4 marketing lessons from retailers who are mastering the customer experience
Get inspiration from retailers who have focused their efforts on CX and adapt those learnings to better engage your own audience.
I don’t need to go into detail on how fierce competition is for digital marketers in the retail space. They are constantly determining how to outmaneuver other retailers and better engage shoppers.
Simply spending more to box out competitors is not the long-term answer – nor is it viable for most retail businesses. The solution is to simultaneously invest in more personalized marketing approaches as well as the customer experience. That’s because investing in the customer experience cycles back into propelling the effectiveness of your marketing and advertising efforts.
A renewed focus on the customer experience is what will define successful retailers moving forward. Here’s a look at four retailers excelling in key areas of the customer experience, and the marketing lessons to learn from each of their approaches.
Excelling in: Loyalty programs
Loyalty programs have become so commonplace that many retail marketers treat them like a checkbox without thoughtful execution and continued optimization. These programs usually exist in the form of coupons for first-time shoppers and other generic incentives in exchange for signing up to receive the retailer’s newsletter.
The more successful loyalty programs prioritize personalization, audience segmentation, and messaging. A good example is the Ultamate Rewards Program from Ulta, which closed out 2019 as the top-performing stock in the S&P 500 Retailing Index, beating out Amazon. Ultamate loyalty members drive more than 95% of the company’s total revenue.
The reason Ulta has seen so much success? The retailer uses its loyalty program firstly as a communication tool to build and maintain relationships with customers. The program is designed to reward shoppers for allowing the retailer the opportunity to build something more than a transactional, “check out as guest” interaction. That more personalized experience is a major reason why Ulta has seen success in the competitive retail environment.
Moral of the Story: Treat loyalty programs like a relationship channel first, and let the revenue acquisition follow.
Excelling in: Social consciousness
The rise of social consciousness has paved the way for brands to take a position on issues that matter to their company, while simultaneously building a deeper connection with their customer base. The retailers doing it best have built social consciousness into their DNA.
Take REI, for example. Social consciousness permeates everything it does as a brand. Its Product Sustainability Standards hold the company and its brand partners accountable for supporting social responsibility and environmental stewardship. It prioritizes the use of recycled and other sustainable materials in its products. And perhaps most unforgettable is when REI began closing on Black Friday to encourage employees and customers to spend time outside. Social consciousness anchors REI’s values and those of its customers.
From a marketing perspective, REI again leads with social consciousness. This core value is at the forefront of the retailer’s #OptOutside campaign, thousands of outdoor guidebooks, volunteering events, and email messaging, which constantly encourages shoppers to get outside. REI’s strength in social consciousness translates to strong and cohesive marketing messages.
Moral of the Story: Sidestep the race to the bottom on factors like price and shipping and instead win customers through shared core values.
Excelling in: Retailtainment
The concept of retaintainment has taken off with the reinvention of brick-and-mortar retail. Many shoppers have grown to tolerate stores with lackluster product displays, limited selection, and poor customer service. But the retailers that flip this experience on its head are taking brand building and sales to a new level.
For instance, American Girl is a standout retailer when it comes to store experience. Its flagship, 40,000 square foot store in New York City is retailtainment at its best. Young customers and their dolls can get makeovers and have birthday parties. The custom design shop lets children customize their doll outfits and find clothing for themselves.
Children can then share pictures of their experience on social media, parents can sign up for rewards—there is a strong marketing connection to the memories the shoppers created in-store. In this case, marketing can gain effectiveness from building off the retailtainment experience, while also reinforcing that experience to keep customers coming back.
Moral of the Story: Strengthen shoppers’ positive memories of your brand by reinforcing in-store experiences on other marketing channels.
Excelling in: Augmented reality
While the extraordinary store experience is setting brands apart offline, augmented reality (AR) is playing a growing role in transforming the experience online. Furniture and apparel are two areas of retail that especially stand to benefit, given the historical friction around purchasing these items online. Shoppers often want to touch, try on, and try out these items before buying them.
For example, IKEA is one of many retailers using 3-D imaging and AR technology to allow customers to visualize products in a room in their home. IKEA’s Place app lets shoppers position multiple items inside a room, and see how various combinations of items will fit and look, all while leveraging the retailer’s vast inventory. It’s technology like this that has made the furniture category one of the fastest-growing retail categories online in the last few years.
Similarly, 3-D body imaging technology is poised to dramatically reduce the friction of shopping for clothes online, while also mitigating returns by helping consumers make better decisions about size and color. Augmented reality done right can bring your product catalog to life, and play a direct role in supporting the purchase journey.
Moral of the Story: Overcome friction inherent in online shopping by attaching AR directly to buyers’ decision-making process.
In summary, digital marketers in retail have a growing stake in the customer experience. The success of their efforts will increasingly depend on the quality of experience that their business provides to customers. As always, differentiation remains critical. Get inspiration for retailers who have picked their battles and adapt those learnings to better engage your own audience.