Views
5 months ago

Jeweller - April Issue 2018

MANAGEMENT DATA CAN

MANAGEMENT DATA CAN BOOST CUSTOMER LOYALTY AND SALES RETAILERS IN SEARCH OF WAYS TO BOOST LOYALTY AND ENCOURAGE REPEAT SHOPPING NEED ONLY LOOK TO THEIR EXISTING DATA FOR ANSWERS. EFFECTIVE CUSTOMER LOYALTY STRATEGIES CAN LEAD TO EXTRA SALES. BRYAN PEARSON REPORTS. According to a 2015 study from loyalty and customer engagement firm Colloquy, the average US household enrols in 29 loyalty programs but participates in just 12 of these. Perhaps this is because there are too many loyalty programs or perhaps consumers perceive that the rewards aren’t worth all the extra effort. Whichever the reason, it’s hard for retailers to build loyalty if their customers aren’t even interested in their loyalty programs. The time has come for a loyalty revamp. Here are five expert secrets that can be used to drive loyalty and bump up business. LET CUSTOMERS DRIVE When it comes to developing or revamping a loyalty program, retailers shouldn’t overlook their most valuable information resource – their customers. Chip Bell, senior partner of customerexperience consultancy the Chip Bell Group, says retailers rarely ask their customers what motivates their loyalty because they assume they already know. “Customers are constantly changing; today’s fad is tomorrow’s antique,” Bell says. “Start a loyalty program by asking customers [what they would like to see in loyalty programs]. Look at the theme of frequent customer complaints as a path to the opposite end of the spectrum; it can reveal what matters most.” START PERSONALISING Once the foundation of a good loyalty program is poured, it’s time to use the data but knowing how to put it to good use is one of the challenges of loyalty marketing. Retailers have a wealth of data on their shoppers but they often don’t know how to interpret it. This makes implementing a targeted rewards program difficult. According to Debjyoti Paul, assistant vice president of digital business at Mindtree, an IT-services consultancy based in India and MORE THAN NINE IN TEN BABY BOOMERS (93 PER CENT) FEEL OVERLOOKED AND INADEQUATELY REWARDED, ACCORDING TO ICLP RESEARCH PRODUCT ASSORTEMENT IS A KEY FACTOR New Jersey, “The first step is to clean up the loyalty data to uniquely identify each shopper and form a basic profile [for each customer] that is trustworthy.” Once this is done, profiles can be expanded with personalised data. As a customer profile swells with information, retailers can then customise offers to match unique preferences. TAKE A BREATH ON BREADTH Product assortment is a large factor in luring shoppers back in store. Inventory is often derived from loyalty insights but striking the balance between too much and too little is arduous. Total-store optimisation helps retailers assess the necessary breadth and depth of various categories. “Consider the yoghurt category,” explains Graeme McVie, vice president of business development at retail analytics firm Precima. “How many flavours of yoghurt are required versus how many sizes versus how many brands? Now contrast this with the spices category where breadth is required but not depth – there are lots of different spices but not many types of oregano, for example.” This strategy enables retailers to align the depth and breadth of each category with the needs of shoppers. Then they can ensure the correct amount of shelf space is allocated to each category. CUTTING PRODUCT CAN CUT PROFITS Inventory is directly linked to loyalty and retailers should be careful before deleting slow products. Advanced analytics and loyalty data can unearth hidden value in items that may be slow sellers, according to McVie. “Retailers often rank and yank when evaluating their assortment; that is, they rank all items in their category by sales and de-list the bottom performers,” McVie continues. Instead, he believes retailers should consider an item’s true value and customer importance when making decisions. An item’s true value is calculated by taking the total sales and subtracting the sales of any substitute items, which are items that shoppers would buy if the original item was no longer available. Then add to this figure the sales of other items purchased solely because they complement the original item. This true value shows retailers that the removal of an item can cause flow-on losses. When stores fail to offer alternatives, customers are likely to take their entire baskets to another retailer. DON’T FORGET THE BOOMERS Retailers are right to target Millennials, particularly through mobile communications; however, if those retailers fail to offer the same opportunities to Baby Boomers, they could miss significant opportunities. More than nine in ten boomers (93 per cent) feel overlooked and inadequately rewarded, according to ICLP research. Consequently, they are less loyal. These five loyalty tips may not be secrets, but they do offer insights into how to generate loyalty. Retailers looking to boost their return visits should use some of the above. i BRYAN PEARSON is president and CEO of LoyaltyOne and a retail contributor to Forbes. Learn more: pearson4loyalty.com 34 Jeweller April 2018

MARKETING & PR TRENDS: MEASURE THEM OR MISS OUT IN-STORE DATA CAN SHOW RETAILERS THE NEXT EMERGING TRENDS, PROVIDING THEY KNOW WHERE TO LOOK. IT’S A SKILL THAT’S WORTH LEARNING, EVEN IF IT MIGHT SEEM LIKE A CHORE IN THE BEGINNING. DAVID BROWN REPORTS These days, business is all about big data; the industry is inundated with hordes of information that was never available to retailers from previous generations. Although this information can be invaluable for its ability to shape the decision-making process, the sheer quantity of it might overwhelm retailers. Using the information that comes from a POS system can be a helpful way of spotting the trends a business is encountering, enabling that business to react ahead of competition. The fashion industries are experts at trend spotting; top designers will spend thousands of dollars sending experts all over the world to find trends. It’s said that the fashion industry is capable of predicting what styles consumers want to wear before consumers even know it! This early insight is essential due to the constantly changing nature of their product. Although aspects of the jewellery industry’s product lines are consistent year-to-year – diamond ring designs don’t change as quickly as clothing choices – there are still trends that shape what customers like to buy and these change over time. How does trend spotting work for a business owner? The amount of information available in the average store might be surprising, especially when this information can help retailers to spot current and upcoming trends in their businesses. From sales reports to inventory-ageing and stock-imbalance statistics, there is a sumptuous array of reports that can improve a retailer’s ability to spot trends. So much information, in fact, that those retailers who aren’t spotting trends are possibly not using their data effectively. A deep curiosity is necessary for any owner who wants to play the role of trend spotter but it’s a skill that doesn’t come easily to STOREOWNERS CAN’T MANAGE WHAT THEY’RE NOT MEASURING. IT’S DIFFICULT TO SPOT TRENDS USING ONLY BAD DATA AND IMPOSSIBLE TO SPOT TRENDS WITH NO DATA DON’T OVERLOOK POSITIVE TRENDS everyone. Here are some common mistakes to be avoided to ensure the best possible chances of spotting trends early on. LACK OF A GOAL It’s one thing to look at a line on a graph and say, “Hmm, this seems to have changed course slightly.” It’s another to say, “This was expected to move toward 25 per cent and it’s only at 15 per cent.” Having an expectation makes it easier to identify when a trend has changed. This is especially important in the case of negative movements; retailers who don’t recognise these might be late to make stock changes, costing them time and money. If it’s a positive trend that is overlooked, retailers might record opportunity costs because they didn’t capitalise immediately upon emerging styles. BAD INFORMATION Storeowners can’t manage what they’re not measuring. It’s difficult to spot trends using only bad data – and impossible to spot trends with no data. Make a commitment to getting the data you need to know how the business is doing on all fronts and then create a roadmap to establish a reliable stream of information. Determine the necessary reports that will provide the business with the key information it needs. WEARING BLINKERS All retailers have different orientations to life and this reflects in the expectations they set their businesses. These expectations can create biases that affect the way retailers interpret and/or pick up on trends. What biases might you bring to the way you interpret your data? Are you an optimistic person? If so, you may want to complement that perspective with someone who has a different view so that you are looking for trends with a well-rounded perspective. After all, it’s very difficult to see that which you are not seeking. Trend spotting should be a part of every store’s employee feedback loop. Regularly collecting information from the sales team can provide valuable feedback into what customers are buying and what items no longer interest them. Combining data with anecdotal opinions from the sales floor can help businesses to stay ahead of the competition and keep product lines on trend for much longer. Retailers that can avoid the mistakes above and bring a healthy dose of curiosity to big data will be amazed by what they uncover about their businesses. Stores already have access to a mine of data that will provide owners with the answers they need. i DAVID BROWN is co-founder and business mentor of Retail Edge Consultants. Learn more: retailedgeconsultants.com April 2018 Jeweller 35