Holiday Prep:Customer Engagement Takes Center Stage

SPECIAL REPORT:

Special Report :

There’s no question about it: Shoppers will have more options than ever before when it comes to shopping this holiday, from where and how they shop to how they pay. Given the myriad of choices available, experts agree that one of the keys to a

successful holiday season — and long-term survival — is customer engagement. By giving shoppers easy access to more customer touchpoints using both personal and

store-level proprietary devices, retailers will be in a better position to drive customer relationships and sales. Here are some examples of how retailers are using innovative solutions to increase customer engagement:

l Geo-location-based Mobile Marketing The proliferation of smart mobile devices has changed the retailing paradigm, as

shoppers access e-commerce sites, social media, online customer reviews and even pay for purchases right from the palms of their hands.

By integrating a mobile platform that allows retailers to interact with consumers through their own personal devices, chains are inching closer to the “holy grail” of one-to-one personalized relationships. Geo-location-based marketing messages can help achieve this goal.

Austin, Texas-based University Co-op, which operates on the University of Texas campus, has deployed Digby’s mobile marketing platform, Localpoint, an opt-in program that delivers targeted messages to shoppers when they check in to the store, as they move through the space and when they scan bar codes and read reviews.

Shoppers download “The Co-op” app and the device’s GPS interacts with University Co-op’s SSID (service set identifier), or a name assigned to the retailer’s Wi-Fi network, creating a geo-fence. When the app is launched, the geo-fence detects a smartphone user’s proximity, and as they approach or enter a store, the app delivers personalized messages that can be stored in the app’s “offer wallet.” To redeem offers, customers simply click on their desired promotion and show the screen to the cashier. The app is available for both iPhone and Android smart devices.

Localpoint’s analytics tool gives the retailer insight into repeat visits, unique visitors, bar-code and QR code scans, offer redemptions, and time spent at each location. The tool determines patterns, and measures the economic impact and success of marketing initiatives.

“This is a fresh strategy and we are already seeing a significant impact,” said Brian Jewell, University Co-op’s VP marketing.

Spotlight on Innovative Solutions

l “SoLoMo” LoyaltyWhen apparel retailer Guess?, Inc. was ready to launch its exclusive loyalty program,

it decided to tap into the power of a social-local-mobile (SoLoMo) strategy. A concept that evolved through the popularity of smartphones and tablets, SoLoMo

integrates geo-location and the use of social media to allow retailers to gain a more intimate relationship with their shoppers.

“When retailers ask too much of their shoppers, loyalty tends to drop,” said Michael Relich, CIO and executive VP IT, Guess, Los Angeles, which operates 503 stores in the United States and Canada and 264 stores in Europe, Asia and Latin America. “By tying social media with our CRM [customer relationship marketing] database, we have access to more information than we could ever capture on our own.”

The retailer invites shoppers to download its mobile app to gain access to accrued loyalty points connected to previous purchases, new arrivals, a store locator, a gift-giving guide, a QR code scanner for merchandise scans and to receive geo-location-based promotions. If they link their personal Facebook account to the app, a token within Facebook gives Guess access to shopper information and navigation across the Guess fan page.

The company also aligns this information with a CRM database in the cloud “to do analytics on customer preferences and trends,” Relich explained. “Facebook allow us to learn about our customers and successfully do micro-segmentation.”

l The Next-Gen of FAQs (Frequently Asked Questions)

A retailer’s e-commerce site is often an omni-channel shopper’s first stop in the path to purchase. Details such as price, item attributes and even customer reviews are often available, helping to shape her overall decision. However, sometimes consumers need a deeper insight into merchandise.

Adorama, a New York City-based photography and related accessories multichannel retailer, improved the user experience of its website in time for last year’s holiday season. Its updated site design > features tools that help shoppers make better buying decisions, including buyer’s guides, gift-finder tools and a new question-and-answer tool from TurnTo Networks, New York City.

“Customer service is important all year long, but most importantly, during the holiday season,” said Glen Holman, CIO for the multichannel retailer. “Some shoppers troll forums and customer reviews to get answers about merchandise, but we go one step further. Our shoppers have specific technical questions, so we offer a community that can answer specific questions.”

When shoppers click on a product, they see an “Ask a Question” icon on the product’s page, which allows consumers to pose a question by clicking on a “Discuss” button. The question is sent out via email to other shoppers who have purchased the item in question. As responses come into the TurnTo tool, they are forwarded to the shopper via email and also posted on Adorama’s site.

Adorama has been using the tool for almost 12 months, and during testing, the emails had a 9% response rate, with consumers receiving an average of 4.3 answers per questions. A majority of these answers were received within 24 hours.

While other companies rely on FAQs or live chat to deliver immediate responses, these options are better suited for more common, general questions, such as those about customer service or sales information.

“Our incoming questions are very detailed and specific about our merchandise, how it works and functionality,” Holman explained. “Allowing them to ask specific questions and giving them detailed responses are big advantages over static reviews. We feel we are building communities around specific mini-topics.”

l Digital Signage Eager to help shoppers make educated purchase decisions and find their desired

product, more retailers are adding innovative digital signage solutions to in-store customer engagement strategies.

“While e-commerce is a strong piece of the [omni-channel] retailing equation, chains need to ensure their store-level experience reflects the ease and convenience of shopping online,” said Corbin Webster, an IT contractor who is currently working on projects for retailers, including Kroger and Kohl’s. “Deploying digital signage can help retailers keep the customer engaged and streamline the shopping experience.” >

SaskTel, a Canadian-based wireless retailer, knows this challenge first-hand. The popularity of smart technology keeps its 11 stores buzzing with shoppers, but long waits to complete transactions were impacting the overall customer experience. When the company began a three-year store redesign program, it put consumer-centricity at the top of its priority list and chose digital signage as a means to deliver consistent information across the chain.

“The screens broadcast wireless rate plans, accessories, as well as static promotions, information that is paramount for shoppers make better purchase decisions,” explained Joel Ganong, marketing manager, SaskTel.

Currently, four digital screens feature product information, as well as up to six 42-in. monitors that display advertising messages.

Since installing the digital screens last spring, Ganong reported that SaskTel has increased sales by an average of 58%, compared with stores not yet using the electronic signs. n

Timberland’s Real-Time Digital InterfaceTimberland has launched a new, interactive store concept in select locations around the

globe that integrates digital signage within fixtures to engage — and create more meaningful connections with — customers, inspiring them discover the great outdoors with Timberland gear.

The concept uses a custom open-source, cloud-based content management system to drive real-time digital signage content at multiple touchpoints across the store. It allows Timberland to add and tag assets for immediate integration, all while being managed and monitored from a central location.

The system is unique in that it is designed to adapt, capture and learn from each store globally, providing unique, location-specific content to individual stores, while inviting customers to provide meaning ful feedback about Timberland products and initiatives that can then be converted into meaningful data for the brand. The retailer’s global creative services group partnered with Apologue Experience Design Firm to create the interactive experience.

Retailers looking to add sparkle to this year’s Christmas season may want to take a new look at their gift card programs. Last year, more than half of consumers bought at least one gift card for the holidays, according to a report from First Data Corp., an Atlanta-

based e-commerce processor. Indeed, consumers seem to be taking more of a shine than ever to these types of spending vehicles.

“The average value of a closed loop card purchased in 2011 rose more than 23% year over year, from $34 in 2010 to $42 in 2011,” according to the First Data report. (A closed loop card can be used only at a specific store. An open look card, issued by credit card providers, such as Visa and American Express, can be used at any store). The reason for consumer interest? Choice: Sixty-five percent of participants in a First Data survey said they valued the ability to select their own gifts. > “More than half of consumers would prefer to receive a $25 gift card than a gift valued at $45,” according to the report.

The message for retailers: Launching a new program or fine-tuning an existing one might pay off. Here are some tactics to consider:

l Go virtual. “Offer e-gift cards where possible,” suggested Shelley Hunter, a San Francisco-based gift

card consultant. “The ability to send a gift from your phone gives the customer a way to quickly take care of last-minute gifts.”

Indeed, a report by digital gift card company Giftango Corp. noted that fulfillment of a gift card purchased from a retailer’s website generally takes three to five days from time of order to mailbox delivery, with the time frame even longer the week prior to Christmas.

The report, “A Case for Digital Gift Cards: eGift Cards Turn Slowest Gift Card Sales Days into Busiest for Retailers,” found that gift card sales decline dramatically starting nearly two weeks before the gifting event.

However, this trend is reversed when instant digital delivery is presented as an option, according to the report. It found that the highest gift card sales days for retailers that offered both delivery options was Dec. 19, a full week later than the highest sales days for retailers that offered only plastic delivery.

Update on Holiday Gift Cards

l Incentivize the staff. “Reward store personnel who make gift card sales,” suggested Bob Phibbs, a retail consultant

based in Coxsackie, N.Y. “Individuals on a commissioned sales team usually only get credit when gift cards are used, which can lessen efforts to sell them.”

l Liberalize return policies. If the recipient of a gift card buys something they end up not liking, will you refund their

purchase or only issue a new gift card? You might prefer the latter option, but it can disappoint your customer. “You don’t want your employees angering customers about what the store can’t do with a gift card,” Phibbs noted.

l Encourage reloading. Only 9% of consumers reloaded a gift card they’d bought or received in the past year,

according to First Data. Punch up that figure by offering cash bonuses or free items each time a customer adds cash to a card.

l Offer gift card substitution. Is a certain item out of stock? Post a “purchase gift card instead” sign at the in-store display,

or on your website catalog. Train all the staff to offer gift cards when items are stocked out.

l Add value. Many people still hesitate to purchase gift cards, looking upon them as cold and impersonal.

Warm things up by offering exciting combinations of cards and small merchandise items, Hunter suggested. “Customers quickly catch the vision that adding a little something to the gift card turns otherwise impersonal plastic into a thoughtful act,” Hunter said. “Keep ribbon on hand to encourage the upsell.”

l Reward givers. Offer gift card buyers an incentive, suggested Hunter. “For example, customers who buy a

$50 gift card might receive a $10 coupon toward their next purchase.”

More and more retailers are going mobile when it comes to gift cards, offering digital gift cards that consumers can order and redeem via online and mobile mediums such as smart-phones. The trend is noted in a white paper by Aberdeen Group and Transaction Wireless that found 61% of surveyed merchants plan to use mobile gift cards during the next 24 months.

Online gift cards, which can be purchased via online, social and mobile Web, are now used by nearly a third — 28% — of retailers, according to the report. The convenience of using gift cards on a mobile device ranked as the top benefit of mobile gifting (cited by 51% of retailers), followed by the cards’ “anywhere, anytime” access (42%).

When it comes to key capabilities for enabling a mobile-gifting strategy, 41% of retailers said that mobile gifting must provide an end-to-end, 360-degree unified shopping experience across multiple channels of sales. And 38% agreed that personalization of the mobile gifting experience is essential to securing customer adoption.

The report offered these tips for retailers looking to adopt digital gifting:

l Create easily accessible online, social and mobile gift card programs across all touchpoints. Retailers need to ensure omni-channel gift card issuance and acceptance (online, catalog, and call-center integration with mobile and in-store programs) to drive traffic, sales and channel interest.

l Build trendy and easy online and mobile gift card programs that promote ease of use, repeat usage and new customer sign-ups. l Develop unique online and mobile gift card pro-motions to entice customer usage. Traditional gift cards are seldom used to delight customers at the point-of-service. Online commerce, smartphones and tablets can bridge this gap through an innovative user interface and easy navigation, including gift card sign-up, balance inquiry, reward point accumulation, top-up and redemption. Use online and mobile gift card promotions for key selling seasons.

l Consider back-end infrastructure enhancements, including remote gift card data management and payment card industry (PCI) data security implications related to mobile and tablet gift card deployments.

Gift Cards Go Mobile

Every retailer looks forward to the holidays – and with good reasons. In 2011, Black Friday shoppers spent a record $52 billion dollars -- with 226 million shoppers spending an aver-age of $398.62 each1. December proved to be equally productive, with holiday sales ex-

ceeding expectations by 4.1 percent at $471.5 billion2. Yet however golden these months are for retailers, shoppers can be stressed by the holiday experience. They are too often frustrated in their efforts to locate desired products, to navigate crowds with busy associates, and even to shop quickly and efficiently online.

This time of year, more than ever, you need to ensure you are giving your customers the best experience possible, and that you are equipped to consistently satisfy their expectations across your brand. How can you make that happen?

l Provide easy access to your business. Today’s tech-enabled shoppers take “right now” connectivity for granted. They want to be

able to locate, compare and purchase products, receive promotions, and collect and redeem rewards on their own terms -- anytime, anywhere and in any channel. Channel integration, cross-channel order management and advanced CRM deliver that convenience, along with a unified view of your brand.

l Give your customers more control. Not long ago, customer-centric retailing was all about establishing closer relationships with

customers to provide more tailored products and services. Now, it’s about understanding that customers want to control and actively participate in the entire buying process. Give them the means to do that, with tablets that support interactivity in store, rich functionality online, and the ability to leverage their own devices.

l Enable your associates. At all times, but especially during the holiday rush, “disappearing” associates are a major

source of aggravation. In-store mobile solutions solve that problem by allowing associates to answer any question, locate inventory, leverage CRM and complete transactions without ever leaving your customers, while improving productivity.

l Make your whole enterprise customer-centric. Your customers are influenced not only by your front-line staff but also by the experts

who create your offering, from your planners and assortment planners to your buyers and merchandisers. Encourage every person in every area of your business to think and work with those customers in mind.

Epicor Tip Sheet

Holidays 2012: Celebrate the Season by Putting Your Customers FirstBy Ian Rawlins, VP of Retail Product Marketing, Epicor Software Corporation

l Remember that your brand is more than your business. It’s the perception in the minds of your customers about what you represent to them as

part of their own identity and lives. Work to shape and enrich those perceptions through every touch point, including CRM, marketing and social media, for long-term rewards.

My daughter recently had a shoe-shopping experience that illustrates the value of this broad approach to customer-centric retailing. Her quest for the perfect pair of shoes involved many different activities and technologies, from reviewing a fashion blog to checking the Web with her laptop and phone, to texts and tweets with friends and in-store visits. The retailers she focused on were able to conduct business the way she lives by interacting seamlessly across the physical and digital worlds, providing information and responding to her requests efficiently and hassle-free. Those that didn’t do these things were quickly passed by.

In addition to a pair of ‘must have’ shoes, my daughter acquired a growing emotional attachment to the retail brand that best met her needs, provided the right shoes at the right price and supported her along the way — as well as a story about a shopping experience that made an indelible impression. That business is well-positioned to thrive in the brave new reality of retail. Those that can’t make similar things happen will be squeezed out.

Properly applied, these lessons can make a real and positive difference to your performance and potential this holiday season, and throughout and beyond 2013. After all, the impression you make now could define your customers’ perceptions – and their own retail stories – for years to come.

Epicor is proud to offer a complete suite of advanced solutions that enable retailers to capitalize on the tremendous opportunities available in today’s customer-centric world. To learn what they can do for your retail business, contact us as retailinfo@epicor.com or 800.992.9160.

1 NRF.com, “Black Friday Weekend Shines as Shoppers Line up for Deals, Spend Record $52 Billion”2 NRF.com, “Beating Expectations, Holiday Retail Sales Rise 4.1 Percent, According to NRF”

Epicor Software CorporationEpicor provides advanced solutions for retailers seeking to streamline processes, integrate channels, leverage intelligence and inspire customers, to maximize profitability. Our end- to-end suite is designed to meet the evolving merchandise and service expectations of today’s highly connected, cross-channel shoppers, and the business requirements of the most demanding softgoods, hardgoods and specialty retail environments including apparel, footwear, discount, general merchandise, automotive aftermarket, lumber and building materials, nursery, and pharmacy. Thousands of leading companies – from Aeropostale, Aftermarket Auto Parts Alliance and Build-a-Bear, to General Nutrition Centers, True Value Company and Under Armour – trust Epicor to help them remain current, competitive, and consistently strong.

For more information, contact us as retailinfo@epicor.com or 800-992-9160.

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