Customer Acquisition and Retention Strategies in Fashion
The following blog post from Listrak’s Ross Kramer was published by iMedia Connection on October 30, 2014:
I recently had the opportunity to moderate a panel of leading fashion retailers at Fashion Digital New York that focused on the ever-challenging topic of customer acquisition and retention. Prior to our discussion, the morning’s keynote speaker had left attendees with the edict that it’s their collective job to create fantastic experiences online to increase purchase intent in retail. It was a perfect lead-in to our session, because it’s those experiences that set the table for customer acquisition and that position retailers’ brands for better retention over time.
But while that may sound simple, it’s easier said than done. At Listrak, we’ve compiled data from nearly a thousand retailers over several years that shows that a mere 15-20% of customers buy from a retailer’s website more than once. The vast amount of choices online has resulted in reduced customer retention and loyalty, making it a larger hurdle than ever for retailers to turn first-time buyers into two-time buyers, the crucial step that doubles the likelihood that they will purchase again.
In our discussion, our panelists shared the latest acquisition and retention strategies they’re implementing:
Retailers need to amplify the experiences of Brand Influencers to tell their stories online. For example, one retailer has been using “ambassadors’” stories from social media to create content that is resulting in higher retention. The retailer is curating content from social sources such as Instagram, YouTube and Vine, and using it to create stories that are then shared onsite, in social media and in email.
The key to this strategy, it was noted, is finding the right influencers in different channels.
Facebook Custom Audiences
This approach to reaching customers and finding more shoppers like your best customers is proving to be effective both for acquisition and product discovery. It is also a way to optimize the value of your email subscriber list.
Retailers can upload a list of their best email subscribers to Facebook and then target them with similar email and Facebook messaging. In addition, retailers can provide Facebook with segmented lists of subscribers to create look-alike models to reach Facebook users in niche audiences - i.e. plus size women who purchase colored jeans - so retailers can present more products to more prospective customers.
To stretch their search budgets, what is still working for brands and retailers is using non-branded, longtail keywords. The key is identifying very specific, descriptive words that consumers may use to search for products and then building out related optimized landing pages.
Brick and Mortar for Email Acquisition
For retailers with brick and mortar presence, stores can be one of their largest sources of acquisition for the email channel. The key to maximizing this strategy is to properly train store staff to consistently ask for email addresses at checkout. It is also important to provide a reason for shoppers to share their addresses, for example to receive e-receipts, and to communicate expectations such as receiving weekly offers and new product announcements.
Two of the retailers on the panel are currently experimenting with the relatively new Like2Buy service from Curalate, which makes Instragram shoppable.
Described as the “missing link” between traffic and revenue, Like2Buy technology allows fans to click the link at the top of a brand’s Instagram profile page to see a grid of all the items on sale from the retailer’s feed. Clicking again takes the user to the retailer’s secure mobile site. In addition, the technology can be used as a curation tool for shoppers, who can create personal wish lists or save items to buy later by liking product photos.
The key to successfully using retargeting to prompt a first-time buyer to make a second purchase is to present dynamic retargeting featuring the products that the customer is most likely to buy next. For example, if she just bought a phone, use retargeting to present her with a case or charger, or if he just purchased a suit, present him with dress shirts or ties.
The retailers on the panel agreed that CRM is the next wave of retargeting they expect to see.
Email is still a highly effective way to stay in front of customers with the right message at the right time in the customer lifecycle to keep them engaged and purchasing. Upon earning the first sale from a subscriber, a retailer can continue to engage her with order and shipping confirmations, thank you emails and marketing emails featuring products based on the first purchase, all of which are effective at prompting future conversions.
The key to optimizing email marketing is to know where different subscribers fall in the lifecycle, including the recency, frequency and AOV of their purchases, as well as personal preferences and detailed purchase information, and to use the data to communicate relevantly and effectively. For example, active buyers can be prompted to continue to purchase with a loyalty campaign, and those who may become latent can be reached with messages and promotions, if necessary, to win them back, all personalized based on available data.