The Retailer Winter edition_2020

retail disruption and innovation

Understanding in-store consumer loyalty and its value to your business

DEAN COOKSON MARKETING DIRECTOR purple

THE IMPORTANCE OF EVOLVING CUSTOMER LOYALTY WITHIN OFFLINE RETAIL SPACES AND HOW GUEST WIFI CAN PLAY A ROLE IN ENSURING ITS SUCCESS Customer loyalty is and has been a priority for most retailers for a long, long time. And rightly so. We’re regaled of the cost of acquiring a customer, and how much more cost-effective retaining a customer is. It’s the type of budget investment that is unlikely to raise many eyebrows. Measuring customer loyalty in an online environment is straightforward. Google Analytics has philanthropically enabled every marketing team to understand what’s happening online (and benchmark against peers), while marketing automation and numerous e-commerce applications allow us to stitch together an accurate view of what’s happening, where to focus our efforts and the tools needed to affect changes in behaviour. It becomes murkier when we move out of the digital and into the analogue of the bricks and mortar world. Loyalty cards plug some of the gaps, but only really scratch the surface of what's happening. What does the data tell us? We’re in a fortunate position in that we have access to an enormous amount of data on what is happening in the retail space both in the UK and abroad. 3.5 billion lines of data to be exact, where we can accurately monitor the comings and goings of individuals across a retail estate. We do this through WiFi analytics and a mixture of authenticated data (people that have logged in to the WiFi) and unauthenticated data (people whose mobile devices we can see). It gives us a clear picture of what is happening in a store, who these customers are and how they are behaving. The first lens I’ve looked at this data through is understanding the return rate and the number of visits of individuals over 12 months. The good news is that 37.4% of visitors to stores visit five or more times. Solid evidence that the loyalty schemes are doing their thing. Less positive is the percentage of people that only visit once. 36.92% of customers will make a single visit and you won’t see them again for the rest of the year. The numbers are in line with what we see in the US, but the UK is performing 10% better than the rest of Europe. Regardless, we’re still missing out on a huge opportunity.

The second lens involves looking at recency, what is the average number of days between a visit by an individual. We’ve got a number of people in the “not seen again” column, but what I find really interesting is looking at the other end of that scale. One-third of customers return within one to three days, however, after that it falls off a cliff. This suggests we have a critical (and small) window to engage with customers and do something that will encourage another visit. The numbers suggest that investment in loyalty at the very loyal end of the spectrum is working and doing what it needs to. However, there is an argument to suggest that the majority of people involved in a loyalty scheme are already loyal. When was the last time you signed up for a scheme on your first visit? It rarely happens. Making your guest WiFi work for you The question is, are we doing enough make new visitors return, so we can begin them on the path to true loyalty? Secondly, if we are, are we in a position to be able to track the impact and success of such activity in the same way we would online? I’m willing to guess that your marketing team is experienced in doing all of this using data and insight generated online. Using the same data and insight from your stores, they would be able to apply this expertise more widely and achieve greater success. Think of it in terms of the “you’ve still got stuff in your basket” equivalent for someone that has visited a store. Being able to capture the information of your in-store customers, in an automated and GDPR compliant way, by providing a service that most people have been conditioned to seek out and make use off is an easy win and one that provides an opportunity to deliver personalised and targeted communications during that all-important few days after an initial visit. Get to know more about your customers, communicate to them more effectively - you could have taken it from a marketing textbook. Beyond that, having additional data points around individual store performance allows you to understand the heartbeat of your business in greater depth and the behaviour of your customers more clearly. If POS tells you that two stores achieved the same takings, but one store was able to do it with a much smaller footfall, who were exhibiting greater loyalty and spending more time in the store - wouldn’t you want to know what they were doing so differently?

36.92% of customers will make a single visit and you won’t see them again for the rest of the year.

72 | winter 2020 | the retailer