Retailers Take Different Paths to Build Loyalty
By George Anderson
Chico’s, Men’s Wearhouse and Victoria’s Secret are profiled in a San Antonio Express-News opinion column by Dave Beck, president, chief business banking officer at Frost Bank, to receive special recognition for their ability to attract and keep shoppers coming back to their stores.
Chico’s, the women’s clothing store catering to baby boomers looking for apparel that combines design sophistication and comfort, is lauded for its Passport Club. As Mr. Beck points out, “Joining is easy – just buy $500 worth of clothing and you’re enrolled. You’re then entitled to a five percent discount for life, and in addition, you’ll receive catalogs including coupons and additional savings, and invitations to special events for Passport Club members.”
Men’s Wearhouse receives kudos for its own shopper reward program but it is the retailer’s customer service that makes it stand out.
Mr. Beck writes, “One of my colleagues who recently went to Men’s Wearhouse to buy a suit for a wedding reported a strategy I found interesting. While he was in the dressing room making sure the suit fit, the saleswoman created several ‘looks’ for the suit. She gathered several shirt-and-tie combinations that color-coordinated with the suit, ranging from business attire to more festive looks for weddings and parties. When he emerged from the dressing room, the choices were there to be reviewed, and he picked several combinations he liked.”
Victoria’s Secret is no secret, writes Mr. Beck. “What impresses me about this store most is that it’s designed a specific shopping experience for women that is unique to that brand. Colleagues say the goal at Victoria’s Secret, which of course specializes in women’s lingerie, is to get men out of the store quickly with a purchase, but to get women to pick up multiple items to try on and then buy.”
To achieve this goal, writes Mr. Beck, Victoria’s Secret has focused in part on the dressing room experience. “Many stores have policies that are engineered to discourage shoplifting and create controls; you’ve all seen signs limiting you to three items in a dressing room. But Victoria’s Secret has a different approach. It understands that once a woman is committed to undressing and trying on undergarments, it’s a big deal if she has to get dressed again to retrieve additional items. She wants to bring all the items that interest her into the dressing room at once. Victoria Secret employees are also stationed near the dressing rooms to bring customers other sizes and styles and enhance the shopping experience.”
Moderator’s Comment: What lessons do you think the three retailers in the San Antonio Express-News column have to offer others about building
shopper loyalty? Are there other retailers who offer lessons on how to go about developing loyal customers? How do they do it?
– George Anderson – Moderator
I think the one general thing that binds all three is the attention to customer service and actually engaging the customer in conversation, making them feel more comfortable in their environment and, therefore, stay longer. And the longer you stay in a store, the more likely you are to buy something.
However, when you look at all three you will see that their people are very good at suggestive selling. Take Chico’s. If a woman is trying on a blouse, there will be a salesperson nearby to show her how well a jacket, a skirt or a piece of jewelry goes with it.
Suggestive selling can be a very powerful tool when used properly. I think some of those principles can be applied to food retailing.
Karen and Mark have hit the highlights here, I think. These retailers have each designed their selection and fitting room practices to suit their types of products and customers. Their exclusive brands provide sufficient margins to support superior service practices.
Frequent shopper card programs are used to demonstrate these companies’ loyalty to customers. Customer experience is primary – so the incentive to return and buy again precedes the card-based reward: first make it convenient and satisfying to shop; then demonstrate the store’s loyalty to the shopper through consistent service practices and policies; finally reward regulars with extra value using the card as a means of recognition.
As mentioned by others comments, the common thread isn’t really the 5% discount for life, the rewards earned on a card, or other superficial rewards. None of these outweigh the consumer’s experience at any retailer. Experience is where loyalty is founded and what makes a consumer return. Making the shopping experience more satisfactory, enjoyable, exciting, (enter your own adjective) is what is key to a return visit. It’s even more important on more durable goods.
You can’t CONTROL your way to growth; you can only SELL your way to growth. Clearly, these three retailers are in the business of selling.
Consumers like to be sold (on their own terms), and they resent controls. Victoria’s Secret’s understanding of a woman’s preference to try on a whole bunch of stuff at once caused them to relax control of the number of items allowed in a dressing room. Men’s Wearhouse (where I shop) understands that men are buyers, not shoppers, and responds by actively selling them alternate looks for a suit purchase.
Chico’s spotted a widening gap between trendy women’s fashion and what boomer babes actually look good and feel comfortable in. So, they sold the idea that non-trendy, comfortable, classic styles are appropriate.
You can always tell when bean counters take over a company. Controls ensue, and selling takes a back seat.
Too many retailers are dominated by the operations side of the business. Operations is about stripping down, being economical and providing the same or comparable “experience” for less than their competition. This actually creates a culture of sameness rather than specific, unique brand experiences for shoppers. There is, as always, much more copying in retail than individual expressions.
Chico’s treats their customers like friends. Their rewards program is like an invitation to come over and visit. It’s simple, personal. Men’s Wearhouse knows the tendencies of male shoppers and preempts them with the helpful suggestive sell. Victoria’s Secret also knows that a woman in a dressing room is an 80% conversion rate and adding on is easy at that point. The dressing room is the real sales floor. All else is prelude.
Chico’s is an example of a concerted corporate marketing effort. It builds interest and familiarity before your return shopping engagement. That’s smart. That’s connecting.
I think you trace the status quo to operations dominated organizations.
All 3 retailers have these 3 things in common:
1. Their margins are based on exclusive products, so they have enough money to enhance the shopping experience
2. They’ve put themselves in their customers’ shoes so they know appropriate marketing levers to pull
3. They’ve invested money, taken from the margins, to pull the right levers.
Many retailers have trouble building assortments that have enough margin to invest in shopping experience enhancements. And many retailers with the excellent margins do not invest the money appropriately.
I’ve been very impressed with the service in all three stores. I laud Victoria’s Secret in particular for their ability to create a sexy image in their marketing yet provide un-intimidating and efficient service to all kinds of women at the store level. Their saleswomen wear their measuring tapes as stylish accessories while accompanying women to dressing rooms for permission-based physical intrusions. . .all without the least bit of discomfort on either side. That’s quite a feat. On one visit, I watched as two saleswomen deftly fitted an overweight woman with a crew cut in one room and a midriff-bearing teen and her mother in the next. Their displays are beautiful and classy and checkout is efficient. Though quality can leave a bit to be desired, the store experience more than offsets it and they are positioned as the true alternative to department store and mass intimates mayhem.
I like the simplicity of the Chico’s loyalty program – $500 and you’re in. Contrast that with one at a retailer I frequent – Staples. There, you have to spend $200 per quarter or some such number, to get rewards dollars. My last statement, I had spent $168, so I got a check in the mail for $0, which I can spend only at their store. Not the way to generate a lot of loyalty.
Besides suggestive selling, the winning aspect of these successful companies is the fact that they clearly thought through the buying process in each of their outlets, which differ from one another. Knowing, for example, that women in VS are not likely to undress more than once shows they are paying attention to their customers and the ways in which they shop.
There is no retail outlet that cannot benefit from simply paying attention to how their customers shop and discovering ways to smooth the process.
“It’s the EXPERIENCE stupid!” Creating a unique, thoughtful and pleasurable customer experience will give you more loyalty, higher per customer sales and ultimately more bottom line profit than any other strategy. Saving a little money in the process is great but that’s the icing. Going back and back again because you love the experience of shopping in a place is the cake. To the great retail names in the article, I’d add Jos. A. Bank to the list. Yeah, I get 20% off because I’m in some club thing with them, but I go back frequently “just to see what they’ve got in” because they are extremely knowledgeable people who have fun doing what they do. I like the experience and I’ve bought something every time I’ve gone in.
In all the three cases, the one thing most important is that the salesperson is understanding the specific needs and providing options to the customer. Today, customers need to see all his choices before he makes his purchase, however, suggestive selling and a customised approach to customer buying helps to make a customer loyal. Discounts do help but what is more important than that is the FRIENDLY EXPERTISE which a salesperson demonstrates during his or her conversation.
FRIENDLY would mean paying attention to the customer and informing; making him/her comfortable, and EXPERTISE would mean knowing all about the product and suggesting and helping him/her to get the right merchandise.