I love the design of the Target Circle program because it provides value to the customer while being consistent with the Target brand. Instead of focusing on providing points or other incentives for customers to shop at Target regularly, the program focuses on reminding customers what they love about Target and why they love to shop there.
The goal is to strengthen the emotional connection that is at the heart of true loyalty.
From the list of ways to compete I would choose loyalty, but I also think that the term doesn't mean the same thing to everybody.
Transactional loyalty, or shopping a site regularly, would be an area where I would say Amazon dominates.
Emotional loyalty, or the desire of a customer to shop somewhere even when other options are available, is an area where I think other retailers can do well. Even shoppers that go to Amazon for everything probably don't feel much of an emotional connection to Amazon. Retailers can leverage their brand positioning and sense of community to encourage customers to stay with them despite the power of Amazon.
In fact, I think brick-and-mortar retailers should look at this list and consider what they might have that Amazon can't match. That consideration will likely lead you right back to emotional loyalty, which is an area where Amazon is at its weakest.
I cringe every time I see stats suggesting that getting a customer to join a loyalty program will make them a better customer -- it's the other way around! Frequent shoppers are more likely to join a retailer's loyalty program, so of course members are better customers than non-members.
It is all about value. The secret to expanding loyalty enrollment beyond your core customer base is to provide value that appeals to everyone, including your lighter (currently less loyal) shoppers.
Ken is correct that this is a marketing technique and I think it is brilliant.
Prior to this morning, I didn't know about Allbirds and now I not only know what they offer, but they have told me exactly why I shouldn't feel good about getting their product cheaper at Amazon.
The event is designed to remind shoppers of the value of local businesses in their community. It should also serve as a reminder to local retailers that their best weapon against the huge national and digital chains is the emotional connection that they have (or can create) with their customers. Algorithms and free shipping don't create an emotional connection.
I love this move by Shoptalk specifically because it is a little over the top. As they indicate in their explanation, they could have simply set a goal of 50/50 representation and "checked off the box" for gender equity, but instead they did something that really sends a message.
For those who see this announcement and think that it's crazy to have the show (or anything) dominated by just one gender, that just might be the feeling they are trying to get you to experience and understand -- it is crazy.
They say they are building a grocery store but, from a strategic standpoint, they probably see the locations as distribution or pick up locations that also allow customers to shop for themselves.
I imagine the layout will be designed for picking efficiency and ease of drive through pick up for groceries and other stuff bought on Amazon.com. Structurally, that might mean doing things like building the aisles and refrigerator/freezer coolers with space behind/between them, so pickers could source the product from behind the shelf, so they don't get in the way of shoppers.
I would also suggest they focus on the power of the Amazon ecosystem and integrate the new stores into that with benefits for customers that use Amazon for both e-commerce and grocery. Promotionally, that might mean not only savings for Prime members when they shop at the grocery store, but also savings off of their annual Prime membership fees for regular grocery shoppers. The goal would be to make Amazon the easy choice for just about everything.
The part that caught my eye was the early (Wednesday) access to Black Friday deals ONLY for Target Circle and RedCard members. That shows me that Target recognizes the power of their Target Circle loyalty program in helping them connect with their customers in a way that Walmart, which doesn't have a loyalty card, can't.
There's a lot of trade press about the power of Amazon's Prime membership and their ability to leverage detailed data on their customers, but Target's move into the loyalty game has not gotten as much visibility. This clever method of driving up enrollment in Target Circle will serve Target well going forward.
This technology won't eradicate counterfeiting, but it will go a long way toward reducing sales to the most profitable segment of the counterfeit customer base, those customers that genuinely believed they were getting the real, branded product.
The other segment which buys the item knowing the deal is "too good to be real" won't be affected.
Amazon recognizes that the biggest obstacle to growing online grocery shopping is overcoming inertia and gaining trial -- many shoppers are simply reluctant to even try online shopping. After the initial experience, online shopping gets easier and some customers become regular users.
This is crazy when evaluated from a profit perspective, but just might be brilliant if Amazon is able to gain consumer trial before their local, brick and mortar competitors (like Walmart) can.
Bill provides a great perspective on loyalty and the power of leveraging data. What I really like is he never loses sight of the goal being to serve the customer and improve the brand or retailer's relationship with the customer.
AI and machine learning can be powerful tools to personalize the experience for shoppers and make them feel known and understood. However too often, the technology is seen as a way to predict what customers will do, so we can manipulate them to serve our needs. That's when it can get creepy and turn customers off.
It is refreshing to see an article on AI that includes discussion of the impact on the customer. Bill reminds us that the long term goal of loyalty marketing is "to establish valuable, long-lasting, mutually beneficial relationships that insulate the brand from competitive offers."
The only emotion retailers should be trying to create is the emotional connection customers feel with the retailer. You accomplish that by improving their experience and making them feel valued, not by triggering negative emotions.
It's hard to fault Amazon for taking $2 million for placement, but in the interest of transparency, I think they should identify the items as sponsored. Amazon currently enjoys being the #1 search site for products partially because they are a great starting point for research. If customers begin to believe that Amazon is creating "fake reviews" or prioritizing big companies, it could undermine their credibility.
Amazon's success has come from their unwavering focus on serving the customer and making it easy for the customer to find and get what they want. If they shift too aggressively toward manipulating customers to serve their own goals or those of their vendors and advertisers, it might damage the trust they have built.
The element of this that I really like is that Best Buy is tapping into Black Friday enthusiasm early, but their guarantee is only to match their own Black Friday pricing and only for rewards members.
Best Buy is in complete control of whether or not any of the items will qualify for a price match. More importantly, competitors can't really respond effectively. Even though Amazon is matching the prices, customers might as well buy at Best Buy just in case the price does go lower.