can help customers on their patch to purchase – ultimately driving loyalty and building baskets. 

 

In summary, don’t let rapidly advancing technology and a changing market landscape distract you from attaining and building customer loyalty, but instead harness technology for your gain. Now, more than ever, it is important to focus on the retail levers that will make the biggest impact with your shoppers and drive your business forward.  A strong loyalty program, a customer-centric assortment, value-adding personalized content beyond discount offers, a balance between digital and non-digital, and a strong focus on in-store engagement are 5 of the key, basic building blocks for sustainable, long-term customer loyalty.

 

*http://www.nielsen.com/content/dam/nielsenglobal/eu/docs/pdf/nielsen-global-retail-loyalty-sentiment-report-Italy.pdf

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