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Social Media Contests: How to Engage Your Customers

No matter the product or service you offer, engaging customers is key to growing your business. Luckily, with the popularity of social media, reaching out to potential customers has never been easier. But what are the best ways to connect with your customers in such a saturated market? Interact with your customers with freebies, promos and contests to increase your traffic and create loyal customers.

Twitter

The Twitterverse is an ever-changing hub of interaction. A simple way to engage your followers on this huge platform is by holding a Twitter contest. For example, you can post a picture on Twitter and then ask your followers to create a caption for it. Provide a hashtag for contestants to use in order to track responses, and then choose the winner based on the most creative caption. Another great Twitter contest is a “fast fingers” contest. You can ask a trivia question about your brand with the instructions that the first person to tweet the right answer wins. Again, provide a hashtag for participants so you can track responses.

Instagram

Depending on the products or services your business offers, Instagram can be an invaluable means of promotion. From showcasing your products to capturing the biggest moments on your work sites, Instagram can make your brand more visible.

A great way to engage customers on this platform is to encourage them to take pictures of the services you provide. Have your customers go out to your stores or use your products and take pictures on their smartphones. Then, have them use a hashtag to connect with your company and reward some of the most creative pictures with a freebie or a VIP upgrade. You can reward customers randomly or hold a photo contest to get customers to submit the most creative uses of your products. Contests such as these not only get people thinking creatively about your product, but they also help customers feel connected to your brand.

Facebook

One of the advantages of Facebook is that your posts aren’t limited to 140 characters like they are on Twitter. This means Facebook contests and posts can be somewhat more involved. You can have a series of posts spanning several weeks where you ask your followers for tips on different topics. For example, you can ask about the best ways to cut down on resource usage and how to live a greener lifestyle. Or, you can ask what you can do better as a brand (just be prepared to listen to the suggestions on this one). Or, you can ask what types of presents your fans like. Then, you can reward the most helpful, creative or honest tip with a prize. Not only do these contests and posts help you interact with your customers, but it also can give you ideas on how to run a better, cleaner and smarter business.

What’s Next?

You have now interacted with your customers and hopefully gathered their social media profiles and email addresses, which sets you up for future engagement and lead generation. Now you need some tools to help you manage all of this information.

A high-quality smartphone like the iPhone 6 should be first on your list. You need to be able to manage your marketing efforts from anywhere and at anytime. With the new 8-megapixel iSight camera, you can take pictures of your products and branding information and immediately post to keep your customers engaged at all times. Then, you will want to use a social media management tool like Hootsuite to organize all of your campaigns. Its pro services include 100 social profiles, 10 enhanced analytics reports and 10 team members to help you collaborate. Finally, manage your subscribers with a tool like MailChimp to keep all of your contacts in one place.

Vetting Bloggers’ Impact in the Beauty Business

Guest Blog By Shana Starr

Beauty blogging is a serious business. The space has grown so large and is so powerful many bloggers are now becoming “celebrities” and are receiving their own television shows and ad dollars from beauty companies around the world. The vast number of these bloggers is growing daily and for beauty companies, answering requests from bloggers for product and even sponsorship money has become a job on its own. Many savvy beauty PR contacts say they are becoming overwhelmed with requests. It seems like it would be easy to look up someone’s popularity and audience reach, but it can become a time consuming chore for beauty companies to navigate the heavy onslaught of product and sponsorship requests. We have created a strategy and tips for beauty companies to vet these requests to quickly determine if they will help the beauty brand grow or just be another free product shipped.

    1. First, you need to gauge how many people their blog or social media channels reach to ensure you’re sending product to those who have sites that will reach large audiences rather than only a handful of followers. If their number of followers isn’t available on their site, use an audience reach tool like StatShow.com or Quantcast to look up the bloggers’ number of website visitors, and check out their social pages (Facebook, Twitter, Instagram, YouTube, Pinterest, etc.) to see how many followers they have. If we still aren’t able to locate the number of followers, we kindly ask that they provide this number, and many bloggers are pleased to share. We currently recommend sending full product samples if they have over 10,000 followers on various platforms or if they represent a niche audience that we are trying to get in front of. For followers at less than 10,000, we suggest trial sample sizes.
    1. Next, check to make sure the blogger communicates openly and knows how to communicate on social media. We are always surprised at the wrong hashtag used or when a blogger is using a broken link. We also suggest to our beauty clients that they make sure the blogger communicates in an interesting, fun, and friendly manner that really gives their followers insight into why they are reviewing a product or working with a company.
    1. Is the blog visually pleasing or are there a ton of ads that break up the blog? If you are going to be sending them product, make sure you would want your brand on that page. This is an easy way to make sure your product aligns with the blogger’s look and feel.
    1. Look at past reviews and confirm that the blogger actually mentions the company’s name and even goes as far as to thank the company for sending them products. Look at previous posts and see if people are engaging in their comments and reviews. We suggest companies look through the blogger’s previous posts to see what they are covering (beauty, food, clothes, etc.) and if this aligns with our client’s brand. We also check out how many views they get to videos (if they post videos or have a YouTube), how many likes or comment each post gets, and frequency of posts. Basically, make sure they are putting in effort, dedicated to their blog, and their writing is professional.
    1. We review their policies and terms and conditions – do they ask for an unreasonable amount of product, do they require payment, or do they look like they are into reviewing a product or just want free products?
    1. Lastly, it’s important to keep track of what bloggers you are sending product to. When we see a great review that was shared by a blog with a large audience reach that our clients are happy about, we will gladly offer them more product for another review, thus growing the relationship and furthering our client’s reach. On the contrary, some bloggers will continue to ask for product but then never feature a review. Keeping a record of who the product was sent to, having a follow up system in place to track down the coverage, and keeping track of who covered the product is essential so you can weed out the bloggers looking for free product and thank those who have.

All of these suggestions help vet bloggers intentions and provide a way for companies to determine if they want to work with that blogger, give them trial-size products, or commit to becoming partners to grow their brand. Work up a numeric system to rate each blogger request so you can quickly give your clients recommendations. With a detailed system in place, you can build relationships with the most desirable bloggers that your clients want to connect with and further expand their reach. It will definitely help the process and create a faster workflow for reviews.

Shana Starr is Managing Partner at LFPR, LLC

3 Mobile Payment Options for Entrepreneurs on the Go

The business environment is constantly changing and entrepreneurs need to be prepared. Although the business world is becoming more globalized, there also is a push for small local businesses and face-to-face interactions. While emails, texts, chats and video conferences are necessary to do business, in-person interactions can make a difference. According to a study by psychologist and professor at National University of Singapore Richard Arvey, 77 percent of people still believe in the value of offsite meetings.

Although in-person meetings help make a connection, another barrier in the past has been that business payment systems were simply not mobile enough to be used outside of the office environment. This meant that you could make a sale in person, but you couldn’t close the deal right then and there. Your clients either had to give their credit card information over the phone or arrange an alternative payment method. That gives enough time for the deal to fall apart.

Fortunately, with the various apps and software systems available today, you can carry everything you need to complete the sale from start to finish. Consider the following mobile payment options:

Google Wallet

Google Wallet makes payments simple with as little as a two-click process. As a merchant, all you need is a Google Wallet account of your own or a near field communication (NFC) device. If the latter, you would need to rent the applicable NFC reader from First Data. This enables clients with Android operating systems and the Google Wallet app to simply hold their phone over the NFC reader in order to affect payment.

Google Wallet also can be integrated into your current payment processing option with no fee. However, if you switch over, you are looking at a fee of at least 1.9 percent of each transaction value.

LevelUp

LevelUp is even simpler than Google Wallet. You just need to get the app and a LevelUp terminal that can be integrated into your current point of sale system, and then the reader scans the QR code generated by the client’s smartphone in order to complete the transaction. However, like Google Wallet, you can expect to pay 2 percent of the transaction fee.

Sage One

When considering mobile payment options, Sage One looked at the problem holistically—business owners need to be able to accept a wide range of payment types in a cost effective way and also need a way to automate the capture of these payments. After all, nobody has time to waste typing in data that could be automated.

Sage is an all-in-one system that can automatically assign the correct receipt, make all the necessary entries into your financial accounts and keep your books up to date on a per client basis. Imagine being able to call up sales reports in real time just by clicking a few buttons. This way you can analyze spending patterns and see the effects of your marketing campaigns. This helps you make better informed decisions and helps to reduce the amount of time needed to analyze the data.

While there are plenty of payment options available, these three are perfect for the entrepreneur on the go.

Lessons Learned from the Chick-fil-A Breach: Five Preventive Measures

Guest Blog By Kevin Watson

The past year has been inundated with retail breaches including Target, Home Depot and most recently, Chick-fil-A. The Georgia-based fast food company investigated a credit card breach in early 2015, focusing on the point-of-sale (POS) network at some of its restaurants. The breach is thought to have occurred between December 2013 and September 2014.  Brian Krebs, an Internet blogger who specializes in banking security, reported that one financial institution claimed that the common thread among approximately 9,000 of its affected customers were purchases at Chick-fil-A restaurants. So what can retailers learn from these types of attacks?

It is important to stress that security breaches of this nature can be caused by a variety of issues – newly discovered software flaws, lax security from a service provider, insider fraud, weak network security and countless other avenues.  There is also the possibility that the data which had been compromised did not originate from Chick-fil-A at all.  Theft can occur at numerous places along the payment chain.  For example, it may be necessary to examine the bank where the electronic transactions were processed.

In one sense, it does not matter how the breach occurred.  The fact that credit cards at a major corporation had once again been stolen highlights the threat that all quick serve restaurants and retailers of every size are facing from data thieves. Businesses interested in keeping their networks and data secure should start with simple security measures that can effectively mitigate the growing problem that hackers represent. While nothing is fool proof, the following suggestions could have prevented most (if not all) of the breaches that have garnered so much attention in the past 12 months:

Protect a Location’s Incoming Internet Traffic

The first step in stealing data is finding an avenue into the targeted business.  All of a business’ data circuits and its Internet connections must be protected by a robust and adaptable firewall, protecting the business from unwanted incoming traffic.

Implement Secure Remote Access

When permitting remote access to a network for the management of POS and other systems, it is essential that this access is restricted and secure. At a minimum, access should only be granted to individual (not shared) user accounts using 2-factor authentication and strong passwords. Remote access activities should also be logged so that an audit trail is available.

Keep Anti-malware Software Up-to-date

It is critical to keep all anti-virus / anti-malware software up to date with the latest versions and definitions.  The companies that make anti-malware software monitor threats constantly and regularly update their packages to include preventive measures and improvements to thwart malware seen in other attacks.

Update your Point of Sale as Security Patches are Released

Much like anti-virus / anti-malware updates, POS manufacturers are constantly improving their software to prevent hackers from stealing data, especially if a criminal manages to bypass the built-in security.  It is essential that the latest security releases and patches be installed on all POS systems.

Limit Outbound Internet Traffic

In addition to blocking unwanted traffic from getting into a location, it is always a good practice to selectively block outgoing traffic as well.  Many modern breaches involve software that becomes resident on your network and then tries to send sensitive data to the hacker’s system via the Internet. No system can completely prevent unwanted malware or viruses, so a good last line of defense is making sure secure data doesn’t leave your network without your knowledge.  The same firewall used in Step One should be configured to monitor outgoing traffic as well as incoming.

These suggestions might, on the surface, seem simplistic, but almost every major breach in the last 12 months failed to incorporate at least one of them.  Of course, this list is not an all-inclusive way to prevent every type of credit card theft, but it is interesting to ponder how much theft could have been prevented if just these five elements had been implemented correctly.  Remember that it costs nothing for data thieves to attempt to hack a business, so for them, every business is a worthwhile target.

Kevin Watson is the CEO of Netsurion

Putting Analytics to Work in Retail Environments

Guest blog by Murali Nadarajah

Retailers today are looking for more sophisticated ways to understand customers’ buying behavior and are increasingly turning toward big data and analytics to deliver a deeper level of insight. Access to these tools is now topping retailers’ “must-have” lists, regardless of the channels by which they sell.

Analytics makes it possible for retailers to see the choices consumers make as they move through a store. For example: they pause at one display, but not at another; they choose one aisle to walk down and ignore the next; they pick up products but don’t buy whereas they pull the trigger on others. Further, analytics allows e-tailers to track criteria such as click-through rates, site navigation, repeat visits, purchases and abandoned shopping carts.

With more traditional e-commerce retailers opening brick-and-mortar storefront such as Warby Parker, BaubleBar and Zappos and the continual growth of online shopping, retail analytics will become even more important in more clearly defining ROI in the future. According to a TechCrunch survey, 78 percent of consumers prefer to shop in-store and spend six times more in-store than online.

Today’s Use of Retail Analytics

A variety of technology and data analytics is already providing this level of insight (which we’ll dig further into later on). The combined power of technology, big data and analytics can give retailers more precise information than they’ve ever had on just how shoppers operate in their stores.

For some time now, retailers have gathered information on what customers buy, and have used it to more precisely target and tailor their marketing efforts. Store loyalty cards accumulating points to turn into discount vouchers or credits give the retailer the capability to monitor individual customer purchasing behavior. Online, retailers can track customer movements around their virtual store and have an idea which items are abandoned before the checkout stage and “re-target” to remind shoppers of the items they have forgotten.

However, it’s been particularly challenging for many retailers to bridge the gap between the available technology and the ability to actually put the insights to use. A possible solution to this issue is to either hire more personnel with a data/technical background or ensure your analytics partner can provide this counsel.

In-Store Analytics

There are several different types of analytics applied to the more precise tracking of in-store shopping behaviors, such as: zonal analytics, heat mapping, and shopper behavior flow. Let’s take a brief look at each:

  • Zonal analytics: Allows retailers to put a fine point on customer engagement and shopping trends by zone, floor or category in shopping centers.
  • Heat mapping: Identifies a particular site’s potential (whether it’s a specific aisle or section in the store) by locating hot and cold spots.
  • Shopper behavior flow: Shows retailers where shoppers are moving within the space, discovers shopping trends between categories, and identifies the most and least popular stores within a category and across categories in shopping centers.

This in-store technology also helps retailers identify what hours show spikes in foot traffic, how long customers stay in the store, how frequently they visit and who the “VIP” shoppers are. In turn, this allows retailers to better tailor marketing campaigns, better connect sales channels, create more attractive displays and capture lost sales opportunities among a host of other competitive benefits.

For managers of brick-and-mortar shopping centers, being able to map footfall gives them information they can use to increase profitability and maximize rent for retail space. Foot traffic and shopper flow analysis can expose the routes shoppers take through the mall, which is very useful information to  potential leasing customers and, for the mall management team wanting to re-model to optimize visitor flow and maximize return visits, not to mention for the setting of price zones according to traffic level.

Wi-Fi and Video

Data gathered from Wi-Fi hotspots and surveillance video cameras is another technology retailers are frequently turning to today. It can be used to create a detailed map of customer behavior going into, and moving around, the store. Brought together with sales system and transactional data, it can build a picture of how well a storefront serves to bring customers in, where shoppers go within the store, if the layout makes browsing easy, if checkout lines are losing customers and other insights into customer shopping habits and needs.

Xchanging undertook a study of five shopping malls in the United States and found that 62 percent of shoppers leave Wi-Fi up on their phones, meaning that wherever they go their phones are pinging off Wi-Fi hotspots and are leaving a digital footprint. Shoppers don’t even need to manually connect to the Wi-Fi for this location data to register – in fact, only around three percent did in this study. From this data, the movement of shoppers around a shopping center can be mapped, providing insight into the floors they visit and the shops they go into.

Add to this content from surveillance cameras and the information becomes even more granular, detailing things like gender/age profiles of customers entering specific stores and average dwell times at window displays. Combine images from cameras with a more localized focus with sentiment analysis software and a picture can even be generated of the reactions and emotions of shoppers as they shop.

Putting the Data to Work

Retailers operate in a highly competitive environment where customer insight provides a competitive edge. Through the use of retail analytics they can better understand their customers and take sales data from the level of ‘what’ to the level of ‘why.’ For shopping center management, this kind of information is likely to become the de-facto standard for retail outlet leasing and will be a necessary component of what property managers supply to retailers. For all of us – consumers and retail businesses, alike – it takes a subtle shift in mindset, one that moves away from perceptions of a ‘big brother’ environment where everything we do is watched, to one where we can see the mutual benefit in information exchange, provided it is carried out sensibly with due regard to security and privacy.

Murali Nadarajah is CEO, Xchanging Malaysia

How to Handle the Post-Holiday Sales Slump in 2015

In many ways, our economy is still trying to find its feet since the last recession. Holiday sales in 2014 weren’t spectacular, which may have discouraged you. However, there are ways to beat the sales slump, whether your 2014 season exceeded expectations or underperformed. Here are the strategies you should implement to give your 2015 sales a kick-start.

Online Trends You Can Take Advantage Of

Some sales hacks are already established as being a good idea year round — and you should take advantage of this new consumer market! These include making your web design responsive (look equally good on any device) and optimizing your mobile presence (giving your mobile site just as many features as the desktop version has). The latter is especially important, as more and more shoppers are shopping on the go. Here are some other ideas to boost your post-December sales:

  • Make notes of what ran out sooner than expected, what didn’t sell well, and which discounts paired best with which items.
  • Give customers the New Year’s deals they expect, but throw in a surprise: entering them to win a new product before you launch it, donating a percentage of their purchase to charity, or a similar perk.
  • Reward customers with discounts for sharing holiday photos of their family using your products.
  • Use the list of new customers as an opportunity to start or promote your loyalty program, offering them free points for joining now.
  • Highlight those items in your inventory that cater to self-improvement, a big theme every New Year.
  • Offer established customers a little bonus in the form of discounted items they may like, based on their recent purchasing patterns.
  • Provide exemplary return and exchange services, even though you know you’re as tired as they are. Using a discount or free item to convert returns into exchanges can help brighten everyone’s mood.

Whatever consumers expect from you, do something a little extra or a little different. Let them know that just because the Christmas marketing season is over, it doesn’t mean you’ve lost your edge. Remind them why they started shopping with you: because you’re worth their time.

Surprising Offline Promotions that Drive Traffic

You don’t have to rely solely on online hype to keep your business afloat during the dull days of January. Think about ways you can reach your customers offline that will keep them coming back to you.

The first technique is perhaps the most obvious: having a quality product. Sure, you may already have that quality product, but could you improve their durability, function, portability, or other features to make them even more irresistible to your customers? When you have a truly high-caliber item, it becomes one of the quietest, yet most reliable, ways to build brand loyalty.

Another clever way to maintain top-of-mind awareness is to include a physical thank-you coupon in each order you ship. Unpacking a discount along with their original order is enough to convince many shoppers to go ahead and treat themselves. This helps them create something to look forward to after the holidays end.

Above and beyond good products and special markdowns, take some time to see how your customers are doing. Have them share their favorite holiday moments with you. Send of your holiday customers a cheerful snail-mail greeting. People remember small touches of kindness for a long time. This also gives you a great opening to mention a little later how your company is settling back into real life, and how excited you are about the upcoming year. Clients will be more interested in updates about you now that you’ve shown interest in them.

Optimizing Both for Maximum Benefit

As always, there’s no reason that online and offline advertising can’t work together. If you operate locally, you can use your social media to highlight offline events (festivals, scavenger hunts, sports team sponsorships) and reward fans with mentions and discounts when they engage with you offline.

Just because we live in a digital age doesn’t mean print promotions are no longer relevant, or that you shouldn’t keep your brick-and-mortar store looking sharp. Many “showroomers” will come and shop at your physical location if they like what they see online. Showing consumers where they can get the best deals, paired with the stellar in-person service you provide, may win you as many IRL shoppers as online ones.

Holiday cheer doesn’t have to end with the holidays. Continue reaching out to your patrons, both new and old, to let them know you’ll never stop appreciating them. A few gestures of goodwill could be your solution to avoiding the dreaded zone between New Year’s and Valentine’s Day.

How have you kept your customers engaged during the dead weeks?

Katherine Halek is the lead advertising and print strategy advisor at Signazon and Easybanners.com, leading online printers that provide marketing collateral for thousands of retailers around the United States. Katherine enjoys writing about storefront advertising, retail management, and the ins and outs of marketing. Connect with her on Twitter and Google+.

Mobile: The Solution to your Customer Care Problem

Guest Blog By Stacy Adams

There is an inexcusable and avoidable problem in customer service today: 73% of brands think they care for consumers, yet only 36% of consumers agree, according to a recent Mblox survey. The retail industry performed only slightly better than the cross-industry average (36%), with 41% of those surveyed saying they felt cared for by retailers. Clearly, there is major room for improvement – but where do retailers start, and why is this gap so important to fix?

Because this gap will impact the bottom line sooner rather than later. Take this year’s holiday shopping season, for example. Mobile stood out from the pack – Cyber Monday mobile sales were up 27.6% over 2013. Increasingly, consumers are making purchases outside of brick-and-mortar stores, underscoring the need for brands to reach outside their physical locations to care for their customers, taking advantage of various channels and messages. This approach will create customer advocates and set the tone for sustained business.

It’s no secret that major opportunity exists for mobile – it allows businesses to reach consumers at the time, in the place and in the manner they want to connect – which is crucial in today’s on-the-go, “experience age.” Yet, our survey, conducted by Millward Brown Digital, found that while 86% of consumers are open to connecting with brands through their mobile devices, only 58% of brands are using mobile to communicate with customers! There’s no excuse for this disconnect, when mobile can directly enhance consumer satisfaction and close the disparity between businesses’ perceptions and reality. Below are a few tips for brands to use mobile to close the care gap.

Focus Improvements on Email and SMS: Email and SMS are consumers’ preferred modes of mobile communication, sitting at the crossroads of consumer satisfaction and preferences. Enhancing these areas will directly impact customers’ satisfaction scores, because more consumers are interested in these channels than others, such as mobile apps and games. Businesses can improve these communications by tailoring the message to fit consumer preference. Consumers most want to receive texts and emails from brands regarding shipping status, confirmation of returns and marketing messages that include deals, promotions and sales. Therefore, brands should craft messages that communicate these types of messages.

Expand Your Mobile Strategy to Encompass Customer Care: Inundating consumers with deals, promotions and content is not an effective strategy – in fact, it may just aggravate and alienate the consumer. Brands must take into account customer care, which ensures quality and service continue well beyond the point of purchase. For example, retailers can share a mobile survey with customers to solicit feedback and improve future experiences, or create a personalized loyalty program that consumers choose to participate in via text.

Combine Mobile Tactics to Enhance Effectiveness: Consumer preferences for time, content and frequency of communication vary – meaning there’s not one best way to communicate via mobile. In retail, consumers prefer email for marketing messages like deals, promotions and product sales. While SMS closely followed in the survey, it was for more urgent communications, like alerts. Consumers want retailers to use mobile to communicate situations such as shipping status, deal notification based on sales nearby, order updates or special events/appearances. To truly care for customers, brands most consider logic and behavioral data – and then use this information to develop a multichannel approach that works best for their audience.

Increasing consumer acceptance of mobile brand engagement parallels organizational shifts. Functional boundaries between marketing, information technology and customer service are beginning to blur. The common ground is the enhanced customer experience – an objective that demands capabilities from across each of these disciplines. Harnessing the power of mobile to provide customer care offers unprecedented opportunities for brands to support their strategic business objectives, such as to cultivate deeper customer relationships, drive recurring revenue and create operational efficiencies. If retailers employ a smart mobile strategy, they will create deep, lasting customer relationships and see a positive impact on their businesses.

Stacy Adams is Vice President Marketing at mBlox

Retail Loyalty: Focus on Success by Putting Common Assumptions to Rest

Guest Blog by Tim Moulton

Loyalty marketing was born in retail, a concept that started with S&H Green Stamps back in the 1930s and has been around so long that by now much of the practice is steeped in myth. Retailers often tend to side with historic “best practices” even when research points in the other direction. Using data to demystify the reality of loyalty, however, can give retailers a clearer picture about the true value of loyalty programs instead of the historical fiction that may be clouding their minds.

When it comes to consumer behaviors and preferences, there are numerous retailing myths that don’t hold up to current research. Here are five:

Myth 1: Discounts are more compelling rewards than loyalty currency

Fact: Sales and discounts can be popular, but the rewards from loyalty programs keep high-value customers coming back. According to a recent Points loyalty survey, “From Everyday to Extraordinary,” program members spend more per purchase (54%) when they are rewarded with loyalty currency, and 69% will switch brands to earn their favorite currency. While sales and discounts can lure customers away from other retailers, they also exert continuous pressure to keep prices low, which in turn erodes profits.

Rewards programs are structured to stream revenues back into the business by attracting the activity and word-of-mouth influence of a loyal customer base. As author Fred Reichheld noted in his book The Loyalty Effect, loyal customers spend more, buy higher-margin products and cost less to serve, and a 5% increase in customer retention rates can boost profits anywhere from 25%-100%, Moreover, when retailers attract a steady stream of loyal, eager-to-buy customers, the data and information that can be unearthed from their transactions and preferences lead to further success. Loyalty data creates a more personalized shopping experiences for customers, and a data-driven blueprint for continued growth for retailers.

Myth 2: Consumers want cash back, not travel rewards

Fact: Consumers treasure extraordinary opportunities and memories as much as they like cash. Convinced that consumers will always choose cash over points/miles, some retailers have abandoned rewards programs in favor of cash-back strategies. Yet studies have found that while consumers will select cash when given a choice, they are more satisfied with rewards programs that result in a luxury item or experience. Experiences they otherwise would not have purchased for themselves, like concert tickets or an exotic vacation, will foster the loyalty that brings consumers back again and again.

As early as 2004, marketing professor Xavier Dreze of the Wharton School of the University of Pennsylvania described the phenomenon within the context of frequent-flyer miles and memories: Cash-back represents money that is used to buy everyday items or pay bills, while frequent flyer miles buy trips that create lasting memories, and those memories make miles a special form of currency.

Tip for retailers: Make customers feel appreciated with rewards that create special moments and memories.

Myth 3: Loyalty programs only work for high-priced items

Fact: Bigger is not always better. Consumers like earning loyalty currency (points and miles), whether the earning rate is in big chunks or small increments. Points’ survey of 1,500 members in North American and the UK found that 68% appreciate the ability to earn small amounts of points and miles, while 48% set long-term goals for which they plan to earn incrementally.

The more flexibility programs offer, the more consumers can do with smaller points/miles balances. Offering options ensures that program members see strong value in earning with the lower purchase amounts of everyday spend.

Tip for retailers: Offer consumers opportunities to do more with points/miles so that smaller balances have higher value.

Myth 4: Consumers don’t want more marketing communications

Fact: The personalized messaging from loyalty programs actually helps eliminate communication clutter. Members of loyalty programs behave like bank customers: they check their accounts frequently, keep tabs on balances and are constantly looking for ways to bolster their accounts with more points/miles. In fact, offers mailed to loyalty program members have an open rate of 41%, compared to a 19% industry average, according to findings from SpotOn Data.

A personalized outreach deepens members’ affinity and loyalty toward a retailer. Remember, loyalty members appreciate rewards programs that keep them informed, motivated and engaged.

Tip for retailers: Keep communications relevant by providing key information like limited one-time offers or bonus earn opportunities.

Myth 5: Loyalty programs are too expensive

Fact: It is true that creating a loyalty program is a huge financial endeavor that requires more marketing, technology and financial infrastructure than many retailers are capable of managing. This is why establishing a partnership with an existing program is a viable alternative with retailer benefits. It gives customers the miles/points they crave and allows them to build up their balances in their favorite airline, hotel or financial services programs. It can boost a retailer’s brand equity via affiliation with a name-brand partner. Another key benefit for retailers is that a partner program brings with it a new and potentially large customer base for visibility, marketing and outreach.

Tip for retailers: Search for partners that enhance your brand image and also extend your brand into high-potential customers segments.

Loyalty programs can help today’s retailers struggling with stiff competition, empowered consumers, the constant pursuit of more customers, and need for increased revenue. Consulting data to demystify the common assumptions about loyalty programs is the first step toward loyalty program success for retailers of any size. That will ensure that you build your loyalty strategy on sound business principles rather than gut feel.

More information and retail loyalty insights can be found in From Everyday to Extraordinary and Retail Loyalty Redefined.

Tim Moulton is VP, Points Business Solutions & Business Development, Points

Who Do Last-Minute Holidays Shoppers Trust? Survey Says: Not Retail Stores

Guest Blog by Tamara Saucier

It’s three days before Christmas and you just thought of the perfect gift to buy your friend.  You need to find this item – it’s just too right.  Do you rush off to your local store in the hopes they’ll have it? Not this year.

A recent study by YouGov, sponsored by GT Nexus, found that only 39% of US shoppers trust physical stores to have their desired last-minute gift items in stock this holiday season, leaving 61% of the consumer trust pie to online retail instead.  The findings are eye-opening since consumers historically have gone in-store for their last minute holiday purchases.  But this change is just the latest in a long line that has shaken up the retail industry.

Ecommerce has disrupted all traditional modes of retail by offering a wider selection of goods, instant access to product reviews, and convenient delivery – all at a typically cheaper price than physical stores.  But despite the growth of ecommerce, retailers saw last-minute holiday shopping as one of the last protected areas of in-store retail.  This may no longer be the case.

What Led Us Here

It’s no secret that customers have embraced ecommerce and the market is clearly shifting in that direction. As a result, retailers are facing an identity crisis much in the same way that newspapers and magazines were a decade ago.  The newspapers who survive differentiated themselves by their excellent content and delivery. Taking a page from their papers, retailers who want to survive will need to do the same.

Here are a few factors this year that have led us to where we are today:

  • Early stocking: Retailers started stocking for the holidays early to avoid last year’s shipping issues and to prepare for West Coast port delays. While this advanced planning was good, in theory, it left them vulnerable to volatile shifts in buying patterns as the holiday season progressed.
  • Consumer smarts: Online consumers are smarter this year and don’t seem to be waiting until the last minute to order their gifts. Online numbers are expected to be higher (according to ComScore, $42.5 billion has already been spent online during the holidays, up 15 percent from last year), a sign of consumer confidence in ecommerce.
  • Forecasting forethought: The parcel carriers were much more prepared and were requesting better forecasts from the retailers to plan deliveries accordingly.
  • In-Store reputation: Consumer confidence in the physical store is low – likely due to last year’s low inventory levels and the general acceptance that if consumers go to the store too late in the holiday, they’ll find the shelves shopped bare.

Consumers are clearly in the driver’s seat and this puts more pressure on retailers as they struggle with inventory visibility and agility. Whether retailers can get a handle on their inventories in time for the holidays can make or break their entire year.

Where to Go

The problem of customer confidence in retail isn’t a holiday problem.  It’s a year-round problem, magnified during the holiday season.

The global expansion of commerce has made supply chains increasingly longer and more complex. There are so many interconnections spanning tens of thousands of miles that managing inventory from supplier to consumer becomes extraordinarily difficult. Still, today’s retailers need to look upstream in the supply chain network to solve inventory problems down on the retail floor.

Retailers must become more aware of all their operations. Greater awareness coupled with more information on hand means retailers can better respond to sudden changes.

To get to a point where retailers have just the right amount of profitable inventory to serve last-minute holiday shoppers, detailed information about the entire supply chain network and agility are absolutely required.

The myriad of problems facing traditional retailers isn’t going away.  And it’s not going to be fixed by rearranging deckchairs. It requires re-thinking what content and delivery mean in a modern retail setting. Using technology effectively is the biggest trick to competing in an ecommerce marketplace. Retailers who can put technology to use to gain better control over their supply chains can differentiate themselves on fulfillment, assortment, and customer experience. Those who don’t will find that the 39% of shoppers who still trust them in a pinch won’t stick around much longer.

Tamara Saucier is VP, Retail Industry Solutions, GT Nexus

What the Data Reveals: Enticing Customers with Points and Miles

Guest Blog by Tim Moulton

Consumers often dream of travel rewards, and high-dollar business travelers are the superstars of any rewards program. But what about the small earn-and-burn opportunities of everyday spend? Can loyalty programs at high frequency retailers capture the hearts of consumers and motivate them to truly change their behaviors? A recent study shows that yes, consumers do respond favorably to programs at high-frequency retailers like supermarkets and grocery stores, pharmacies, clothing retailers, convenience stores and gas stations, and are actually more engaged and motivated to spend than the high rollers.

Data from Points’ recent survey of 1,500 loyalty program members, compiled in a report titled “From Everyday to Extraordinary: How Retailers Can Woo Shoppers with Points and Miles,” reveals that rewards-hungry consumers are quite highly motivated by earning small amounts of points/miles with everyday spend. These often-overlooked “Everyday Earners” simply have a passion for collecting every way they can.

Retailers can tap into this highly motivated segment by following five key engagement tactics:

Tactic #1: Over-deliver to current rewards members

Shoppers at high-frequency retailers are looking for high-value, everyday, frequent offers. The Everyday Earners report shows that 60% of loyalty program members actively look for promotions that will help them earn points/miles. Almost as many — 56% —say they never/rarely miss a chance to earn even small amounts of points/miles in their favorite programs. And almost three-quarters (71%) prefer shopping at stores where they’re already members of a points/miles program.

Marketers already know that it’s more cost-effective to retain current customers than to acquire new ones, so treat existing and loyal customers royally by offering members-only promotions to make them feel special and valued. Customers will respond – 69% of those surveyed said they would buy a different brand to earn more points/miles, and 54% will buy more when they are being rewarded.

Tactic #2: Offer frequent rewards to build shopping habits

Rewards members say that they enjoy earning points/miles as part of their daily routine, so reach out to them on those terms. Among loyalty program members, 71% prefer to shop where earning points/miles is easy.

Moreover, nearly 8 in 10 (79%) rewards program members say they are likely to return for more points/miles. Eighty-eight percent say they look for rewards-earning opportunities even after a points/miles redemption, proving that they aren’t “hit and run” earners. In addition, 76% pay more attention to programs that reward them often. The takeaway: frequent rewards for Everyday Earners keeps them coming back.

Tactic #3: Mix in the big earn opportunities

Consumers say they adapt their shopping habits solely to beef up their points/miles accounts. Almost half (46%) buy in bulk if rewards are involved, even if they do not need that particular purchase at the moment. And 69% charge big-ticket items – including jewelry, construction materials and even hospital bills – for the large points/miles payoff.

Seventy-five percent of rewards members say it’s worth the effort to earn both large and small amounts of points/miles. At the same time, less than 14% of shoppers say they buy extra points/miles outright or ask for them as gifts.

Since shoppers would prefer to earn as many rewards as possible on their own, help them get closer to their goals by mixing in larger earn opportunities. One solution is to award smaller amounts for some items and make larger offers during special events or special promotions.

Tactic #4: Make rewards visible

Since 81% of consumers say they actively seek rewards and promotions, support their search by making points/miles as easy as possible to find. Use multiple channels to promote campaigns or rewards-related offers, including brand and partner websites, banner ads, in-store signs, social media or email newsletters and mobile marketing initiatives.

Overall, the clearer your value proposition, the better. Make program details easy to understand, and keep promotions and offers simple.

Tactic #5: Give customers an incentive to switch

Although a loyalty program’s biggest power is in retaining customers, don’t rule out the possibility of attracting new ones as well. An estimated 80% of shoppers would switch stores for the opportunity to earn points or miles. Another 60% of consumers go “out of their way” to earn points/miles in programs to which they belong – perhaps visiting another store location.

Don’t be shy about attracting those who are willing to change their shopping routine. Lure them from competitors by making a “match a competitor’s rewards” offer or a “new customers only” campaign to let newcomers know they’re valued as well.

Everyday Earners are looking for opportunities to spend more, and shop more frequently, with their favorite programs. Even small rewards can change impact customer behavior; high-frequency retailers can capture this upside by optimizing for these frequent shoppers.

Tim Moulton is VP, Points Business Solutions & Business Development, Points