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In uncertain times, we are all looking for some guidance on what might come next and how we can prepare for those changes. One of the most effective ways to predict the future is to ask the opinion of the real loyalty industry expertsâthose people who understand both the short-term trends and the long-term shifts within the industry.
We spoke to Louise Hutchins, Managing Director of The Loyalty People, CCO of Swapiand former Head of Loyalty at Marks and Spencer. With over 16 years of experience, Louise is an authority on Customer Experience and Customer Strategy. Sheâs also a forward-thinker who believes that data must be at the heart of every business decision.
Here are her thoughts on where the loyalty in the fashion industry is today and what the coming months and years will bring:
Louise: Firstly, COVID has had a significant impact on the categories that customers are buying into with loungewear, slippers, and pajamas all seeing significant growth, as we look for comfort as our primary need. I also anticipate that value will become a primary driver for the large majority. Â As we identify with our âNew Normalâ, we will see levels of focus flex in terms of need states, but I think the impact of office closures, flexible working, and the re-evaluation of how we work. For example, the formal clothing industry will be heavily impacted and will need to diversify to remain relevant.
Louise: People now have a digital-first mentality. The impact of having to wear face masks in clothing shops will impact dwell time and in-store purchases. As always, customers want a quick, convenient, and frictionless experience. Retailers should be focusing on their infrastructure and ability to deliver this expected seamless experience, both digitally and in store.
It certainly wonât be the âdeath of the high streetâ just yet, though, and we have seen a focus on local and boutique experiences, supporting smaller businesses that have been heavily impacted by the economic crisis. In order to win on the high street, brands will need to focus on how stores are usedâwhether this is the concept of mini distribution centers to fulfill online deliveries or examples like Alibaba in China creating a beyond purchase experience, bringing in the mentality of a theater within the store.
A High-Tech Retail Experience in China from Alibaba Group
Louise: Ultimately, this is no different from before: stay relevant, recognize the need states of your customer, and solve for them. Identify how to elevate the so-called experiential side of your brand; be restless in creating the best customer experience; know what points differentiate you from competitors and capitalize on them.
Use a data-led customer strategy to provide a personalized experience in either CRM or Loyalty (or both). The age-old saying âshow me you know meâ is now an expectation from customers. According to Salesforce, 51% (source: Forbes) of consumers expect that companies will anticipate their needs and make relevant suggestions before they make contact.
Louise: Loyalty is changing; you can no longer just provide âfunctional loyaltyâ as the âbasic earn-and-burnâ mechanics are worn out and overused. Building a program with a greater focus on emotional benefits can significantly enhance the perception of the brand and drive customer lifetime value (CLV). Think about charity, sustainability, community, and genuine 1:1 thank yous. Put these alongside functional benefits that are tangible and quantifiable and you have found the sweet spot for an attractive proposition.
Louise: Ultimately, campaigns that are based on behaviors rather than sweeping generic above-the-line mass marketing. The best in class use a data-led, analytical approach to segmenting their audiences and creating relevant triggers based on behavior. If someone has recently bought a new top, share inspiration on how they can complete their outfit; think about logical next best-action behaviors that feel personalized, and keep the customer coming back.
With loyalty in the grocery sector, there is immediate business gratification as the frequency of shopping is obviously higher. In fashion, itâs a slower burn proposition; you want the customer to keep returning and increasing their share of wallet with you, so relevant functional benefits that make it easy to shop with youâcombined with a level of emotional engagementâshould keep you front of mind.
Louise: As mentioned, think about the benefits offered and ensure that you have a good blend of emotional and functional rewards to offer. Keep it simple. The more complicated a program isâand the more hoops there are to jump throughâthe more likely it is that customers will switch off. Go digital. It is the future and it is expected. Plus, the more digital the behavior, the easier it is to access and understand the data.
Louise: These are exciting times to be in Loyalty and CRM. There will be more automated personalization, hyper-sophisticated growth, and targeting models at the touch of a button, with the increased capability of machine learning. Weâll also see a broader level of benefits, with a focus on emotional rewards being the point of difference and more power in the customerâs hands. I also see that more and more customers demand the ability to swap points across loyalty schemes and across industries. Driving spend back into the economy is a win-win and an absolute game-changer for the industry!
Thanks to Louise for sharing her vast experience and advice on how the fashion brands can run a successful loyalty program in the post-COVID economy.
Hereâre the most important takeaways:
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