Loyalty360 talks to a plethora of experts in the loyalty industry on a weekly basis and one of the compelling questions we like to ask is: How are customers changing and how can companies adapt to these changes to gain optimum engagement and loyalty?
 
Andy Sperry, VP of Marketing for The Renew Co.—which owns Magazines.com and NaturalHealthyConcepts.com—offered Loyalty360 his intriguing thoughts pertaining to that question.
 
“The primary change is that they expect to be treated on a 1-to-1 basis,” Sperry explained. “We have two stores with two different customer bases with tens of thousands of customers in each. Throw in a total catalog of about 20,000 products and the magnitude of the 1-to-1 treatment becomes a nightmare. Fortunately, artificial intelligence is helping, but we’re not there yet. As an example, if I go to a Target retail store today and look at red board shorts for an upcoming beach vacation, but I don’t make a purchase, and then stop into a local Walmart 30 minutes later, in a perfect world, what should Walmart do? When I walk in the front door, they should have the men’s bathing suit section front and center, with all of the red bathing suits proudly displayed most visibly with the red board shorts as the centerpiece. That gives them the greatest percent chance that I’ll make a purchase.”
 
But, Sperry added: “That’s a ridiculous offline example. But online, we are getting to the point that we know what people are already in the market for. And AI, paired with dynamic website building, can do almost exactly what I described as impossible offline. And here’s how that plays into optimum engagement and loyalty. If you give me an experience where I walk away thinking, ‘Those people really get me,’ you’ve just created a loyal customer. One who is likely to tell other people like him about you.”
 
How is The Renew Co. adapting?
 
“We’re using tools on our websites and via email to deliver that 1-to-1 marketing experience,” Sperry said. “Do I think we’re great at it today? Can we rearrange our stores around each customer today? No. But we’ll get there. We’re also recognizing that just because we got married (a customer bought something) that we shouldn’t stop dating. We continue to invest in our customers with rewards points and discounted offers to remind them we appreciate them, and content to entertain and enlighten, and remind them we’re still doing life together.” 
 
What’s more, Sperry talked about the current state of customer engagement in the online marketplace.
 
“It’s definitely an oversimplification, but in my mind, I divide individual online ‘shopping trips’ into two camps: Those where the consumer is shopping to make a pre-determined transaction, and those where they’re looking to find, learn, or experience something new,” Sperry explained. “The transactional instance is much like the local brick-and-mortar shopping experience of going to Target or Kroger to buy exactly what you already know you need. You know they’ll have what you want, and you’ll get a reasonable price. The big boys online like Amazon.com and Walmart.com own that space clearly. Smaller stores like those we own (Magazines.com and NaturalHealthyConcepts.com) also play in that same space on a much smaller scale.

The second instance is more like browsing a small-town street of boutique stores. You don’t know exactly what you’re looking for, but you’re enjoying the experience of finding interesting things and learning about products you didn’t know existed before. Given the choice of transactional shopping (going to Kroger to get milk) or experiential shopping (let’s see what we can find in this outdoor adventure gear store), I much prefer the latter. Both, however, serve important roles in my life.”
 
When it comes to engagement, Sperry said he doesn’t want or need a relationship with Lowe’s or Amazon beyond the transaction.
 
“I want them to make sure they keep the stuff I want in stock and make it easy to get at a fair price,” Sperry added. “That’s our unwritten contract. I don’t care if we ‘date.’ You make my life easy, and I’ll give you my business as long as you don’t break the unspoken relational rules—in stock, fair price, easy transaction. It’s also worth mentioning that we begin the relationship with loaned trust, meaning I loan these big brands my trust because they have earned it with lots of other people. I’m willing to take it back if they don't hold up their end, but they don’t really need to earn it up front.”
 
The experiential shopping excursion, however, is quite different.
 
“Many times, I’m shopping in places I’ve never been before or heard of before,” Sperry said. “Online and offline, these boutiques are exciting and scary. I’m not loaning any of them my trust up front. I’m reading product and store reviews and evaluating the sketchiness of the store clerks. I’m wondering if they’ll steal my credit card number or ship my product out anytime soon. Because the items aren’t commodity items, I’m concerned that I might be paying too much, so I’m more likely to shop around before committing. I’m hesitant to jump right in and make a purchase.

“I’m less hesitant if we date a little. Offer me a 10 percent discount, give me some great free content, promise me fast and free shipping, etc. In other words, the customer engagement bar is very high for these stores. I’m not coming in to grab a gallon of milk. I’m coming in to browse, and I’m not sure I trust you or that you have anything to offer me. When you do initiate a relationship with me, the barriers start to crumble. And if you then deliver a good product, good experience, I’m much more likely to share that with my friends. I already know they are all familiar with Target.com. It’s the boutiques that have the real opportunity to have loyal customers create more loyal customers.”

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