Building and maintaining brand loyalty has been a pillar of consumer marketing strategies since trademarks were first used to protect product names. The concept is, or at least was, relatively straightforward. Own the brand and, if possible, the category, control its distribution, target its users and motivate them to keep coming back for more.
Successful brand owners do this magnificently. They protect their brands with ferocity, they own as much of the distribution channel as they need to, they know and anticipate their customer base and they deliver consistently. By doing all of this, the logic goes, they win their customers for life – until now that is.
Burgeoning digital channels are changing consumer behaviour. Rapidly growing numbers of purchasers are now browsing online instead of traipsing into brand flagship stores – or if they do visit a store it’s often to see the physical product before they go back to their mobile devices or PCs to check out what else is around. They are also increasingly demanding tailored offers, customised interactions and detailed information accessible at any time on the digital device of their choice. Above all they want a consistent, seamless experience across multiple channels without road-blocks and unnecessary interruptions.
The effect of the digital phenomenon on consumers has been to make them more fickle and substantially harder to please. It’s not so much about the brand or the product – it’s about how they get access to it.
Perhaps not surprisingly given the speed at which digital innovation is occurring many companies still create artificial barriers for their customers. For example, they maintain separate organisations for online and physical stores creating an entirely unnecessary and potentially hazardous gap where none need exist.
In the 21st century the retention of customers is as much about the journey towards the purchase decision as it is about the desirability of the brand itself. Companies must provide a continuous path from the moment a consumer researches a purchase to potential post-sale interactions. This means moving to an omnichannel operating model.
This model is not as complicated as it may sound at first glance. It does, however, require an intense focus on consistency, seamless delivery across all channels and a clear view of the way that the customer goes about deciding to purchase. Effectively it means allowing the customer to conduct all interactions as a coordinated, branded experience spanning touch-points such as retail outlets, websites, mobile and social media.
This is a very real opportunity that can be quickly realised. Adopting an omnichannel approach allows merchants to establish and strengthen a personal connection with their customers – something that was lost as multinational chain retailers dominated the market. The personal connection, in effect, emulates the close relationship that consumers enjoyed with their local retailers before the advent of mega outlets took their toll on the smaller retail outlets.
This is not merely a theory. UK supermarket chain Tesco has developed a mobile app which allows customers to create shopping lists that direct them straight to the items they have selected in-store. Tesco’s petrol stations are following suit by trialling a technology known as ‘Optimeyes’ which scans a customer’s face while they are fuelling and offers customised instore screen advertisements as the customer goes into the store to pay.
Premium US retailer Nordstrom, which operates 260 retail outlets in the US, has expanded its digital sales channels to enhance its customer experience and better compete with online retailers. Among a number of innovations, it has developed applications which enable mobile payment and a range of personalised advertising and complimentary services (such as alterations) based on the frequency of application use. Other steps towards developing a truly omnichannel strategy for Nordstrom are consolidation of its backend systems to give the company a single view of inventory; offering free same-day shipping and returns for all products purchased online; developing the Nordstrom Innovation Lab to focus on omnichannel ideas; and reorganising roles within the company to support seamlessness between online and offline touchpoints.
Nordstrom’s strategy has paid dividends. Online sales increased by 27 per cent during 2013 to surpass US$1.9b for the first time. Mobile sales also rose by 40 per cent in the preceding year. Importantly, Nordstrom also monitors the volume of web-influenced sales in its stores as a key success metric.
Call centres globally are shifting from a customer experience which replaces the common voice-response menu, well known to irritate customers, with a personally answered service. Leaders in this field are also adding software that gives customer service representatives basic and contextual information about customers when they call – including their name, age, address and products they’ve bought recently, stores they’ve visited and their online behaviours.
There is a real opportunity in New Zealand to get ahead of the game with an omnichannel approach to communication. If you’re not doing it your competitors either are or will be.