retail customer engagement

Retail Relationshipping: Who’s “Besting” the Competition?

If you study these retailers, you also find that they are keenly focused on forging relationships with their customers.

Two things have impressed me lately.  First is the Amazon commercial about “Practice Safe Spending” in which Mom tells her full-price-spending daughter to shape up with safe spending, ending with the daughter asking Mom, “What is bang for the buck?”.  Here is a link to it on YouTube: Savings Talk – YouTube

Perfect for these times, right? The commercial is a direct attack on full price, of course, but also – as since day one – on shopping at retail.

By George Wiedemann

The second thing that impressed me is the release by of “Fastest Growing Retailers in 2021” being based on data from the NRF (National Retail Federation), which you can find here: These Retailers Enjoyed the Fastest Growth Last Year – Marketing Charts

The connection for me between these two things is that the top performing retailers listed – take Burlington, T.J.Maxx and Five Below for instance – are focused on low prices, bargains and frankly “best bang for your buck”.  In these times of inflation putting the squeeze on family budgets these retail performance results make a lot of sense.

There are many factors for these retailers performing well, such as mall re-openings and COVID restrictions lifting.  But if you study these retailers, you also find that they are keenly focused on forging relationships with their customers.

The other top player in the NRF data was the DTC company  I’m including them here because of the excellent job they do of Relationshipping, particularly with their online chat with a real person.

Using these four top players as examples (Burlington, T.J.Maxx, Five Below and I would like to record here what are their basic elements of customer engagement (meaning digital and other non-in-store connections). For in-store connection, having recently visited Best Buy to purchase a new flat screen, I will comment on their in-store customer engagement practices.

Before addressing the customer engagement practices of these top retailers, allow me to comment at a high level on Brand Marketing and Performance Marketing.  In every consulting assignment over the past two years, I have discovered an imbalance between these two things.  The big picture is that brands are using too much Brand Marketing spending to create awareness and drive traffic without enough attention to, and spending on the Performance Marketing side.  The bad result of this imbalance is that a significant chunk of the brand’s leads get harvested by competitors having more effective performance marketing in place.  My advice is to reverse the priority there, spend what is required to have excellent harvest from Performance Marketing and then cover that well with the Brand Marketing.  Don’t generate leads for your competition.  With the balance right, and Performance Marketing up to snuff you can harvest some of your competitor’s leads.

Here are some fundamental basics for Retail Relationshipping:

Key Site Practices

  1. Engagement Incentives: visit H&M and the home page up top promises you 15% sitewide off if you subscribe to email. This was prevalent at retail websites and indicates that a flow of emails with offers generates good business in addition to keeping the relationship alive and well.
  2. Deals: the Burlington home page puts best product/price right up front to stimulate purchase. In our new 24/7 connected world there is amplified impulse buying.  Put your best offerings up front.
  3. Discount Codes. That you see these used everywhere tells you they work.
  4. Loyalty Cards: the top of the H&M home page banner promises you 10% off your first purchase if you become a member, and they send you a loyalty card. A common feature at many top retailers is that by presenting your loyalty card at checkout, you accumulate points good for future discounts and deals.  Some loyalty cards give you immediate savings at checkout.  As a loyalty customer you have an account, and online you can look at the scope of your relationship with the retailer.  These cards create a shopping habit in the store to present them at checkout, and thereby strengthens the relationship.
  5. Gift Cards. H&M has e-gift cards, physical cards, corporate and bulk cards.  These top retailers all have gift cards. This is a bit like influencer marketing in that the customer may gift someone who becomes a new customer.
  6. Credit Cards. Burlington offers 10% off first purchase for taking their card. This forms another bond with the brand.
  7. Hybrid Model Purchase. In addition to buying in store, you can order online and pick up, or order online and have it delivered.  If a retailer really wants to compete with DTC and Amazon, it is important to move to this model.

I visited to check out the experience and get some insight into why they did so well.  In wanting to buy my wife some Sauvignon Blanc (her favorite) the chat box popped up and I engaged there with a real person who took me through inventory based on my inputs – New Zealand wines not as expensive as Cloudy Bay, but with similar taste.  Not only did she identify the Marlborough region where those wines come from, she took me through their inventory that could be delivered to my state.  The experience was so good that I ordered a case (and top of site was a code for a 10% discount on a purchase over $200).

Retailers pay attention: this was a superior experience to shopping in any wine store in my shopping radius (we use three or four).  If I owned a retail store and had enough scale to consider it, I would test having a live person chat function on my site.

Last, let me talk about an in-store experience at Best Buy, which I visited recently for a new flat screen.  I was greeted at the door and asked if I wanted an advisor.  Saying yes, the greeter had me go to a certain aisle where I was greeted by my advisor.  He helped my pick the right screen, and then escorted me to the Geek Squad window where it was easy for me to engage them, realizing that I was not going to mount this on my wall at home expertly.  The experience was superior, the product right and Geek Squad did a professional job getting it up and running.

Hopefully these retail anecdotes have given you some ideas. Sometimes hearing industry information just confirms that you are doing the right things.

George WiedemannGeorge Wiedemann was founder and CEO of Grey Direct for 21 consecutive years of worldwide growth; CEO of pioneer Silicon Valley email platform Responsys; and CEO of The DRUM Agency. He is founder and CEO of Relationshipping Consulting, focusing on bringing efficiencies to large-scale enterprises through deep budgetary analysis and process alignment. George is also a frequent contributor to TheCustomer.

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