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The fourth show in our Marketing Futures series that we’re producing in partnership with SAP, this episode explores brand strategy in the retail and e-commerce sectors, with a particular focus on omnichannel and customer loyalty.
Loyalty is that loyalty is not a number, it’s not a score, it’s not a box on a spreadsheet. It’s a human emotion
Jim began by explaining that in the Econsultancy report they’ve produced for SAP ‘The Future of Retail’, is based on in-depth interviews with nine senior retail industry thought leaders (with the full list being available in the report). Split evenly across North America, EMEA and APAC, it provides a global scope of the retail market whilst evaluating what strategies worked and which didn’t.
He said the habits that were picked up over the pandemic haven’t disappeared, with the reliance on digital creating a desire to put the customer first and connect the two.
The report highlights that consumers are getting increasingly confused with brands omnichannel experiences, Jim recounts a painful experience of his own, where he tried to purchase a PlayStation 5 online but he couldn’t get it to work and there was a lack of customer support that could help him, so he gave up on it. But he said this is contrasting with Currys for example, who are a featured case study, where if you have a problem you can speak to a trained sales associate on a video call, which would’ve been helpful to him when he was struggling to buy that game console. He pointed out that when they spoke to Danish luxury brand, George Jensen, their Head of Digital (at the time of the report) Will Lockie, said this has been important when they’ve been trying to get across their Danish credentials.
Mark explained that the rise of big data and B2B in the last 10-15 years, has given birth to some of the best marketing and business transformations. In his book ‘Boring2Brave’ he spoke to Scott Brinker, VP of the Platform Ecosytem at HubSpot, and the Editor of chiefmartec.com, who called this time the golden age of marketing.
He said: “I’d say when it comes to customer advocacy and loyalty is that loyalty is not a number, it’s not a score, it’s not a box on a spreadsheet. It’s a human emotion. It’s a human sentiment”.
He pointed out that marketers often report what they think they know based on numbers, by going into meetings with their bosses and reassuring them they’re on the right track, all because of a number, but they need to be thinking about loyalty. At a recent conference he asked the question ‘Who or what are you loyal to?’ and the responses included wives, husbands, kids, football teams, but only one person mentioned a brand, a skincare brand she had a very trusting relationship with.
In the age of big data, there’s a risk that the spreadsheet numbers become divorced from the end users, and for them as B2B marketing vendors they have an amazing set of data they can tell brands about their customers, but they’re also the ones getting much better at being guides for what that data means in a customer world, he said.
Jennifer said that with ASICS it’s important to get the right fit, they have their customers that buy the same style shoe every time, but for those dipping their toes into running for the first time, they want something comfortable, and that fits, and it’s hard to get that fit and experience right online. She emphasises that having an in-store presence is really important for that personal, physical and emotional connection with the brand, and she doesn’t see the physical footprint going away.
Graham added that he once bought a pair of trainers from ASICS some years ago for a marathon, and he went into the store in Edinburgh, they put him on the running machine, showed him how terrible his ankles were and explained how he needed sturdier trainers. They did all of this through using cameras pointed at the running machine and there was no way that could’ve been created that experience online.
Graham said that we’re in the heart of the fourth industrial revolution, and the big innovations coming out of this are different technologies that are creating disruption, and he thinks that’s what omnichannel is.
He said: “It’s the recombination of all of the existing channels that have been grown over the years through different parts of all the different industrial revolutions that have come and new channels and new ways of shopping and new ways of getting support have emerged, whether that’s physical stores, contact centres, online catalogues”
Omnichannel now combines all of those different assets into one experience, he explained. It’s about putting the customer at the centre and building experiences around the customer.
Jennifer agreed with Graham around brands needing to focus on being more customer centric. She said that brands aren’t listening to consumers, as they’re trying to push their agenda.
Graham also known as @TheOmniGuy on social media, is an influential figure in the field, Mark said: “I would like to echo Jennifer and add to this one or two minutes of worshiping at the altar of Graham Johnston”.
Mark thinks that for a long time they’ve seen brands focusing on what’s going to make stakeholders money, and what’s going to be easier, cheaper, and more accessible but now shifting towards how they build around customer needs.
He pointed out that transformation is never a project, but an ongoing thing.
Graham added that a lot of people put technology as the barrier but also as the answer, and technology is an enabler. He explained that you could deploy the best omnichannel technology and still not deliver an omnichannel experience for customers because it’s key to get your business, people, culture, reward, recognition, and processes lined up and then the systems.
Culture is important explained Graham, there needs to be a clear strategy especially for legacy businesses that have been around for years, having built those channels and siloed the thinking in those particular channels with systems, rewards and how that channel performs. Changing that culture is difficult when you’re unwrapping years’ worth of behavioural trends on how you treat a customer, he said.
He thinks if you have the perception of a customer must walk into the store and buy something, that’s not omnichannel, that’s single channel mindset and mentality. To change that cycle the focus needs to be not just purchasing in store, but that customers might go to the store and then go away and think about it and then order it online. Therefore, one of the most important ways of getting people into an omnichannel experience is understanding the multitude of barriers and getting people in the business to think more about their contribution to the omnichannel experience for the customer.
Jennifer explained that whilst she works at ASICS, they are part of the ASICA family, and are truly a technology company, there’s no arguing between IT and marketing. She sits on the consumer platforms team which ensures the success of the technology and programming strategy software across all regions.
She recounted her talk at a conference she attended, speaking on data, data collection, CRM and loyalty, and more specifically on the importance of understanding consumers in different regions, how they prefer to communicate, and enabling that technology in those areas.
She said: “It’s making sure that you are putting empathy into your marketing, too, and you’re looking at these people as humans, not just as transactions, not as people who are browsing products on the website”.
When it comes to big data, she noted that small data that is relevant is more important.
At ASICS they have a runner persona quiz, which they don’t provide an incentive for taking, just the opportunity to find out your persona, but ASICS is finding out – How often do you run? Why do you run? What are the things that motivate you? Not transactional questions even though those are important, but it’s about understanding who the customer is, that provides the data to reward them for engaging with them, she said.
All in all, there are a lot of working pieces that go into it, and it’s a necessity to stay on top of things making sure to evolve.
Mark said there is an incessant need for taking care and nurturing small data. Customer haven’t stopped evolving and businesses are evolving as fast as they can do to keep up, so what they do is use first party referral data to enhance the rest of the marketing stack.
He praised giffgaff’s CEO, Ash Schofield, for their customer-led network. Members get more minutes and more rewards for helping other members, so members run their advertising, promotions, products, offers and solutions. Their newsletter was invented ten years ago by customers, and it’s now designed and written by customers. Mark pointed out that it’s a brave idea because customers might say good or bad things, but they’re fine with it because that’s their community.
Another notable client Mark mentioned was Charlotte Tilbury, a global beauty brand, whose most reliable channel for acquiring high-quality new customers are referrals, because customers who are referred spend 39% more within the first six months and they’re six times more likely than average to refer someone else, which continues to build a community of referral and advocacy.
He remembered that whilst the Editor at Marketing Week magazine, ten years ago, advocacy was never written about, the closest thing was the notion of word of mouth, and that didn’t come up as a measurable or reliable acquisition channel.
Mark concluded that with Charlotte Tilbury those customers that refers are the VIP’s and holds such extended lifetime value.
Jim said: “I want a brand to raise its hand when I need something without being asked. And not all brands have nailed it yet”
He used Boots as an example, with the advantage card they offer bespoke pricing at the right time and there’s more of a value exchange.
Jennifer pointed out that regardless of the size of your company, all you have to do is ask for the information from consumers, and it helps if you have loyalists, but a lot of people will just give you information if you ask, without an incentive. For example, with skincare, date of birth may come into play for segmentation, with different ages have different skin needs, but that information is required for running, so for birthday information they’ll offer a discount on the customers birthday. She said don’t be greedy with information, don’t ask for information you’re not going to use.
Graham added that in the grocery sector, you get to see your customers far more often than other sectors, and therefore there’s more opportunities to build loyalty with them or lose it. It’s far easier to lose loyalty than it is to gain it.
Asda has recently launched their first loyalty scheme, and rather than it being points, customers get to add to their personalised cash pot, built up through individual missions that get downloaded to the app every week, for e.g., earning cash for buying particular products that week. The scheme is only being trialled in a number of stores but will be launched for e-commerce shortly.
Mark explained that their integration with Emarsys has helped them create a segment which plugs into Facebook to create a lookalike audience, which enables them to identify who the big spenders and loyal customers are. They’re finding an organic growth for businesses, using advocacy and loyalty.
Jim said that Anand Narang, VP of Marketing and Customer Experience at Bata, and a previous guest on the csuite podcast talks about retailers benefiting from going crypto, and offering digital currency as an alternative to loyalty points.
Mark spoke about their integration with SA Commerce Cloud and Emarsys, which enables them to identify brands’ best customers that would otherwise not be visible. The integration with Emarsys allows brands to take that data, activate it, and leverage it. CRM Build for example, increased their database size by 60% after three months of working with the Emarsys integration. He said that usually referral promotion sits on the website-post purchase area but Emarsys enables them to send emails to both the referred and the referrer, which brands have found increases customers by 10%. Even if the customer has forgotten they’ve been referred, Emarsys will send them an email reminding them, so the software is very powerful, he said. He’s convinced that customers don’t want to be marketed to anymore, they want to play a part in these brands they love and share it on and on, and that’s what they’re doing with advocacy and loyalty, shifting marketing from brand led to customer led.