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The Retail Apocalypse refers to a stream of brick-and-mortar retail store closures originally across North America. According to Coresight Research, US retailers reported over 9,000 store closures in 2019, which in comparison to the 4,500 opening in the same period, felt like a startling figure. PWC then reported a similar situation in the UK, with 2,868 store closures in the first half of 2019 alone, marking to many the beginning of the end of the once essential high street.

In the UK there has always been historical affection for “high street brands”, so the growing closures are understandably provoking much debate around what is causing the Retail Apocalypse and to what extent it will continue into the new decade. Can traditional stores be saved, and what hope is there for brands who once heavily relied on loyal instore footfall? Again, it is something highlighted by PWC’s report, where they identify the potential that exists for retailers to restructure and account for the demands and expectations of modern customers. Some retailers are already making this leap, trying to engage consumers with more personalised, multi-channel customer experiences. With these offerings, they are edging towards the dynamics behind Retail 4.0.

So what does Retail 4.0 look like? 

It can be described as the provision of an integrated omnichannel experience. But it can entail much more.

It involves retailers moving to a truly integrated IT ecosystem that provides a continuous view of not only inventory, but each consumer and their behaviour across channels too. With mobile phone dependency soaring, it’s important to ensure ease of use and consistency between online and offline experiences. It means more innovation than simply providing a mobile app – Retail 4.0 strategy empowers the consumer.

Does your brand ensure a seamless way of placing orders online, via app or webpage, with in-store pick up? Does your brand make it easy to accurately check stock on the app for a particular location, and use that location to find your way to the store and buy the desired items? Retail 4.0 gives customers no reason to be turned off by the journey from browsing to basket to purchase. It should look like differentiated, meaningful experiences across all channels that sustain the consumer’s own personal preferences when shopping.

Stand out from the crowd

Afterall, the modern consumer is used to (and arguably tired of) brands vying for attention. We all remember the avalanche of emails from brands during the GDPR rush, many of them leaving us questioning when we last got value back from our relationship with any brand. Or even just a positive customer experience.

For today’s connected world it is imperative consumers hand over their personal data for one reason or another. So, it becomes more important than ever to demonstrate the value and personalisation they’d receive in exchange via your brand. If customers provide their information and you can see their habits, make sure you prove that you see them as an individual – beyond just targeting. Personalise communication with them, respond to their behaviours and history, highlight offers more likely to interest them, or partner with organisations that speak to their and your core values. The Retail Apocalypse has arguably stemmed from physical stores not being able to respond well enough to growing consumer needs, and brands not being able to keep up with innovative, engaging experiences at every touchpoint. These next steps towards recovery are vital for reviving consumer interest.

Recapturing attention and affection

Retail 4.0 is ultimately about placing the consumer at the centre of business operations so brands can respond accordingly to real-time trends and demands, resulting in exceptional and engaging experiences when executed correctly. Consider IKEA where through augmented reality (AR), app users can see what a life size item would look like in their home. It’s a great example of how retailers can harness the power of emerging technologies to create relevant, meaningful experiences for their customers – rather than implementing a gimmick for the sake of it. Apple stores are launching displays that invite shoppers to learn more about iPhones by scanning the devices with their own phone. They can then see the advantages or functionality of the different hardware or software – so you can personally interact as a consumer and find something that suits you. It speaks to the inquisitive side of consumers and works towards winning round hearts and minds.

Looking ahead, it will be interesting to watch these trends develop. How will retailers leverage different in-store experiences as part of a multi-channel strategy? What advancements in the use of emerging technologies will we see, particularly as they become more easily attainable? It begs the question; will the traditional high street revive and make it to Retail 5.0?

Brands today are constantly fighting for consumer attention and profitability in an era of constant change, connectivity and competitive challenge. And of course, customers today have the ultimate power in all of this – the power of choice.

Choice isn’t entirely rational; it is as much about the emotions that customers feel at any given moment as it is about making a rational decision based on the product or service being offered.

With the variety of choice available to consumers in both the physical and online world, it is more important than ever that retailers invest in designing a great customer engagement and experience.

With next day and even same-day deliveries from online retailers, how do you convince potential customers that going to the store will offer them a better buying experience? And how do you convince them that your online offering is better than other, more established online retailers?

 

Strong brand loyalty takes time to build and grow, but small changes can have a huge impact. Studies have shown that an increase of just 7% in loyalty can have an 85% impact on profit per customer!


Omnichannel
The same way having one single view or profile of a customer is crucial for brands, having one perception – whether in store, online, or through a device – of a brand is important for building a connection with consumers. Loyalty schemes, prices, offers and ranges should be the same in-store as they are online (as far as possible). Stores that, for instance, offer a price match that includes online prices in other stores, will always have an advantage over those that don’t.

Seamless and Easy
Any difficulty the customer has either finding what they want or purchasing at the point of sale will put them off returning. 55% of consumers surveyed for marketing research in 2016 said that their top reason for satisfaction after a purchase was “Purchase experience (whether online or in person) is easy”. This was followed by “Purchase experience (whether online or in person) is enjoyable” (46%). Consider your employee engagement in store, or the user journey design when building a digital experience.

Personalisation & Relevance
Consumers want to feel that the experience is about them, not about making profit. Personalised shopping experiences can help. In fact, research suggests that 79% of consumers will make decisions on where to buy based on the level of personal service they receive from assistants. From greeting costumers online with their name, to creating custom offers that are unique and relevant to their shopping habits, to offering personal shopper services in-store can all help to make the customer feel they are the centre of the experience.

Enjoyment & Entertainment
Consumers are looking for something that is unique, be it online or in-store. You have to consider what it is that they can get from you that they can’t get anywhere else, be it the products that you sell or the level of customer service and personalisation that you can offer them. And make it enjoyable. 63% of people surveyed who were members of loyalty schemes said that they would modify their buying habits based on how enjoyable the experience is. Does your instore experience inspire customers? Does your app or website keep its users hooked?

Service
Nothing is more off-putting when in a physical store than surly uninterested staff. One of the unique points about entering a shop is the contact that you have with real people. If those interactions are negative, then the customer will be less inclined to return. An engaged, enthusiastic and knowledgeable employee is key to good customer experiences in-store.

Values
What values do you uphold that customers will feel emotionally engaged with. For instance, do you take a stand against plastic waste, do you support charities. These kinds of “extracurricular” activities are important to up to 70% of consumers!

As digital continues to become the norm, retailers with “traditional” card based, point collection loyalty schemes are feeling the push to evolve. In a world where people carry a supercomputer with them at all times, the idea of a plastic card in your wallet can feel dated. Looking at the recent changes in the market, a number of retailers certainly agree, and are in the race to update and enhance.

Loyalty in the news

Sainsbury’s, for instance, having bought Nectar are looking to make their whole loyalty scheme app based. That is not the only change they are making either. In an attempt to move away from blanket discounts, they are looking to reward people based on their frequency of visits and how long they have been a customer. This is a big move in a world where most are used to just being rewarded directly in line with what they spend. It feels much more in line with the definition of ‘loyalty’ the average customer may have too. They are also testing a “choose your own reward” system to give loyal customers a new level of choice and personalisation.

In light of the news of Sainsbury’s and ASDA joining forces, it will be interesting to see what happens, considering ASDA have always shied away from loyalty programs!

What makes this even more interesting is that Waitrose recently cancelled a similar scheme. They gave their customers the opportunity to choose 10 frequently purchased items to get discounts on. However, the feedback they received showed them that many found this to be confusing. Waitrose has now simplified the system, choosing to move to a tailored discount system instead.

The moves aren’t just towards ‘simple, fast, digital’ though.

Tesco invested a great deal into updating their card-based scheme over the last few years, moving to contactless to create a better customer experience. In their attempts to simplify their offering, they have drawn anger from shoppers at how fast the changes are coming into place.

So, what does it all mean?

It is safe to say that these examples and the many others out there represent some large shifts in how loyalty schemes will work, but it is not the core mechanics of point collecting changes that are interesting. It is the potential reasons behind the changes that offer more insight.

The varying approaches and ‘snakes and ladders’ feel to the changes, arguably represent a market trying to get a read on their audience. What do the masses unanimously want? Choice? Simplicity? Digital? One of the main reasons cited for the changes is simplification of the service, a very customer-centric concept. Given too much choice, people can falter and feel overwhelmed (the Paradox of Choice). The average consumer needs to understand the point behind, well, collecting points and the rewards can’t feel so out of reach that they give up and disengage with the scheme.

The alternative, as some have chosen, is to create offers that are personalised based on past shopping habits. This still offers the customer value but does overload them with excessive or overly complex choices. It is also a step closer to rewarding people for being them. “Dave, we appreciate your contribution as a customer, so enjoy something you want.” Simple, but it is a way of letting people know their value, which is a powerful loyalty drive.

Loyalty & Engagement

This more holistic style of engagement and loyalty can still include the traditional points collecting and incentives, but that is just one part of the puzzle. We are seeing a shift towards businesses using their knowledge of the customer to create a better overall experience. Rather than just saying “Buy this and we will give you that”, they are saying “How can we make buying this a better experience for you?” This can take many forms, from the better use of the pure loyalty-based schemes to the customer service in the shops themselves, moving some of the responsibility for loyalty to the staff themselves.

Loyalty is not about money, club cards or even quality and service. It is about all of these things together designed around the customer. It is a relationship where the customer feels valued and feels they are getting value, where there is mutual trust.

True loyalty is like true love. It’s irrational, hard to find and needs constant effort to maintain!

Everyone seems to have a loyalty scheme these days, from local sandwich shops to global retailers. Just look in your wallet or your purse and count how many loyalty cards you have in there!

Research by Nielsen for their Global Retail Loyalty Sentiment report showed in the UK 89% of people say they have a loyalty card of some type, with an average of 3.6 cards per person.
This doesn’t even consider loyalty apps, which are on the rise as well.

As specialists in the field, this leads to us questioning what loyalty in this context really is and what it should be. If you look at the stats, you see more than half of those belonging to loyalty schemes state financial incentives, such as discounts, are most important to them. This makes you ask a difficult question, are they truly loyal or is their loyalty really being bought? If another store offered better discounts, would their allegiances change?

We are seeing more and more retailers using data to help drive more people-centric loyalty programs, creating more personalised discounts and offers. The days of being sent a generic discount coupon for nappies when your kids are in their teens are becoming a distant memory in many instances.

Where large amounts of data are not available, we see at least see more flexible approaches to loyalty schemes being implemented. Rather than having specific discounts target at a customer, they are given the choice of what they may like to spend their loyalty points on.
Other brands are taking this to new heights, offering apps that function more like games than a way to monitor your profile, inviting users to participate in competitions, quizzes and even treasure hunts to earn prizes.

At Motivait we view loyalty as a relationship between you and your potential customer. Like any relationship, it should not be taken for granted. It also needs to be worked at constantly, never accepting a one size fits all forever approach. Through the combination of traditional loyalty, good data and well thought out gamification, we aim to create deeper and more meaningful experiences for your customers.

Your loyalty scheme needs to stand out from an ever-increasing crowd. Can you, hand on heart, say yours does? Our platform has been built with this need in mind, including a range of potential features covering simple rewards through to complex gamification, all with the customer experience at the core. Not only that, it has been designed with full GDPR compliance in mind, something that every retailer needs to have by May 2018.

The next generation of loyalty is already upon us, don’t get left behind, start building those personal relationships with your customers now.

What, Who and Why?

Coming to a cinema near you, 25th May 2018, the General Data Protection Regulation (GDPR) is the EU’s new addition to its current Data Protection rules.

It has been designed to put people back in control of their data, creating a shift of power from the organisation to the individual (a consumer-controlled world of privacy), and is in keeping with the general move we’re seeing across society of PULL rather than PUSH. Read more

All professionals specialising in customer relationships are aware of the importance of loyalty in the strategic running of business. As a result, Marketing teams spend much time and efforts working to develop tools that establish and enable loyalty interactions.
Among these, Loyalty Programs are arguably the most frequently implemented method used by brands to encourage repeat sales and customer support. Essentially designed to reward clients for choosing particular products or services over the competition, Loyalty Programs do often generate purely economic or extrinsic benefits. Read more

Call me needy, but I’m looking for an upgrade when it comes to customer loyalty. I’m not looking for it to just be prettier or faster and I don’t need it to be on an app. I’m not even unhappy with the current loyalty programs I’m enrolled in. To be honest, I’m a little detached from them and their offerings. I’m not fully active on most and only really signed up for the offer that was on offer that day. You could say I’m looking for love, not like, when it comes to committing to brands. So now I’ve saved all my points up and I am ready take the next step in loyalty, and I’m ready for brands who are going to give me that meaningful, long-lasting, sweep me off my feet kind of feeling. Read more