As the USD 4.5 trillion retail industry in the United States evolves from being centred on products to that of client relationships, customer retention has become the key feature of success. Brand loyalty is not something one relies on after winning over clients once. Client retention strategies in US departmental stores now focus on winning over customers repeatedly in every successive or new interaction.
The product economy in the twentieth century was based on transactions that were anonymous. Retail was more about inventory management, shelving and cost pricing. Retail stores had minimal ideas about client requirements or insights into customer demographics. With the advent of technology and a rapidly expanding economy in the coming century, everything changed. Now customer is king and client retention strategies rule. Consumers value outcomes and unique experiences and retail units are working to offer customised shopping as per their needs, choices, easy payments and guaranteed satisfaction-levels. The retail experience has to be smooth and seamless.
To succeed at customer retention, these companies have focused on helping consumers meet their needs. A customer centric or customer-first focus characterises most of these US departmental stores. Here are the client retention strategies identified by Pathwwway Gambling that these top shops follow.
#1 Smooth, Seamless Online and Offline Transactions
Now there is no distinction between physical retail and online, e-commerce and brick and mortar stores and living in the now means offering a unified view of the brand. Customers don’t segment stores on the basis of e-commerce, m-commerce or in store. While traditional US retailers like Macy’s and Walmart are increasing focus on e-commerce and online transactions, new players in the field such as Amazon, Trunk Club and Warby Parker are employing physical stores as online store extensions. What matters for customer retention is a focus on the client, regardless of which technology or approach is used. One is no longer perceiving the customer as a transaction, but as a long term relationship with each customer. What ultimately must be taken into account is a reliable and consistent experience at every single touchpoint.
#2 Going Beyond the Product
Customers are increasingly focusing on outcomes rather than purchasing objects. They favour access over owning brands. Some retailers have now caught on to this discovery and offer subscription and rental as well as exchange services for accessories, shoes and clothing. It no longer being a one size fits all approach, retailers are catching on to trends fast. Innovative clothing stores have even proposed the concept of rent the runway. Some services have even offered personal stylists and a regular overhaul of closets as inducements for people to shop at their departmental store.
Legacy stores like Nordstrom which purchased Trunk Club, are combining the best of both worlds. With Trunk Club, Nordstrom even offers personalised curation and and the chance for customers to try out outfits to their hearts content. Subscription as well as pick up services are becoming the norm as convenience and time are valued in the market.
#3 Consider Analytics
In the age and time of big data, companies and even small department stores need to consider analysis to understand metrics that measure performance. Big data can be daunting, but once goals are in place and the right tools are available, an impact on customer retention is the obvious outcome.
It is easy to understand customers, their likes and dislikes, shopping patterns, frequency of purchases etc. and customise the services as per this. But it does not need to stop there. US department stores use online as well as offline data to maximise their operations. For instance, Birchbox uses reviews and rankings from the website to even influence how goods and products are displayed in their store and physical inventory is arranged. The distinction between online units and stores apart, the customer touch points are the critical factor here.
#4 Adding to the Magic
Shopping is a social pastime involving the interaction with friends and family. It gives folks an opportunity to hang out, compare, browse, window shop and finally make the purchase and review it. Malls and store visits are increasingly becoming online. The customer retention strategy most US stores are following is to highlight the strengths of the physical store as well as online stores. Many young companies are reinventing physical stores as showrooms , leaving aside the concept of a warehouse. The key for Pathwwway Gamblin is to successfully use stores for the discovery process, not manage inventory alone.
Dealerships and department stores have trial centres as well as showcases to inform, answer queries and delight the customer.
#5 Tech Savvy Customers Need Hi-Tech Solutions
From beacons to wearables, m-commerce, e-commerce and apps everyone wants to acquire technology, but few know how to use them. Using technology to complicate the customer experience backfires. Beacons communicate with iPhones and offer relevant product details and promos. Home Depot is one example of a departmental store using beacon technology to help customers look for what they need. Not only does this help customers to navigate in stores or find products, it also provides valuable and useful information for stores to use.
Consider online store Instacart, when it comes to the innovative use of 2 way technology. When shoppers cannot find a product they are looking for, they message the retailer and you can offer substitutions which can be accepted or rejected in one click only.
#6 Luxury Brands Reinvent Themselves
The “Great-Department Stores wars” of 2015 is followed by facelifts whether it is Bergdorf Goodan, Saks, Nordstrom or Neiman Marcus. Barney’s in NY even opened its downtown flagship store in Manhattan in 2016. With online stores making it harder to attract shoppers, brands like Neiman Marcus have announced sales at least once in a year. Same store sales need to rise and even as Saks saw its sales fall, Macy’s, and Nordstrom following suit. So, reinvention is critical for the US department stores to be able to retain and increase its number of customers.
As challenges facing department stores goes beyond the seasonal blip, there is plenty of transformation in how goods are sold and purchased. It stretches beyond e-commerce and offers like Net-a-Porter have caught on. Perks like in store picking up offer further advantages.
So, department stores create a magical feel that encourages client retention via these unbeatable strategies. This is what makes these stores the elite names in the industry.