Guest Column: Building Loyalty in a Digital Age

by Michael Griffiths, global product director of retail, Microsoft Business Solutions

This article appeared in Integrated Solutions for Retailers

It wasn’t that long ago that building loyalty for the typical brick-and-mortarretailer was fairly straightforward. Businesses could rely on in-store relationshipsand customer service to keep shoppers coming back. But the new reality of Web 2.0, social media and mobile apps means it’s tougher than ever to stand out,stay relevant, and create those differentiated experiences that motivate customers to come back soon – and often.

Today’s consumers are empowered as never before - carrying with them immediate access to the world through mobile, connected devices. With just one touch they can compare products, review competitive pricing information and order online – often using real-time product reviews found online to inform their choices. And with 56 percent of shoppers visiting Facebook pages to stay up-to-date on sales and promotions, it’s not just the one-off purchase that’s at risk during a visit to the shopping mall – it’s the very relationship between retailer and customer that’s at stake.

Just as technology has delivered dramatic leaps forward for consumers, retailers are now realizing the critical role that technology must play to enable their business. So how do retailers earn and maintain the loyalty of today’s digitally empowered consumer, while taking advantage of opportunities in ‘social commerce’ to increase brand visibility and relevance?

Multichannel capability

In this new retail paradigm, delivering a consummate seamless multichannel retail experience is the key to winning consumer hearts and minds, especially when it comes to offering the value-added service and recognition that help retailers deliver on their brand promise. The concept of ‘the customer is king’ is not a new one. However, interpreting the multifaceted interactions with your customers and offering the services to please them is more complex today than ever before.

Today’s retailer can only gain a deep understanding of what consumers expect through true ‘omnichannel’ retail – combining the right personalized communication, relevant information and offers, at the right time, via the right channel. But it is the transparency, connection, and consistency of these insights that will define success.

Real-time multichannel insights and synchronization

The power of choice which has created such freedom and flexibility for customers has produced a new imperative for retailers – serving customers how, when and where they want to shop, but doing so with consistency. One customer may buy on-line but choose to pick-up in store. Another may browse on-line, but only purchases when in a physical store location. Finally, others may start the experience on-line and choose to recall that activity on a mobile device while in the store. Achieving this level of complete integration between on-line and off-line operations – blurring that line - requires a highly integrated retail platform that makes such optimized and unified customer interactions possible.

Intelligent agility

With the fight for customer loyalty becoming more fierce, it is imperative to stay engaged with the consumer throughout the buying process, using customer intelligence gained along the way to refine store execution strategies – from determining how best to allocate or replenish products to boost store performance, to defining an optimal pricing strategy, or deciding what promotions to run and how to align these to customer preferences.

The retailer must be agile and responsive. And that means linking all areas of the retail operation end-to-end – from POS and inventory management to sales performance tracking, stock ordering and management and payment processing, to a customer’s entire purchasing history and preferences. Ultimately this means using the data and intelligence assimilated by the technology to not only track the retail business but to optimize and drive the retail business. This is how retailers go from reactive to proactive.

Giving staff and customers visibility into inventory

Nowhere is the need for seamless IT integration across the entire retail enterprise better illustrated than real-time inventory visibility. Today’s lean retail inventories mean that in-store, en route or at a distribution center – retailers need to fulfil customer expectations and make sure they capitalize on every sales opportunity. And that means integrating warehouse management, order management, POS – and more – to show precise inventory levels to customers. The question for retailers is can their technology do this without the need for complex middleware – does the solution architecture provide this as foundation of its design?

Delivering on the in-store service promise

Multichannel retailers know that differentiating the in-store shopping experience is a central component of winning the loyalty battle. Nowadays, consumers are highly connected and often better informed than in-store personnel. But giving sales assistants powerful role-based access to product information, inventory and customer histories via POS technologies empowers the associate - allowing them to demonstrate recognition of customer preferences and deliver the personal experience customers expect.

Personal and seamless differentiation

One thing is clear. Buying customer loyalty through discounting and promotion alone makes it difficult to maintain the brand or bottom line, and sets the tone for a relationship where customers always expect a ‘deal’. This places retailers at the whim of customers chasing the best deal and whose only loyalty is to the lowest price.

But creating differentiation that expands the overall shopping experience – regardless of channel – and provides personalized recognition of shoppers wants, needs and aspirations creates a value-add relationship that makes a retail brand stand out from the crowd. It is crucial to establish enduring relationships where customer loyalty is earned and repaid, so that customers come to view a retail brand as its single, trusted supplier of choice. But creating a shopping experience that’s second to none depends more than ever on delivering a customer-centric and connected experience that keeps the retailer at the forefront of the consumer’s mind.

Achieving this requires seamless integration across the entire IT retail technology ecosystem. Yet many retailers are being hampered from delivering their new retail vision, thanks to disconnected applications and IT systems that make it impossible to build those all important ‘real-time connected bridges’ across their entire spectrum of retail activities.

And it’s here that the right technology plays an indispensable role in helping retailers to evolve and compete in a new retail landscape. Retailers are realizing that not all solutions are created equal – architecture; ease of use; global scale; and multi-channel management must be in the DNA of a solution and at the core of its development strategy. Older technologies and disparate systems cobbled together will give way to solutions that make real-time merchandising and multichannel synchronization possible; empowering through fully unified and connected POS and offering CRM that delivers deep customer insights to power a new era of customer experience.