Turn on the news, and you’re likely to hear about a former retail giant closing stores, laying off employees or even filing for bankruptcy.
More people are turning to Amazon and other e-commerce sites, giving online retail sales an expected growth of 8 to 12 percent.
But the brick-and-mortar retail industry is far from dead. Here’s a glance at how the industry is performing:
- Retail sales for 2017 are expected to increase 7 to 4.2 percent over 2016.
- Wal-Mart’s U.S. comparable sales grew for the 11th consecutive quarter, beating growth estimates.
- Ninety-four percent of all retail sales take place in stores.
Retail companies need to learn how to put their customers first every single day and adapt to their changing wants and needs. If they don’t, the only thing left will be a “For Sale” sign out front.
Secrets to Customer Retention in Retail
The formula for a stellar retention strategy — no matter the industry — requires trust, loyalty, engagement, value and building personal relationships with your customers. There are a variety of ways to achieve those goals, and the best options should be based on what your customers value.
In the past, keeping your shelves stocked, registers open and the occasional discount to bring in shoppers was enough. But now, you’ve got to think more about their overall experience if you want to keep them coming back. Here are a few things customers are looking for:
- Customizable options
- Unique shopping and buying experiences
- Satisfaction guaranteed and easy returns
- Convenient pay and pickup options
- Easy-to-use loyalty programs
- Online and in-store options
So how are some of the industry’s top companies exceeding customer expectations?
Check out these three examples cutting-edge customer retention strategies in the retail industry.
1. Kohl’s and Amazon Join Forces
Online shopping isn’t the problem for retail stores: An unwillingness to evolve is what’s causing them to lose customers. They can’t continue offering the same type and level of services if they want to thrive in this industry.
Kohl’s is a great example of a retail store adapting to the changing industry. Recently, the department store started accepting Amazon.com returns at certain locations. Kohl’s will send back the items to Amazon’s fulfillment center for free.
That looks to be a good partnership for both companies. Kohl’s has the physical store locations, and Amazon has the massive online audience. So instead of working against each other, the two brands are combining their strengths to benefit customers and make the process more convenient.
Kohl’s also started selling some of Amazon’s devices at a few of its stores this summer. They’re improving the overall customer experience, service and (hopefully) brand trust — all important components of retention.
2. Scan & Go at Wal-Mart
The world’s largest retailer, Wal-Mart has begun mimicing some of its online competitor’s business models, expanding its e-commerce offerings. And it’s also taking a new approach in stores to make the shopper’s experience a little easier and unique.
This retailer has had its Self-Checkout for a while, but now it’s also offering a Scan & Go option to cut down on checkout times for customers. Once they enter the store, shoppers can either use the Scan & Go app on their phone or use a provided scanner that rests on the handle of their shopping carts.
Customers can use the devices to scan items they put in their cart, and when they are ready to check out, they can pay via their phone or by using one of the Self-Checkout registers. An employee will check that they’ve paid before they roll out of the store, this time-saving option may help retain customers.
3. Dress Smart at Rebecca Minkoff
One of the major benefits of retail stores compared to e-commerce sites, is that customers can see what they’re purchasing in person. And if they’re in a clothing store, that means a trip to the dressing room.
But those can be a bit dreary, and if they need a different size, they have to redress and head back out to find it. Those are things that can deter customers from making a purchase — the exact opposite of what you’re aiming for with your retention efforts.
For a true wow factor, Oak Labs (founded by former eBay execs) created smart mirrors that retailers like Rebecca Minkoff have added. When a shopper goes into a dressing room, the mirror’s sensors use a radio frequency to ID the clothing. From there, the mirror displays the items on its touchscreen glass.
It can also show customers accessory suggestions, adjust the lighting and allow them change the language shown. And unlike the average mirror, these models are interactive. Customers can also touch the mirror to request a store associate’s help.
Raising the Bar in Retail
At its core, the retail industry should be all about the customer, which makes retention that much more important. Finding ways to meet and exceed their expectations will take your brand above the competition.
“Retail is a customer business. You’re trying to take care of the customer — solve something for the customer. And there’s no way to learn that in the classroom or in the corner office.” — Erik Nordstrom, president, Nordstrom Direct
Keeping your brand about the customer builds trust and loyalty. You may decide a ‘smart’ mirror isn’t the right direction for your brand, but take a page out of these companies’ playbooks and your retention rate just may rise!