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Looking Back to Move Ahead in Loyalty, Customer Experience

February 7, 2017

By Aimee Koontz, Director of Marketing Loyalty & Advancement, Alliance Data 

Throughout the 2016 holiday season, brands hustled to find the best ways to engage their customers. Those that succeeded did so by re-evaluating customers’ physical and digital experience. Where some retailers were reluctant to separate from a “comp” mentality – measuring comparable sales growth year-over-year – and relied on promotional strategies and doorbusters to entice holiday shoppers, a select few trendsetters rethought their approach. Let’s look at four strategies from the holiday season that should inform how brands behave throughout 2017 and beyond.

Computer Mobile           

  1. Full-service omnichannel 

    Customers aren’t thinking about how to engage with a brand in one channel or another — they’re thinking about a singular brand experience they want to have. Several savvy brands created a better experience, regardless of how customers were shopping, by simply removing channel nuances. Full-service omnichannel has replaced its more traditional predecessor, refocusing how particular channels are used based on how customers are most likely to use them. Others approached inventory management from a channel-agnostic mindset, using RFID to track inventory and cut back on disappointment due to unavailable products. Brick-and-mortar brands contended with online giants by using in-store showrooming and elevated experiential moments, engaging customers in a high-touch way. In-store pick-up and click-and-collect options by retailers such as Walmart helped get products into customers’ hands faster and reduced back-end shipping costs, and retailers benefited from impulse buys and last-minute sales generated by the additional foot traffic.

           

  1. Tech-enabled everythingTech-enabled everything 

    The buying power and influence of millennials and the iGen have become increasingly critical. Plugged-in brands adopted technologies that offered faster navigation and product searching. This holiday saw artificial intelligence and machine learning firmly embedded into many brands’ marketing strategies. Branded chatbots provided customers with human-like interactions online and supported them through in-store search, product recommendations and reviews. More advanced chatbots such as one used by Nordstrom engaged customers with “psychographic” gifting solutions: ideas personalized to a recipient’s likes, interests and personal preferences. It goes without saying that smartphones have allowed brands to connect with many (if not most) of their customers in real time; the rise of text-based brand engagements took “concierge commerce” to a new level. With augmented and virtual reality, users experienced their favorite brands – such as Macy’s and Bloomingdales – remotely. “Smart assistants” and virtual-reality headsets dominated gift lists in 2016; these technology-enabled platforms are loaded with new ways for brands to connect and engage in 2017 and beyond.

           

  1. Checkout simplified

    The rise in frictionless payment solutions dominated marketing conversations, with brands looking to reap the benefits of more simplified checkout processes. Mobile optimization has been the focus as brands look to improve checkout flows and cater to customers who are researching product reviews in store on their mobile devices. From one-click-type payment solutions to all-inclusive mobile wallets, brands and customers alike are seeking solutions to make the checkout journey quick and hassle-free, but just adding a responsive design on a website doesn’t guarantee a smooth mobile buying experience. The optimal solution includes a simplified checkout process, such as that of Williams Sonoma, that uses supported payment methods, loyalty tracking and a mobile-friendly experience. Branded mobile wallet solutions – including one launched before the holidays by Kohl’s – provide retailers with extensive customer data and engender loyalty by directly connecting them to their most reliable customers — all while reducing costs associated with transaction fees. Plus, the app-based mobile wallet provides customers with a simple solution for storing credit and loyalty information, organizing rewards and offers, and reducing the time spent at checkout.

          

  1. Smarter marketingSmarter marketing

    For the 2016 holiday, we saw several brands create more meaningful interactions and relationships by embracing the customer point of view instead of relying on more traditional promotional practices. They stayed competitive with online retailers by employing price-matching strategies and early notifications about promotions. Amazon, the biggest online retailer, used member-only (and, in some cases, device-specific) promotional strategies and up-to-the-minute shipping to differentiate itself. Nearly all retailers offered free shipping and free returns for all online purchases. Some brands capitalized on the e-gift card push by offering an e-gifting solution designed to engage last-minute shoppers. It provided givers with a convenient and personalized gifting option and gave recipients the option of accepting or exchanging the item – or of receiving the item’s value as a traditional e-gift card. 

Don’t get left behind.

Forward-thinking brands need to peer through the lens of the customer — it’s in her moments of dissatisfaction and bliss where real insight is found. We know customers are willing to share their data as long as they see value in what the brand is offering in return. Let those customer habits that are already ingrained define your strategy; they’ll take you much farther than any one-size-fits-all approach. Convenience and experience are rapidly becoming as valuable a commodity as money, and it’s the brands that can stay focused on what’s most important that will move in the right direction through 2017 and beyond.

Aimee Koontz is director of marketing and loyalty advancement, Alliance Data card services. She can be reached at aimee.koontz@alliancedata.com.