Defining Customer Loyalty and Driving Retention

Establishing long-term customer loyalty is at the top of every retailer’s wish list. To achieve this, retailers should segment their customer relationship management frameworks by regional audience and pinpoint what their loyalty objectives are trying to solve for. Not only will this help them stand out in the competitive marketplace, but it will also drive greater customer retention.

Gianfranco Cuzziol, International CRM and Personalization Lead for Natura & Co’s Avon brand until February 2024 (and current Business Lead at Dr. Martens), recently discussed the thought process behind developing a global customer relationship management (CRM) framework during an Endless Aisle podcast episode with Marcus LaRobardiere, NewStore’s Vice President of Marketing. Gianfranco and Marcus also defined various types of customer loyalty – including advocacy and retention loyalty – and addressed how those impact consumers’ long-term relationships with brands.

Read below for several key takeaways from Marcus and Gianfranco’s conversation, and click here to listen to the full podcast episode.

Creating a Global CRM Framework 

As the global marketplace grows more crowded, retailers must evolve their CRM frameworks to better reach audiences around the world. According to Gianfranco, retailers should begin this process by developing a common framework and then allowing teams in regional markets to adapt the framework according to their specific needs.

“There is often a need to say, ‘Look, let’s draw a line under this,’” Gianfranco said. “Let’s create this common framework across the globe so we’re protecting the brand. Then, we’ll bring you all up to a certain degree of maturity [to] understand the way we do CRM, automation, personalization…

“That allows you to have some flexibility within the framework to deliver to your requirements, because you have your own objectives, depending on the business unit or the market you’re sitting in.”

This results in retailers needing to create segmentation models based on how customers in various parts of the world prefer to shop.

“We created this segmentation model and a customer lifetime value model for the globe,” Gianfranco said. “But it became apparent that having a global customer lifetime value model didn’t really work. 

“The way that customers transacted and shopped in the far east was completely different to how they transacted in Australia. We then had to drill down and provide a segmentation model that was fit for purpose for each of the four regions.”

CRM Implementation with Cultural Differences

A key piece of developing a strong CRM framework stems from incorporating cultural nuances and ensuring that regional teams understand the rationale behind all decisions.

“Part of the new tech vision data implementation also involved a certain amount of cultural work,” Gianfranco said. “We needed to make sure that we took the regional retail and marketing teams – and digital teams – along the journey, and make sure they were fully bought into that vision. 

“We had consultants in store who were slightly reticent about collecting customer information,” he continued. “So we needed to go through a training exercise to prove to them that there was value in collecting a customer email address and name.”

If sales associates understand the objective behind each step of the framework – and how it impacts them personally – they will be much more likely to develop better customer relationships, which in turn will drive stronger customer loyalty to the brand.

“The welcome journey we implemented was from the store you made your first purchase in,” Gianfranco said. “We want you to have that relationship with the store, if not the consultant as well.

“You spent that time converting that prospect into a customer, and we want to reward you by making sure the customer comes back to you. We did the very simple thing of saying, ‘We can prove to you that for a customer for whom we have an email address, here’s the incremental value it brings back to the business, and hence to your store, by you collecting that.’ And so there was part of that cultural education piece we needed to deliver.”

Defining Customer Loyalty

In addition to developing adaptable CRM frameworks, retailers seeking to prioritize retention should focus on fostering long-term customer loyalty. Part of this strategy includes defining the end goal of driving customer loyalty – whether it’s trying to increase customers’ average basket size, creating brand advocates that will spread the word among friends and family, or retaining existing customers with retail promotion strategies.

“[There are] many definitions of what loyalty is,” Gianfranco said. “It doesn’t matter which organization you work in – try and work out what you mean by loyalty and identify what loyalty means to your customer. [As an example], there’s behavioral loyalty. I shop every day at my local mini-mart. I’m not necessarily loyal to them; it’s just that they happen to be about 50 yards from my house.

“And then you’ve got advocacy loyalty,” he continued. “If you come up to me and say, ‘Would you recommend a BMW as a car,’ I would say yes. I don’t own a BMW, but I have owned [a] BMW, and it’s an amazing driving experience. 

“And then there’s retention loyalty [where] lots of freebies come my way. You need to make sure you think about loyalty, what it means, and whether you’re trying to drive loyalty, [or] whether in reality what you’re trying to drive is more frequent purchase.”

Developing Customer Personas

Gianfranco also noted that developing customer personas yields better personalization opportunities. A customer persona refers to an archetypal profile of a target customer, complete with behaviors, needs, and motivations.

“I think personas have their place and often [are] the starting point to more refined personalization,” Gianfranco said. “For example, when a customer first comes to your website, you know nothing about that customer. You might know where they’ve come from because you’ve tracked where they’ve clicked in from. You start to understand the product they’re looking at. 

“But as you start to acquire data points about that customer, as they spend time on that website, as they perhaps register [for] a newsletter or talk to your agent online – that’s when you can start moving into more sophisticated, relevant conversations with that customer,” he continued.

“[For example], in the beauty space, you’ve bought a cleanser and a toner. Here’s the hydrator that goes along with that. You need to make sure the information you’re giving a customer is relevant to that particular product – how to use it; when you should be replenishing that product; what’s an alternative if it’s not right for you.”

Balancing Customer Personalization with Privacy

While customer personalization is key to attaining and retaining shoppers, it’s also imperative to keep in mind that privacy is a top concern for many individuals, especially as AI in retail continues gaining momentum. Therefore, retailers must be forthcoming about their privacy policies and remain compliant with them in order to maintain customers’ trust.

“There’s this privacy personalization paradox – customers want a personalized, relevant, connected experience, but they also want you to be mindful of their privacy,” Gianfranco said. 

“What I found is that upfront, if you can be as transparent and honest as possible with customers, they’re more likely to trust you with their data. Be consistent with the way you apply that – don’t all of a sudden change the way you use the data without having talked to the customer.”

Connected, Adaptive, and Relevant Shopping Experiences

Gianfranco also discussed the components of an ideal shopping experience, which hinge on retailers’ understanding that all customers begin their journeys with a specific mission in mind.

“With all this data and technology around at the moment, we have to remember that customers are on a mission,” Gianfranco said. “It could be, ‘I want to buy something really quickly. I’m going to do some research. I want to provide some feedback.’ So that’s the core piece we need to think about. What is the customer trying to do, and then how do we spin out the technology data and experience to deliver on that in the way the customer wants?

“I often talk about the ideal shopping experience…I call it CAR,” he continued. “It needs to be Connected, Adaptive, and Relevant. Because the customer’s trying to get from A to B, and that’s what CAR is there for us to do. You have to adapt that experience to meet [their] need.”

Prioritizing Customer Retention

Once retailers determine the type of customer loyalty they’re aiming for, they should then brainstorm strategies to prioritize customer retention. While reaching new audiences should always be a priority, the benefits of fostering long-term relationships with consumers can’t be overstated.

“We should be thinking about retaining customers more – treating our customers better,” Gianfranco said. “There are lots of numbers around how much more expensive it is to acquire new customers than retain an existing one. The one thing to bear in mind is that good acquisition makes good retention. 

“If you nail [retention loyalty], [it] then reduces your advertising costs, acquisition costs,” he continued. “And by nailing that and understanding what makes a good customer, it allows you to be smart in the acquisition space. You spend all that time and effort getting a new customer on board…don’t lose them.”

Interested in learning how your business can foster stronger customer loyalty and drive retention? Speak to one of our experts today.

Untuckit employee helping customer while using NewStore technology

Why Self-Checkout POS Systems Are Revitalizing Retail

As retailers aim to streamline in-store shopping experiences and appeal to digitally-savvy consumers, offering self-checkout POS (point of sale) options is an often-used strategy.

Self-checkout is gaining  more popularity among retailers in a variety of sectors – spanning apparel to groceries – due to its convenience and efficiency. Brands seeking to drive more sales, especially during the busy holiday season, should consider investing in self-checkout POS systems to create better experiences for shoppers and sales associates alike.

What is Self-Checkout?

Self-checkout is a point-of-sale system that enables consumers to pay for their purchases via an in-store kiosk or retailer’s mobile app in lieu of visiting a checkout counter. Customers can either scan their desired items’ barcodes, stand near the kiosks if the items are equipped with RFID technology, or look up the items to add them to their digital shopping carts, depending on the type of system. They can then use a digital payment method, such as Apple Pay or a saved credit card in their account, to complete their purchase.

Some retailers may place self-service kiosks around their brick-and-mortar stores, while others may offer self-checkout choices via their mobile apps. Both options allow shoppers to check out at various points in the store and avoid waiting in long lines.

Rising Consumer Interest in Self-Checkout Services

Convenience is a top priority for most shoppers these days, regardless of whether they’re shopping online or in stores. Consumers who prefer the in-store route are growing more interested in using self-service checkout options to save time and maximize efficiency during their shopping trips.

According to PYMNTS’s 2023 Digital-First Banking Tracker Series Report, 84% of U.S. shoppers like using self-service kiosks. Furthermore, 82% of consumers reported that they will avoid retailers with lines of any kind.

While certain generations are more partial to self-checkout POS systems – for example, 84% of Generation Z consumers prefer self-service options – retailers must adapt to this growing demand in order to provide more seamless checkout experiences.

Read below to find out more about the popular types of self-checkout POS options and how they offer advantages for both retailers and shoppers.

Examples of Self-Checkout POS Options 

RFID-Enabled Kiosks

Some retailers leverage RFID-enabled kiosks in their brick-and-mortar locations. RFID technology lets companies track products from initial shipment to the point of checkout. They can use wireless communication to assign a unique identifier tag to each item. 

As soon as consumers pick up these items in a store, the RFID technology will track the items from the shelf to the checkout kiosk. When shoppers approach a kiosk, its sensors will read the tags. Shoppers will then confirm that their digital cart is accurate and proceed to the payment process.

Apparel retailer Zara was an early adopter of self-checkout kiosks, which guide shoppers through the checkout experience via touchscreen instructions. Consumers can simply carry their desired items to the kiosk, which automatically detects the items and rings them up. 

Grab and Go

One of the largest retailers in the world, Amazon, offers grab-and-go self-checkout options in its brick-and-mortar Amazon Go stores. Grab-and-go services eliminate the checkout process entirely. Consumers can walk into the store, retrieve items from the shelves, and leave the store without having to open their wallets. The grab-and-go technology detects when items are removed from their shelves and carried out of the store, and it charges shoppers’ accounts for their purchase upon leaving the premises.

Mobile App-Enabled Checkout

Some brands offer in-store shoppers the ability to check out via their mobile app. For example, Walmart shoppers can open the Walmart app on their phones when they’re ready to check out, navigate to store mode and select the scan-and-go feature, and enable location access. 

Then, customers can use their phones to scan the items’ barcodes and verify that the app captured everything correctly. Once they confirm their cart is accurate, they can head to a self-checkout station and scan the in-app QR code to complete their purchase.

Self-Checkout Advantages for Shoppers

Self-checkout POS options also provide many perks for shoppers. Several major advantages include the following:

Convenience: Self-checkout POS options offer several types of conveniences. Firstly, consumers can enjoy much faster checkout experiences. Secondly, those opting to use self-checkout services do not need to carry their wallets with them, as they can leverage digital payment methods like Tap to Pay on iPhone

Privacy: Consumers who want more privacy over their purchase may choose to use self-checkout POS options. This way, they will not interact with any store associates or other shoppers, and they can complete their purchase via app or self-service kiosk with anonymity.

Efficiency: Self-checkout is very efficient during peak shopping periods, such as the holiday season, as consumers can avoid long lines. Time-strapped shoppers planning to make small purchases may choose to visit a particular retailer’s store if they discover self-checkout options are available.

Self-Checkout Advantages for Retailers

Similarly, self-checkout POS provides many advantages for retail brands, including the following:

Better Associate Productivity: Thanks to self-checkout POS systems, store associates can spend more time walking around the sales floor and assisting customers, rather than staffing the checkout counter. This allows for customers to receive more personalized experiences, which may inspire them to purchase more items. Additionally, associates that have flexibility to interact with shoppers can engage in upselling and cross-selling to increase the shoppers’ average basket size.

Higher In-Store Foot Traffic: Consumers with limited time to spare may be willing to visit a brick-and-mortar location boasting self-checkout options in a bid to avoid long lines. Additionally, as mentioned above, self-checkout POS options attract more privacy-driven customers who prefer to keep associate interactions to a minimum. These guarantees of convenience result in higher foot traffic in stores, where drop-in shoppers may spot items they decide to add to their carts at the last minute.

Enhanced Store Displays: Retailers that invest in self-checkout POS systems will need to dedicate less square footage to cumbersome checkout counters and areas for long lines. This frees up space on their sales floors to showcase more inventory, which may attract more shoppers and help fuel sales.

Promoting Self-Checkout POS Options to Customers

Retailers that choose to invest in self-checkout POS systems should market them to customers by highlighting the major advantages of convenience, efficiency, and privacy. Some promotional tactics can include:

  • Sending push notifications in their mobile apps to inform users about shopping in “store mode” and leveraging self-checkout options
  • Placing signage around brick-and-mortar locations to indicate where self-service kiosks are stationed
  • Encouraging store associates to spread the word about self-checkout options, especially during peak shopping periods
  • Promoting self-checkout when customers shop in the app or on the website and select a reserve online pickup in-store (ROPIS) fulfillment option

Ultimately, with consumer interest in convenience-driven shopping options reaching an all-time high, retailers should consider deploying self-checkout POS systems in their brick-and-mortar stores. Not only will this help associates spend additional time with customers, but it will result in a true omnichannel-friendly shopping experience. The opportunities for self-checkout are vast – and today’s available technology makes them all the more attainable.

Interested in learning how your business can take advantage of self-checkout POS options? Reach out for a demo today.