2019 Retail Forecast: Customer Loyalty


Hey, guys. It’s Syama Meagher, CEO of Scaling Retail. And the biggest retailers and the smartest retailers are looking to find new ways of capturing customer loyalty as we look into 2019 and 2020. So what does that mean and how can you stand to gain from these strategies whether you have a fashion startup, growth stage business or enterprise? What are the new approaches to customer loyalty and how can they fit in with a fashion marketing plan of your own?

Well, companies like Nordstrom have launched The Nordy Club. They also have the NordstromTXT option. The Nordy Club recently came out in September of 2018 as an amazing initiative to really help enhance their customer loyalty program.

Now, over 50% of Nordstrom sales currently come from those who are Nordstrom card holders. So in the introduction of The Nordy Club, not only are they looking to expand on the offering of their existing customer base, but they’re really looking to bring in more people to have that Nordstrom credit card.

So what happens in The Nordy Club when you’ve got that card? Well, at the highest level of spending, you’ve got more personal shopping days. You get an in-home appearance by a Nordstrom personal stylist to help you shop. The Nordy Club fits neatly into their fashion marketing plan as well as the department store’s sales strategies.

You can also do the online save to cart and try it on in-store as well as curbside pickup amongst all of the other traditional offerings as a point system to help you gain points and to turn that into cash and other types of experiential.

Nordstrom also released their Nordstrom text messaging line, NordstromTXT, that allows you to text and pay bills, talk to a stylist, and really start to do a little bit more without ever even having to get onto a computer or check your email. So Nordstrom is obviously always a pioneer in customer experience, launching these two new programs in order to help gain customer market share and also to increase brand loyalty.

Now, other great examples- MATCHESFASHION launched their Stylists’ Program, also in 2018, an amazing platform that’s allowing their stylists on the other line, it’s like a regular 1-800 number, to get on the phone with you as a consumer to help you shop the site.

And, in fact, those stylists will then add items, search online for products that might work well for what your needs are, and by the next time you log into your account, there are a suite of products there that are ready specifically based on what you’ve asked.

I think that’s really great. Number one, you start to get access to their styling, to their customer team, which is amazing if you’re familiar with the MATCHES’ assortment and how they currently send out their emails and the style and the aesthetic that they project. And number two, it’s great because you are getting to be more dependent on that, right? If you have a question, if you want to try something, you have the opportunity to really bridge a relationship.

Now, other two really fascinating things that are happening in terms of customer loyalty. The first is going to be the integration of text messaging in a much bigger way. Wander Beauty recently did a test for three months using a text messaging service. Within those 3 months, guys, they actually saw an increase of 2,300 new customers, not just people who sign up for text messaging, but new customers within that 3-month period. Talk about a results-driven fashion marketing plan.

In fact, their CEO mentioned that for every dollar that they spent towards this text messaging application, that includes carrier fees, etc., they actually earned $25 back in terms of sales. Those are huge ROIs that have only previously really been seen when it comes to specific kinds of influencer marketing.

Now, to further amplify those results, they had a 25% click-through on all of the text messages that were being sent out to their consumers. And guess what, guys? They kept those text messages lean. They only sent out 14 per month. So between two and I guess like four per week, which was really amazing.

Now lastly, what I think is so fantastic about what Wonder Beauty is doing, is they’re really driving home all of their mobile shopping experiences. Currently, 50% of their business is coming specifically from online, 34% of their business is coming from mobile, and, guys, as we all know, the trend is really towards mobile.

Research has shown by 2020, 50% of all online sales will be done through our mobile phones. So needing to find ways of bridging text messaging, needing to find ways of getting in front of your consumer- yes, that’s you too, fashion startup owners.

This brings me to the last example, which is a company, Kiehl’s, and how they’ve been integrating more AI and more chatbots and more text messaging into bridging their customer loyalty. They partnered up with a company called OrderGroove and what OrderGoove did was help implement a replenishment system using text messaging.

So we all know skincare runs out, you need to place a new order. Well, OrderGroove allowed Kiehl’s to synthesize their customer database and CRM system with the text messaging platform, and this provided incredible results. Not only were they not just emailing customers when it was time to get them back on a product, but a simple text message is actually able to help convert so much higher and getting their customer to be continuously repeating the same purchase. It’s a fashion marketing plan strategy that keeps revenue cycling back in.

So why is that really helpful? Well, obviously, we all know we want to increase customer lifetime values, but it also really helps us when it comes to inventory planning and really planning out those strong replenishment items. So now we actually have a new form of replenishment customer, the mobile replenishment customer.

So guys, what does all this mean in terms of consumer loyalty? How do we build better consumer programs? Well, enterprise businesses, you’re really looking at implementing a multiple-pronged system. You’re looking at only introducing things like reward systems, experiential tying to those rewards, as Nordstrom is doing, but you’re also looking at integrating a lot more technology.

I’ve been hearing so much more these days about retailers implementing new chatbots, implementing new programs in order to drive text messaging, but it’s something that you can’t simply just do and test out and walk away from. This needs to be part of a long-term strategy in order to communicate with your customer.

So that means not just saying, “Hey guys, we’re going to roll out text messaging,” but actually working really, really in a concerted effort with your marketing team to figure out the right kinds of messaging that needs to go out, that really segments those text messaging customers, and that starts to track what their customer spending and what their lifecycle is within the company.

Now, growth-stage companies. I know you don’t have a ton of resources to invest in developing a multi-pronged strategy, but it’s very important that you start to look again at building up your experiential, meaning really building up those loyalty programs. Why is someone wanting to be a part of your community?

Chances are if you’re in that growth-stage phase, you probably have a pretty loyal tribe so far, so thinking about ways in which you can convert those VIPs or those high net worth customers and to giving them better, more specialized experiences. Very, very important.

The other thing you can do as far as that secondary approach is starting to look at what technologies you might want to integrate. Certainly, text messaging, I think, is one of the best ways we can start to convert. It’s still a relatively new strategy though lots of retailers are rolling it out. But when it comes to the conversion rates on text messages, as far as an easy win, growth-stage companies, this is definitely something you want to be on the lookout for.

Now, fashion startup businesses. I know these are a lot of investments. How do you manage experiential as a fashion startup? How do you launch a loyalty program when you’re just trying to get first-time customers, and really how do you start to drive home some of those digital functionalities?

Well, guys, I think the best first step is to roll out initially with a text messaging platform. Texting is now going to be like email software. So before you even think about investing in experiential, I would say, “Hey, out the gate, make sure you’ve got a great texting program.”

You can text them when their products are shipping. You can text them to announce new product releases. I’m really seeing a huge trend towards that mobile interface and getting that customer to jump onto your mobile site, not just through their email, but through text messaging.

All right, guys. Consumers are running rampant. We all know they’re going towards mobile. The biggest question for us is how do we capture their hearts, their minds, and their pocketbooks? Really, guys, experiential and using technology and text messaging, I think, are the biggest ways that we’re going to be able to achieve this in 2019.

Leave us a comment below. We’d love to see what you are doing to implement these strategies into your fashion marketing plan. And send us an email over at hello@scalingretail.com when you’re ready to find out what the right consumer-facing loyalty program will be to help capture that customer for 2019. All right, guys, talk to you later. Bye.

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