Converting loyalty

Julie Atherton, planning director at Indicia talks loyalty. How can retailers convert high-street loyalty into online loyalty?

High street retailers characteristically enjoy strong relationships with customers; however when they try to replicate this relationship online, lifetime value and loyalty is often sacrificed as a result. But why is this and what can brands do to foster loyalty, both on and offline?

High street retailers have tended to fall into two distinct camps when grasping their online presence. There are those that have been quick to grasp the online space joining up their stores, ecommerce site and marketing strategies – mainly those retailers selling products chosen by specification and price such as Currys and Argos.

While the other camp, those that believed their customers had to touch, feel and experience their brand and products before they bought, have been slower to take that leap of imagination and move from retailers into marketers.

The high street fashion sector has largely fallen into this camp but was woken up with a jolt after the success of ASOS, and is now responding.

If a brand gets it right, building an online relationship with their customers can deepen loyalty and increase sales dramatically. Too often though, retailers see an online relationship as a way of disseminating voucher codes. Although consumers love a bargain, the indiscriminate offering of voucher codes does nothing to boost loyalty to the brand and rather fuels the on-going sale mentality of the high street.

High street retailers are starting to recognise that their online presence is a powerful tool to identify and engage with their customers. For the first time they know exactly who their customers are (not just the few who have taken out the store card) and therefore can start to build up a detailed picture of individual buying behaviour and spend levels.

This insight enables targeted marketing of specific offers, responses to individual’s behaviour, brand messaging of appropriate tone and style by segment. Whilst it may not have previously been on their radar, data capture is suddenly really important. How and what data you capture, how you talk about it with your customers and then how you use it, are probably some of the most important decisions facing retailers today.

Customers now expect brands to engage with them in the same way off and online – the brand experience and values need to be the consistent – if you have a poor online experience you will assume the store is the same and vice versa. Building a strong online engagement leads to increased sales both online and through stores.

Knowing your customers and tailoring your communications accordingly is enormously powerful and plays an important part in establishing direct relationships, where trust and loyalty is built on a mutual understanding of each other’s wants and values.

More than anything, if you can make your customers feel special and recognised, you’ll not only be able drive incremental revenue but also foster goodwill and positive word-of-mouth, the importance of which should not be underestimated in these social-media dominated days.