Customer Loyalty

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Customer Loyalty - Brick and Mortar Stores: United States

To maintain customer loyalty and trips to their physical stores, brick-and-mortar specialty or category-focused retailers invest in multichannel marketing to cater to the showrooming and webrooming trend, use in-store user-generated content (UGC) displays, and launch retention programs.

#1: SHOWROOMING AND WEBROOMING

  • According to eMarketer, approximately 71% of consumers shop online to find the best price.
  • According to various studies, consumers browse products on mobile devices for the best price while in a brick-and-mortar store, which is also known as "showrooming," and even compare products online to find the lowest price, known as "webrooming." This trend has helped online retailers to drive customer loyalty and trips to their physical stores by investing in multichannel strategies.
  • According to a Verizon Media study, millennials are the most massive audience for webrooming and showrooming.
  • A 2013 Harris poll, showed that 69% of Americans made purchases by webrooming, and in recent years the number has continued to rise as more brick-and-mortar retailers have used multichannel selling by creating an online presence through e-commerce platforms to cater to their online audience.
  • A Merchant Warehouse poll revealed that 85% of millennial shoppers reported researching products online before making a purchase.
  • Aside from millennials, 89% of the older generation born between 1980 and 2000 also prefer buying items in a store.
  • According to Chris Wuhrer, the senior vice president of strategic initiatives and product marketing at Merchant Warehouse, "while about 60% of webroomers have showroomed, nearly 90% of showroomers have webroomed."

EXAMPLES:

  • Rent the Runway opened showrooms across major cities in the US offering a personal stylist and the ability to try on and feel the fabric of the clothes. This move, let them use their physical stores as a way to move beyond transactional selling and connect with consumers through experiences.
  • Upon entering the store, the customer signs in to their account via a tablet, after which the stylist gains access to their recent purchases and favorite items, making it easy for the stylist to make recommendations and add complementary accessories for the customer. It is also easier for customers as they provide pre-paid, pre-addressed packages to return the products.
  • Other specialty or category focused retailers that have used the strategy are Nike and Lululemon, as they have gone so far as to entice customers to their physical stores by offering complimentary athletic classes and workshops at their select locations.
  • According to a Marketing Land article, Urban Outfitters added restaurants and coffee shops to several areas so that millennial shoppers could connect with the brand in non-traditional ways and have a reason to enter and remain in stores.

#2: IN-STORE USER-GENERATED CONTENT (UGC)

  • In connection with webrooming, many people research products online but buy them offline.
  • According to RetailTouchPoints, user-generated content influenced up to 45% of purchases in 2017.
  • One way of using this UGC is by displaying them on screens — either a traditional screen or an interactive touch-screen for customers to choose their content.
  • Installing walls and screens with UGCs next to specific products has been found to influence customers' purchasing decisions, as customers increasingly use UGC for product research; therefore, retailers match the display to the products in-store.
  • UGCs include images and videos of real customers, content from social media campaigns, social influencers' content, offers and discounts, as well as other essential communications like sales, special offers, store-related information, and store guides.

EXAMPLES:

  • Applebee's team started a craze using #Fantographer promotion, which encouraged diners to share photos of their meal with the tag #PubDiet for a chance to be featured on Applebee's Instagram feed.
  • Within the first three months, Applebee's campaign resulted in a 25% increase in engagement and 27% more followers to the brand's account, which inspires them to return and dine again.
  • Shoe retailer, Nine West Store, also used an Instagram photo display screen on its store, which shared other customers' experience of the products on offer.

#3: RETENTION PROGRAMS

  • According to Nielsen, 84% of consumers are more likely to shop with retailers that offer a loyalty program. So, online and mobile retention programs are a great way to get customers into physical stores to complete their purchases while establishing a constant line of communication with their customers.
  • Using online and mobile retention programs, program members have access to exclusive information that builds trust and loyalty to the brick and mortar brands.

EXAMPLES:

  • Fast food retailer, McDonald's, used a digital retention program through its "My McD's" smartphone app in 2017 to bring customers in-store by offering coupons that are only redeemable at the physical restaurant.
  • Coffee retailer, Starbucks uses a digital retention program through its successful rewards program, "Starbucks Rewards," offering "star dash" promotions, as well as their newest loyalty perk launched in 2017, Starbucks voice ordering, which brings customers in store by gamifying the purchase process and making buying more convenient through mobile ordering.
  • MAC Cosmetics' "MAC Select" digital retention program brings customers in-store by offering member-only events, in-store line cutting, and a recycling program.

Sources
Sources

Quotes
  • "The shopping habits of consumers have changed drastically in recent years due to a rise in mobile shopping; approximately 71% of consumers are shopping online to find the best price. Studies have found that consumers browse products on mobile devices for the best price while in a brick-and-mortar store (known as “showrooming”) and compare products online to find the lowest price (known as “webrooming”). This shift in the retail landscape provides as an opportunity for retailers to improve the overall shopping experience."
  • "Some online retailers view the physical store as a way to move beyond transactional selling and connect with consumers through experiences. An example of this is Rent the Runway, an e-commerce brand that sells designer dresses and accessories. After building its online presence, it opened showrooms across major U.S. cities offering a personal stylist and the ability to try on and feel the fabric of the clothes."
  • "Upon entering the store, you sign into your account via a tablet and the stylist has access to your recent purchases and favorite items. This makes it easy for the stylist to provide recommendations and add accessories to complement your look. They also make it easy for the customer by providing a pre-paid, pre-addressed package to return the goods."
  • "Placing an emphasis on customer service and streamlining the customer journey will drive loyalty in an increasingly competitive space. "
  • "Retailers and brands should also embrace user-generated content (UGC) as part of their marketing strategies. UGC will increase engagement and consumer trust. It allows brands to connect with customers in an authentic and personal way, encouraging the most loyal customers to become brand advocates."
  • "The combination of UGC and e-commerce provides a rich media experience across all devices and channels. By using an integrated approach, retailers can leverage campaigns across their online presence and in-store promotions through UGC galleries, product reviews and videos in their marketing efforts."
  • "Creating a unified, seamless experience between digital channels and brick and mortar gives retailers a competitive advantage in today’s digital economy. Digital transformation presents an opportunity for traditional retailers to improve the overall shopping experience for the customer."
Quotes
  • "More and more people research online, but buy offline. In fact, RetailTouchPoints suggested that user-generated content influenced up to 45% of purchases in 2017. But how exactly should retail brands should use UGC to make a sale?"
  • "Use screens to display user-generated content in store. For example, a business can install an Instagram display to share other customers’ experience of the products on offer. You could use a traditional screen, or an interactive touch-screen for customers to choose their own content."
  • "A display like this, next to specific products, can influence a customer’s decision. As customers increasingly use UGC for product research, try to match the display to the products in store."
Quotes
  • "MAC Cosmetics’ “MAC Select” is another great example of a rewards program that entices members to move up the ranks and visit store locations for member-only perks."
  • "MAC Select is a tiered program consisting of three levels: Seduced, Devoted, and Obsessed. To push program participation, MAC Cosmetics allows anyone to join the program with a 15% off incentive. Once you’ve registered, you are officially in the “Seduced” tier and can begin making purchases to earn points and work your way up to the next customer level."
Quotes
  • "Whether online or offline, providing customers with something interesting to drool over is always a great idea to engage users. A social media wall is a great social media tool to integrate into your in-store marketing strategy with your online marketing campaign."
  • "A Social Wall displays real-time user-generated content in a really attractive and engaging manner to your audience, i.e., in-store customers. It is a great way to inculcate user trust in your brand/store. Not just real-time social media feeds, but there are different kinds of social proof that you could parade in front of your store customers to generate the authenticity factor and overall user trust in your products and services. "
  • "User-Generated images and videos are not just beautiful to look at, but what makes them so desirable is the objectivity associated with them. It is original and genuine content created by your real customers who are happy and satisfied with your products and services, content enough to post about it on social media. This is what makes UGC so trustworthy."
  • "Seasonal and holiday-oriented merchandise is always a great idea to initiate user engagement. It also helps to create the FOMO (Fear Of Missing Out) among your in-store customers. You could take this holiday spirit online or keep it offline or integrate the power of two, that’s completely your wish. "
  • "Experimenting Seasonal Merchandising with your brand is a great way to increase the per customer in-store purchase value, thereby, increasing your overall sales. It also helps you to create and excite the overall interest of the customers in your products. Starbucks is a top pioneer in experimenting this trick with its brand and utilizing the festivity vibe to enhance its sales and revenues. It annually organizes various festival oriented UGC Campaigns to engage users and increase their trust in its brand. "
  • "Contests, online or offline, are proven tricks to infuse excitement among customers and engage them actively with your brand. The best time to run an in-store contest is during holidays. Customers are already enjoying the holiday vibe and it’s the best opportunity to utilize the festivity zeal."
  • "In-store customers actively participate in such contests. You may give away the holiday freebies and giveaways thereby promoting your retail store and spreading the festivity hunch. You may also combine the power of online contests with your offline contests and entice the power of both tricks of enhancing your customers’ experience and earning their trust gradually."
Quotes
  • "Saks Fifth Avenue is a great example of a brand acknowledging that people want to be acclaimed for their style. Last fall, the brand launched its #SaksStyle campaign, displaying decals in dressing rooms to encourage instant uploading to social networks. Those with outstanding photos can be found in Saks’ Curalate-powered online gallery. Each image drives to an available product, making the outfits they tried on in-store shoppable online. By exhibiting how their products look on everyday style icons, Saks is recognizing UGC as a lever for clicks and conversions."
Quotes
  • "In a 2013 Harris poll, 69% of Americans made purchases by webrooming. That number has continued to rise as more offline retailers have adopted multi-channel selling, setting up ecommerce businesses and catering to web-savvy shoppers. Furthermore, reports indicate that younger clientele actually prefer webrooming."
  • "How popular is webrooming exactly? Chris Wuhrer, the senior vice president of strategic initiatives and product marketing at Merchant Warehouse, told Business News Daily, “While about 60% of webroomers have showroomed, nearly 90% of showroomers have webroomed.”"
  • "Although Millennials appear to spend most of their time online, a whopping 89% of shoppers born between 1980 and 2000 favor heading to a store to purchase items. A Merchant Warehouse poll stated 85% of Millennial shoppers reported researching products online before making a purchase."
  • "According to an Accenture report, nearly 40% of Millennial shoppers purchase items from a retailer’s online store if its physical location is closed. Brand loyalty remains an important decision-making factor when it comes to final purchases."
  • "As mentioned earlier, nearly half of shoppers that practice webrooming go to stores so they can touch and test products. In the same way clothing and shoe retailers enable in-store clientele to try before they buy, in-store product testing should be part of the retail experience. This has been such an important factor that many retailers that were previously online only, such as Clearly, Warby Parker, and even Apple, have opened physical stores so that shoppers can touch and try on eyewear or test out iPads and Macbooks before making their purchases."
  • "A growing number of retailers, including Nike and Lululemon, have gone so far as to entice customers to their physical stores by offering complimentary athletic classes and workshops at select locations. According to a Marketing Land article, Urban Outfitters added restaurants and coffee shops to a number of locations so that Millennial shoppers could connect with the brand in non-traditional ways and have a reason to enter and remain in stores. Nowadays, retailers need to think beyond the marketplace when it comes to in-store experiences. Brick-and-mortar shops can be hubs for brand discovery, immersive retail, and ultimately, conversion."