The Top 6 Most Effective But Least Used Retail Best Practices
Here are 6 under-utilized retail best practices which when effectively designed and deployed deliver impressive results before, during and after the sale.
Before The Sale
Retail success begins well before a sale with customer strategy and effective marketing.
- Designing The Customer Experience. Successful retailers have always been customer-centric. But best-in-class retailers are building upon their customer focus with Customer Experience (CX) management strategies in order to stand out in a socially connected, multi-channel and increasingly competitive retail environment. But while Customer Experience is getting plenty of media headlines and talk among retail executives, the design and fulfillment of a customer's wants, needs and experience is a complex undertaking that remains elusive for most retailers. Retail CRM technology is generally the best tool to deliver relevant, personalized and contextual CXs at scale. Recognize that CX in retail directly impacts brand and is the final competitive differentiator.
- Precision Marketing. Batch and blast offers produce poor conversions and harm future marketing efforts as consumers unsubscribe or blacklist irrelevant promotions. Instead, retailers must deliver relevant and personalized promotional offers using consumer insights and marketing automation software. Consumer insights are gathered from historical data such as POS, e-commerce, secondary systems, loyalty programs, contact centers and supply chain or fulfillment systems. When centrally managed in a CRM software system, and integrated with marketing software that tracks online customer behaviors, retailers are afforded the opportunity to design narrow customer segments and create highly relevant offers based on demographics, psychographics and behaviors, all of which can significantly grow customer acquisitions, retention and re-activation.
Effective customer segmentation may be based on customer demographics, customer behavioral patterns, customer preferences for known brands or into tiers based on Recency-Frequency-Monetary (RFM) values. The bottom line is that the more narrow the segmentation, the higher the conversions and the lower the opt-outs or unsubscribes. My experience has found that deep customer profiles combined with marketing automation software provide a particularly powerful combination for specialty, apparel, hard goods and luxury goods retailers. I’ve also found that promotional events and new product introductions deliver the highest marketing campaign conversions for these retailers.
During The Sale
Smart retailers leverage proven techniques to improve the in-store consumer experience, and their own sales success.
- Clienteling. Fewer than one in ten retailers leverage clienteling tools and processes, which results in a lost opportunity for building personal relationships between consumers and associates. In fact, consumer research consistently shows that personal attention makes the difference between browsing and buying.Clienteling delivers agile and personalized customer service often using mobile devices such as tablets or portable POS terminals. This engagement technique empowers sales associates to provide an exceptional in-store customer experience by supporting key processes such as guided selling, updates to customer information, communication of special events or promotions, deep (often animated) product content, inventory availability, cross-sell and up-sell suggestions, mobile check-out, portable payment processing, shipping information and a 360 degree view of the customer relationship (including style and brand preferences, prior purchases, active warranties, loyalty program information, key dates such as anniversaries and birthdays, and more.)
Advanced clienteling applications can also deliver event-triggered actions and reminders for associates as well as high fit product recommendations based on customer attributes, prior purchases and intelligent algorithms. And retailers are beginning to use clienteling to avert the rise of showrooming with cross-channel order fulfillment capabilities such as buy online/pickup from the store, buy online/ship from the store or buy in the store/ship from elsewhere. In my own experience I’ve also created sales associate dashboards on clienteling apps that deliver a visual reinforcement of key performance indicators such as sales bookings.
- Consumer Feedback. Most retailers fall short on getting the right customer feedback. A customer’s experience is their perception — an emotional response — of their retailer based on the sum of their interactions. However, not all interactions are equal and retailers must understand which connections are the most influential in achieving their business objectives. Feedback tactics are many, and include surveys, more formal Voice of the Customer (VOC) programs and consumer research. Regardless of method, retailers must understand which consumer interactions performed in which channels most affect purchases, satisfaction, retention and loyalty.
After The Sale
Once the sale is made, retailers must advance one-time consumers into repeat customers.
- Consumer Loyalty. Effective loyalty programs are a top sales tool in generating repeat sales and increasing customer share. Unfortunately, most retailers don't give these programs the strategic planning they deserve. The combination of customer personalization, appreciation and recognition result in repeat business. Developing loyalty program goals is pretty straightforward. Where loyalty programs tend to underperform is when they deliver less than relevant and contextual offers. Across the board discount coupons produce low conversions and erode already thin margins. Instead, delivering highly customized offers by accessing the customer profile and purchase history from the CRM system will increase conversions and result in improved up-sell, cross-sell and margin contributions. Whether introducing new products, holding a special store event, or simply recognizing your best customers for their patronage, using relevant and personalized data, will enable you to engage customers, get consumers back into the store, sell higher margin merchandise and enhance the customer experience.
- Consumer Intelligence. Identifying consumer buying criterion, purchase patterns and affinity measures are pre-requisites to effective marketing, merchandising, pricing and revenue growth. Augmenting consumer data housed in a CRM system with personal preferences, lifestyle information and social profiles can empower targeted communications and impressive precision marketing campaigns. And understanding seasonal trends, cross-category preferences, halo effects and up-sell opportunities are but a few data points that can trigger simple actions which lead to significant revenue growth.Few retailers optimize store structure based on hard data. To outperform peers, business intelligence should also be applied to create an optimal shopping destination, and consider how variables such as store design, store layout, store aesthetics, merchandise positioning, shelf placement, planograms, traditional and digital signage, and props and displays impact consumer behaviors, the customer experience and store sales. This data can also aid merchandising applications to improve decisions around inventory allocation and replenishment, cluster-based assortment planning and even workforce management.
More often than not, consumer intelligence will be challenged by disparate and often siloed systems, but this challenge can be met with an enterprise data strategy.
A common theme among these retail best practice recommendations is adopting processes which contribute to the customers' perception of the retailer, or in other words the customer experience. While each of these recommendations offer practical solutions to enhance the CX and the retailers business objectives, it's critical that they be orchestrated pursuant to a continuous customer journey, as opposed to random or piecemeal actions. A holistic strategy is needed to consistently serve customers across channels and achieve slated business objectives.