While maintaining customer loyalty is a challenge that spans the retail industry, ever-shifting trends in the fashion and beauty verticals make it a particular concern for these brands. Retailers shared strategies for staying ahead of rapid changes — by harnessing data in ways that go beyond simple personalization — at the CARMA19 retail marketing forum hosted by Custora.
"Beauty is a super competitive category,” said Natalie Mackey, CEO of Glow Concept, parent company of Winky Lux. “The customer jumps from brand to brand to brand. No woman in this entire room has one bag full of one brand; everybody has competing brands in their beauty bag. So how do we keep that customer coming back over and over again?"
Winky Lux was created in 2015 to meet customer demands for affordable makeup from a brand that keeps up with trends and generates an authentic connection with shoppers. However, these 16-to 29-year-old customers, who shop almost exclusively on their phones (mobile accounts for 82% of Winky Lux sales), can be fickle: only 35% of men and 19% of women in this category are loyal to name brands, according to a study by daVinci Payments.
These shoppers are often attracted through paid social campaigns, but unless retailers take special care, this acquisition tool doesn’t produce valuable customers, according to Mackey. While influencers are a great way to expose products and inspire individual purchases, they also result in shoppers who feel connected to the model and platform, not the brand and retailer.
“A great example is that this summer I went to the beach, my friend asked me where I got my bathing suit, and my first response was ‘Instagram,’” said Mackey. “I had no idea what the brand was, I’d seen it on a picture, I clicked through and I bought it. That sounds like that’s a win for that company, but it really isn’t in the sense that they paid a lot of money to acquire me, but they didn’t form an emotional connection.”
However, social media still plays important roles in any retailer’s marketing campaign, but the format must be leveraged in the right ways. Winky Lux has achieved this by combing through its customer data to determine the demographics, preferences and habits of its shoppers, and using this information to turn everyday customers into influencers that put an emphasis on the brand.
This approach let the retailer turn its brick-and-mortar stores into a lynchpin of its social strategy, by drawing on the fact that beauty shopping can be a fun experience. These spaces are laid out to provide fun, easily shareable experiences, turning customers into influencers offering natural conversations with real friends — and resulting in more than a million monthly social media views per store.
Customer Service Can Be A Revenue Generator, Not A Drain
Paying attention to data also lets retailers think outside the box when it comes to boosting loyalty and retention. Men’s apparel retailer Taylor Stitch has used this approach to turn customer service from a cost center into a sales driver, by hyper-personalizing the experience to make both pre- and post-purchase communications as pleasant as possible.
“We live in a world where a lot of companies are trying to follow the Amazon approach, which is that no customer service experience is a good customer service experience,” said Michael Laniak, Director of Customer Experience and Retention at Taylor Stitch. “I disagree with that. Granted, I’ve never had an issue with Amazon, but at the same time I wouldn’t even know how to talk to someone, and that’s not great. I want to be able to have a conversation if I need to with an individual.”
The retailer has opened a number of channels for customer interaction, including live chat, SMS, Facebook Messenger and telephone. Laniak follows the philosophy of “whatever we find next, we’ll add.” The result of this open approach is not just more conversations, but more loyal customers — to the point where Taylor Stitch considers customer service another revenue generation channel.
Taylor Stitch logs details from every interaction to create vast customer profiles that track behavior across multiple categories, from product preferences to price point. This enables the company to offer personalized deals at various points during the shopping process, such as giving a lapsed jeans shopper a discount on denim when he returns after a period of absence.
The retailer also tags customers based on sizing. This lets Taylor Stitch automatically remerchandise the main and sale pages for each customer so that they only see products that fit them, while product pages can be prepopulated with the correct size to simplify the checkout process. These moves also help streamline customer service by ensuring that agents have each customer’s size on hand during interactions.
Having this amount and variety of data lets retailers offer service proactively as opposed to reactively.
“Most customer service teams are reactive in nature: a customer has a problem, they reach out, the business solves the problem, the customer goes away potentially satisfied and they won’t hear again until there’s another problem,” said Laniak. “For us, that in itself is a problem because you’re waiting for someone to have an issue before they reach out.”
Taylor Stitch tracks a number of conditions for each shopper, such as showing signs of churn, and when enough of these conditions have been met, it pings a salesperson to inform them of the situation. The agent then sends a real, personal email to the shopper — a process that results in a 15% order rate and $23 in revenue per recipient.
Leading-edge retailers can earn, and keep, customer loyalty by not just collecting data but using it in relevant, strategic ways. Doing so can turn the potential negative of a customer service call into a positive for both the customer and the retailer, or amplify the power of social media to promote a brand. Turning insights into sales is proving to be a matter of understanding your customer base and then shaping service offerings in ways that meet their needs.