Retail executives, marketers, and business leaders gathered earlier this month at the Hilton hotel in Midtown Manhattan for a series of conversations about what’s driving retail today.
The program was put together by CommerceNext, an annual community event series and e-commerce conference, and featured experts from popular fashion, beauty, tech, and food and beverage brands.
Retail Brew was there to moderate a panel discussion on two things that have been on retailers’ minds, well, forever: customer loyalty and retention, especially when faced with economic challenges, changes, and uncertainty.
Executives from Shiseido, DSW, Omaha Steaks, and Bluecore broke it all down, and while they shared a lot of wisdom on the topic, we’ve put together some of the best bits.
These interviews have been lightly edited for length and clarity.
Fayez Mohamood, co-founder and CEO of Bluecore, on what customer loyalty in retail means today and the importance of AI in furthering it.
It’s been interesting to see the trajectory of what loyalty means and how it has changed [in the past 10 years]. I think the biggest change is it’s not a binary concept anymore. Customers are not “loyal” or “not loyal.” It’s a spectrum.
[As a marketer,] we are in the business of how we convince a shopper to spend money with a brand or retailer. And especially in this economy, the shopper is going exactly the opposite: How do I spend as little as possible? Why should I spend money with you over somebody else? AI can be a place for finding common ground within that. Obviously, maybe you’ve heard all the examples of everything from product discovery to filling gaps in experience, and AI can help that, but I think even in terms of retail, we think about the two buckets: spend money and save money. AI can help with a lot of opportunities to save money.
Julie Roy, chief marketing officer of DSW, on how the brand interprets customer loyalty.
We think about [customer loyalty] as a pyramid. I feel like the bottom layer of the pyramid, the foundation, is really that brand experience where it’s going to be what drives that experience that gets customers coming back time after time. And then another layer that sits on top…is CRM. [This includes] engagement programs and channels that have made customers get deeper into the funnel and engage with your brand. And then another very popular program that drives the loyalty we’ll see more of a longer term is customer lifetime value. And it’s really important to think of all three for your brand.
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Julie Evans, VP and chief marketing officer of Omaha Steaks, on investing in product quality to keep customers coming back.
Acquisition and retention go together. When retention is working, that allows you to invest more in customer acquisition. So it’s something that we’re doing at Omaha Steaks to deal with recession and inflation. You hear the word shrinkflation, where you get less but you spend the same amount, and maybe even spend more to get less. We’ve actually done just the opposite of that at Omaha Steaks. We are investing in our product. So today, our steaks package that you get, our products are bigger, we’re stringing our steaks even tighter, and we are aging our steaks longer. All this is an investment in our product. Now, some of this cost we will pass on to a customer, but not all of it. And then we are winning with this because customers are noticing and they’re coming back for more. Our retention rate has never been better. So what that means is that I get a better return value from my acquisition efforts, when my first experience with Omaha steaks is better. And it just feeds the flywheel. So I can invest more to acquire and to identify our mistakes.
Omer Iqbal, SVP of digital strategy and architecture at Shiseido, on successfully using social media to drive loyalty.
[When it comes to social media], the authenticity and quality [piece] is extremely important. Sometimes we use social media for temperature checks. So if someone was complaining about something, how does Shisedo or a partner brand handle that? And it’s really, really important to make sure that [the way we handle] that is also authentic. Other than that, it’s a great way of thinking about what we should be doing next. So we have social not just for selling, but it’s a lot of active messaging, a lot of publishing, also, about what we’re doing in the community.