Dare to Differentiate | Retail Loyalty Congress 2019 | Amsterdam September 24 & 25th

The time is right to make the physical store the hero

Bruce Kerr explains how to keep shoppers coming back 

The time is right to<strong> make the physical store the hero</strong>

The confluence of bricks and clicks continues to grow as physical retailers buy and code their way to a stronger online presence and digital retailers buy and build their way to a stronger physical presence. E-retailers like Amazon and Alibaba may capture the majority of the headlines in the press, but the ultimate winners in this battle have yet to be confirmed. Meanwhile, traditional retailers are pursuing some innovative ideas and practices to build share of shoppers’ wallets.
 

Case in point: According to recent Nielsen e-commerce data, Amazon’s dominance in digital retail, specifically for consumer packaged goods, is falling. Nielsen reports that during the past two years “established brick-and-mortar stores have taken back share and closed the competitive gap.” The data also indicates that some of the largest traditional retailers have experienced dramatic growth, with Walmart, Kroger and Target increasing their online customer base by at least 90% in 2017 and 2018. Nielsen also reports that the share of click-and-carry sales grew from 4% to 11% of all CPG e-commerce sales in just two years. All good news for traditional retailers looking to stay abreast of customer experience ­expectations.

Many of the opportunities brick-and-mortar stores are now taking advantage of leverage their primary asset — the physical store. The time seems ripe, in fact, to “make the store the hero,” by going above and beyond with new store experiences. Layering promotions; curating in-store event-based experiences; and activating unique, consumer-forward brand partnerships are all rich fodder to attract, keep and delight the in-store shopper. Five basic steps successful retailers are deploying to better leverage the physical store include:

  • Store staff - Make sure your in-house staff and partner reps are motivated, informed and stimulated; they are your No. 1 ambassadors and your greatest connection to your shoppers. When it comes to deploying in-store promotions and programmes, staff that is trained effectively and motivated to complete their tasks can have a huge impact on shopper awareness. We found that up to 90% of shoppers are more likely to buy, buy more and return when they’re helped by knowledgeable staff. Plus, instant loyalty programmes naturally create staff engagement — cashiers, for example, instead of simply taking payment from shoppers, are able to give shoppers something special in return. Use in-store personnel to make the experience unique and rewarding for your shoppers.
     
  • P-O-Ps and displays - The four walls of the store provide a nearly limitless canvas where retailers can experiment and determine the optimal assets to attract and engage shoppers. By leveraging customer data, targeted promotions and customer engagement technology, retailers can customise the physical store to suit the needs and desires of the shoppers, and encourage repeat trips and bigger basket size. This can include dynamic point-of purchase (P-O-P) materials, interactive assets like AR/VR that engage families with children and strategically placed signage to guide cross-purchase journeys. Leveraging your customer data is paramount to driving insight into how your customers shop and experience your store.
     
  • Mass communications - Shoppers need to be shown the same message seven times before acting or reacting. By broadly communicating in-store events, retailers can create the awareness needed for successful promotions. Putting general messaging that will appeal to a wide audience through broadcast and digital channels like TV commercials, radio and YouTube casts a wide net that will attract both current customers looking for loyalty rewards and competitors’ shoppers who are not satisfied with their current incentives.
     
  • Targeted communications and personalisation - Not all customers are the same, and they shouldn’t be treated that way. This begins with understanding each customer at each store and working back through marketing and brand development to enhance the likelihood of brand growth. Use customer data to guide the shopping journey, and identify areas to better leverage personalised marketing. An easy way to stand out can include rolling out new digital loyalty initiatives to better identify and reward the most profitable shoppers. Using a digital app like Bright Stamps will help you break up the herd by creating one-to-one moments tailored to each customer, while providing you with instant data feedback to improve the shopping ­experience.
     
  • Supplier partnerships - Collaborating with supplier partners is critical to the success of any retail marketing campaign, particularly for in-store efforts. The retailer’s relationship with its suppliers can mean the difference between getting the support to run a cost-effective, high-performing promotion that both drives sales of the brand and builds joint loyalty to both trading partners and failure.

The results of deploying these strategies are dramatic. Lowes Foods, a southeastern supermarket chain, created a shopper-centric approach by deploying an in-store continuity programme that rewarded shoppers with high-end cookware for buying promoted items and increasing their spending. Under these guidelines, the company experienced a 65% sales lift in supplier products participating in the promotion and created more than a 10% increase in shopper frequency.

Based on BrandLoyalty’s experience in Europe, Asia, Brazil and Australia, retailers investing in short-term loyalty, continuity and similar programmes that make the store the hero see an average increase of between 3% and 7% in total sales, and an additional 5% to 8% activity from the most profitable shoppers. These programmes have proven success in creating a differentiated and exclusive first-mover advantage for retailers around the world.

Traditional retailers are in an existential battle for survival. By making the store the hero through continuity programmes and similar promotions, they can build the engagement needed to keep shoppers coming back and spending money. The result is the classic win-win-win for the retailer, suppliers and the shopper.
 

Bruce Kerr is president of BrandLoyalty North America and a retail contributor to Mass Market Retailers, where the original version of this article appeared. 

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