Tag Archives: nick spooner

The anatomy of an online retail strategy

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The long-awaited super-fast broadband network promises to have a dramatic impact on the Australian retail sector, in a similar way that the birth of the chain store in the 1880s and the advent of self-service supermarkets in the 1960s changed forever the way we shop and engage with retailers. A recent IBISWorld forecast of ‘Australia’s Digital Future in 2050′ predicted that the retail sector will experience a significant benefit from the new superfast broadband utility in the coming 40-50 years, including the possibilities of product embellishment, potential productivity gains and advantages in terms of faster growth, lower costs and higher profitability. The researchers also predicted that the traditional retail model as we have known it will be redefined, shifting much of the transactional commerce to online and mobile platforms, while the physical retail space is expected to evolve from a traditional self-service environment to a more immersive, social experience of merchandising.

Rather than a gloomy outlook, this future is pretty exciting, because it is already here. Ecommerce and m-commerce are already big business for retailers and service providers, and are complementing the shopping experience and influencing what we buy in ways we never imagined possible as little as ten or even five years ago. Social media has also played a significant role in the growth of online commerce, with customers choosing to engage with brands and products on this platform as part of the purchasing process. 42% of online consumers have ‘followed’ a retailer, while 67% of Twitter users have clicked through to a retailer’s site from a tweet. In January 2012, Pinterest drove more traffic to online retail sites than LinkedIn, YouTube and Google+ combined. In February it had moved ahead of Twitter, and by June it was driving more referrals than Bing and StumbleUpon. So how can retailers embrace this next evolutionary stage and, better yet, reap the benefits?

It may be cliché, but the single most important stakeholder in any retail strategy is the customer. When embarking on an ecommerce venture, the customer should be the heart of everything you do. After this, I see six other ‘vital organs’ making up the anatomy of a successful online strategy:

Visibility: Invest in the promotion of your online store with special focus on the products you sell. 74% of users search for a product not a retailer. Be where your customers are, if your customers are talking about your brands and your products on Facebook and Twitter, you should be listening and contributing to those conversations.

Listen to your customer: Consider the many different preferences customers have and different paths to purchase, and apply this thinking to the different touch points you offer. The omnichannel shopper wants to use all channels – store, email newsletters, catalogues, call centre, ecommerce and mobile – simultaneously.

Expand your reach: Let your customers interact with you across multiple channels (don’t just limit it to online). Create ‘experiences’ for individuals and communities, start a dialogue using social media and even experiment with new types of consumer engagement such as near-field communications. Why? Research by the Australian Centre for Retail Studies has found that omnichannel consumers shop more, spend more and are more loyal. But remember that omnichannel does not mean multiplying the same content and user experience across all channels. Each channel needs its own approach, especially mobile which due to its smaller size needs optimised content and more intuitive functionality.

A solid footing: Australia’s online and omnichannel retailers are increasing their investment in technology, with half of them either planning to replace their core ecommerce platforms in the next 24 months or doing so already.

Flexibility: Flexibility is the key to dealing with industry volatility, economic uncertainty and complexity faced by online retailers today. The technology platform you choose to invest in also needs to be flexible, to allow you to dream big. If the technology doesn’t support you the way you want it to, get new technology, not new dreams.

Insights: Data analytics allows a retailer to take the guesswork out of market segmentation and customer behaviour. Get to know your customers through their purchases and the context of their communities (such as Facebook and Twitter). By analysing your data you are able to make informed and targeted decisions and connect to individuals in a more meaningful way. With big data, it’s not about what you know, it’s about what you do with it. Retailers need to have the capabilities to turn the data into actionable insight and use this insight to increase the relevance of how, what and when to engage with consumers.

Each of these components will build the foundation of a successful online strategy, but the key is how well you meet the needs of your customers. The customer is in control of how they want to shop and how they want to engage with retailers. Retailers need to adapt to change at the same rate as consumers to stay relevant and appealing.

 

Sources: IBISWorld ‘Australia’s Digital Future in 2050′, Shareaholic, Shi & Daniels, Forrester, Hand and Parker (IDC), Google, SEOmoz, FD Mobile Survey, Comscore, trendwatching.com

Seven things to avoid in a customer loyalty program

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The recent fervour around customer loyalty programs has reached fever pitch, as retailers try ardently to win a share of consumer spending, which by all reports is subdued or declining. The trouble is, with everyone trying to get in on the action, consumers are becoming more discerning and more critical of programs that don’t deliver.

Today, most people have signed up to dozens of membership rewards programs – frequent flyer programs, frequent shopper programs, credit card rewards points programs, daily deals sites or promotional mailing lists – but how successful are these programs in driving loyalty?

Loyalty programs, at their core, are all about changing long-term consumer behaviour, so that a customer presented with two or more choices will opt for the choice that they perceive rewards them best. The ultimate goal is that over time this behaviour is transformed from a conscious choice into an unconscious loyal habit.

There are several reasons why dangling a loyalty program carrot to entice a consumer to shop is not as simple as it may first seem. Here are seven loyalty sins to avoid:

  1. The program is not generous enough to adequately reward or motivate loyalty, or is designed in such a way that redeeming loyalty benefits takes too long or is too difficult. This can be summed up with the phrase, “It’s just not worth it”. Phoney or miserly loyalty rewards are usually the result of incentives being tied to old, non-customer objectives such as increasing a retailer’s market share, populating a database or market research.
  2. The program is a copy-cat scheme, designed with little understanding about what matters most to your unique customer, based instead on other existing programs offered by competitors. This is a ‘one size fits all’ miscalculation. It may be quick to build, but it leaves you with no distinguishable point of difference. Also consumers are loyal for a number of different reasons, not just the promise of points or vouchers, so you should invest time to understand what is most desirable and carefully create the program around the customer. For example, your customer may be drawn to exclusive experiences such as special events, one-on-one advice or ‘master classes’, and you may not need to offer discounts at all.
  3. Staff culture does not have a relentless focus on the customer. Poor customer service is the enemy of customer loyalty. Having changed the customer’s behaviour and encouraged them to consider your brand, a negative experience can drive them away forever, or worst, prompt them to discourage others away too. Even average service that doesn’t recognise a VIP customer could also create a negative experience.
  4. Poor-quality customer data and information or lack of use by marketing decision makers. Having collected information that was willingly provided by your loyalty program members –such as their date or birth, where they live and other contact information – combined with transactional data such as how often they shop and what they buy, many retailers do nothing to enhance the experience or engage with the loyal customer on an ongoing basis. It could be as easy as sending the customer a birthday gift voucher, a newsletter, or suggesting products that complement ones already purchased. Some innovative retailers use customer data very effectively, such as using it to design the store layout or product range, or inviting local customers to events in store or in the local community.
  5. The program is not well monitored or was poorly implemented without enough testing. This is the ‘set and forget’ mistake and it means that the full potential of the program won’t be realised. If the program needs to be refreshed or just tweaked, you can discover this quite easily by measuring how well it is delivering the desired outcomes such as repeat purchases or higher value purchases.
  6. Management thinks technology is the only solution. Loyalty is more than a card, so you can’t rely on swiping a card at the point of purchase to create a loyal customer. Even new digital channels that are breaking new ground in attracting, engaging and retaining loyal customers, are only as effective as the dedicated, knowledgeable and responsive team driving them. Technology is an enabler, not a solution all by itself.
  7. Management has little involvement in the program and fails to staff the rewards team with senior business leaders.

 

So, who does it well? The Woolworths Everyday Rewards program is a loyalty program that works well in driving loyalty. It offers regular supermarket shoppers a comprehensive range of benefits and various ways to engage and feel rewarded – from discounts, gift cards for multiple stores, petrol vouchers, exclusive offers, partner programs and competitions. The rewards are easy to redeem (some are redeemed automatically) and customers can engage with blogs and other social media channels to gain current information about what’s on offer.

I also think Myer are doing it well. The Myer One program is very popular with customers – nearly two thirds of transactions at Myer are made by Myer One members. That’s an impressive level of penetration, and also shows how the program is driving behaviour. Myer can further enhance its loyalty offering by analysing the transactional data such as frequency, monetary values, as well as basket contents to tailor offers and promotions. It also makes it very easy for customers to feel rewarded, by automatically sending gift vouchers to eligible customers, so they can realise the benefits of loyalty without the hassle of time-consuming redemption processes.

Retailers and service providers must recognise what loyalty means for their customers and design a program accordingly. Most people are loyal because it makes them feel special, so creating loyalty starts with creating a special, memorable, engaging experience.

 

Do we need rocket scientists or marketing polymaths?

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People skilled in developing apps for mobile and tablet devices are in hot demand. It’s an example of how fast the industry is changing given these jobs didn’t exist only a short time ago.

Who would have imagined 10 years ago that data gurus and data specialists who simply love to pivot a table and dig deep in data would have been embraced with such open arms into the world of marketing! It is now imperative to be data smart and have a passion for all things digital. In fact, it has become the centrepiece of everything we do.

Today our industry needs people who have new and diverse skills – we need people who are creative and logical, social as well as cerebral. So do we need rocket scientists? Perhaps not, but they must be marketing polymaths – in other words, a keen mind whose expertise spans many different areas in the multichannel communications arena.

The days of one-dimensional, one-way, en masse marketing are long gone. We now live in the age where consumers expect and respond to targeted, personalised, two-way communication and value-added brand experiences. To be relevant to a consumer it is a necessity, not an option, to create multi-platform consumer engagement plays, in the channels they want to engage with. Our people therefore need to be skilled at both planning and executing a marketing campaign across many different platforms and communication channels.

My prediction is there will be three key trends and thought-patterns that will shape multichannel marketers, both today and for the next generation.

1. Collaboration. The role of the marketer is shifting from creative or specialist to ‘co-creator’ – and the most innovative ideas are multi-dimensional. So marketers need to learn to collaborate, integrate and execute ideas from a range of specialties (such as social media, experiential marketing, mobile, search, PR etc). The result will be an integration of complementary platforms into a single seamless marketing experience for the customer. Those that can connect with others to bring out their best and collaborate in a shared vision will succeed.

2. A curious mind that connects the dots. Being able to just ‘get it’ is a cognitive skill, but it can be learned and developed through broadening your horizons. This may mean following a lateral career path rather than a linear, upward one, or gaining a broad perspective through diversity of experience. What may seem random, unfocused and even unambitious to some is actually the sign of a curious, questioning and creative mind. By exploring different paths and interests – for example combining data science, web development and psychology – and picking up different, complementary skills along the way, a marketer will develop the ability to see patterns in the randomness of life and human behaviour.

This deep desire to understand everything and the natural ability to cross-pollenate unrelated ideas leads to fresh innovation and cutting edge creativity. It helps the multichannel marketer see different perspectives and understand how different customers think and engage. This curiosity also makes it easier to adapt to the ever changing digital world, make sense of current trends and predict future ones.

3. Social intelligence. It’s not just enough to know about social media, you also need to know the rules of engagement plus understand and empathise with your particular social media audience. You need to ‘get’ how people think and what will strike the right chord with them, and then engage in conversation based on common interests and experiences, rather than one-way self-promotion. To create a deeper connection, you also need to encourage meaningful ‘social actions’ to give purpose and longevity to the conversation. When combined with data analytics, you can gain powerful insights into the audience’s thoughts, behaviour and preference.

All of the change is taking place because the world of digital has collided at great speed with the world of everyday social interaction and ideas.

Just as evolution shaped nature through the survival of the fittest, the digital evolution will see the multichannel, multi-skilled ‘polymath’ marketer thrive because they can easily adapt and embrace change, share ideas and innovate, take risks, follow random paths and make deeper connections.

 

QR: the ice-breaker for consumer engagement

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This instalment of Nick Spooner’s regular blog for Marketing is guest authored by Melle Staelenberg, product manager – mobile at Salmat Digital. Over the past seven years, Melle has developed and delivered several successful interactive mobile campaigns in Asia Pacific, and is passionate about all things mobile.

 

The quick response (QR) code is the marketing equivalent of speed-dating, connecting consumers to brands so they can scan to buy, discover and consume new content or just engage in conversation. The possibilities are infinite, each with the potential to create long-term customer relationships.

Compared to the traditional linear barcode, QR codes can contain a greater volume and variety of data. The technology was originally invented and used in the mid-nineties as a way for the automotive industry to track parts during the manufacturing process. As they have an open ISO standard and are easy to generate, QR codes have recently become a popular tool in the mobile marketing space. To read a QR code on your mobile handset, you may need to download a (free) QR reader from your app store, which uses the camera in your smartphone to scan the code.

Below are five examples on how a QR code can extend a user’s experience from one medium to the mobile handset.

Shopping

In an attempt to drive mobile sales, the windows of two Sportsgirl’s stores in Melbourne and Sydney now serve as virtual shops, displaying a range of changing products alongside a QR code. By scanning the code, shoppers can view and buy the item on their mobile. Shopping centres and train stations across the country are expected to follow next.

Last month, Tesco in Seoul (South Korea) extended their virtual stores from subway stations to bus shelters. Much like a real supermarket, their billboards and posters resemble aisles and shelves filled with all the products you would normally see at Tesco. By scanning the products’ QR codes, the items are added to a virtual cart and can be delivered at home. It already is the most popular shopping app in Korea and Woolworths is trialling a similar concept on the walls of Town Hall Station in Sydney.

Print to video

American sports media company Sports Illustrated is offering their magazine buyers extra content through their Swimsuit Viewer App. When scanning one of the many images of the Sports Illustrated models, behind-the-scenes videos are instantly streamed to the reader’s mobile. This way, extra content can be provided exclusively to the ones who buy the magazine, representing a significant value-add. Last year, traditional QR codes were used. This year Sports Illustrated evolved the scanning part further, by using an embedded watermark solution, ‘hiding’ the code as a pattern in the actual pictures.

Feedback

In the US, a team of health care professionals of the local Pennsylvania State University developed a QR code based application to allow hospital patients to inform participating hospitals of their experiences in (near) real-time. According to the developers, it is becoming increasingly common for people who are having a negative experience to tweet about it as they are waiting. As online reputation can affect hospitals’ revenue streams, the QR based survey gives hospitals the chance to address an issue on the spot before it finds its way into the public domain.

Facebook Likes

QR codes can be used to drive Facebook ‘likes’. When the code is scanned, the user is directed to a mobile landing page containing the official Facebook Like button. As QR codes can contain and retrieve geolocation, custom codes are great for retail outlets and advertisements to track where your customers ‘liked’ your Facebook page.

SMS

A popular way of building a database of mobile numbers is to set up an SMS competition. Rather than asking your customers to text in a word to a number, a QR code can populate a SMS message with a predefined message and number. Combined with geolocation, this makes a powerful marketing tool.

So what?

Brands need to invest in connecting with consumers through the various touch-points that they encounter. This means having a cross-channel strategy that will complement the advertising messages and engage the consumer in the longer-term. And QR codes are a cross-channel marketing enabler. They allow brands to integrate their advertising messages in a consistent and complementary way to optimise the customer experience and drive an effective outcome.