Happy birthday to Blue Acorn’s CEO, who’s aging-up celebration I partially hold responsible for the tardiness of this report, although I won’t delay you any further. Here are the CliffsNotes of my favorite sessions from the second day of Shoptalk.
Build Loyal Communities
“Loyalty” is not the buzz this year at Shoptalk, but the brands on this panel managed to hold my full attention. Loyalty isn’t the “it” word right now, but so many of the topics covered in this year’s sessions drive loyalty, even when they refer to more specific metrics. Before I break it down, I want to give props to moderator Shar VanBoskirk of Forrester who impressed with her ability to draw and distil the insights of the panel members much better than I could have.
Rainer Castillo, Co-Founder of Chubbies, started by reminding the audience that the definition of a loyal customer has evolved to include more than those who spend a lot of money; and that thinking otherwise is shortsighted. His loyalty philosophy is simple: find pockets of people who really understand what you do, and start a two-way conversation.
Specifically, Chubbies invites loyal customers into the process of what the product might be, while providing guardrails to make sure that the results fall within the brand vision. For example, influencers might get a sneak peak of ten ideas and a chance to provide feedback. You can think of them as focus groups that foster loyalty and raise social and word-of-mouth awareness around new products.
For their most loyal customers, Chubbies developed an ambassador program that allows them to interact daily in a private Facebook group. Some of these customers have bought a few products, others have closet’s full, but they are all engaged in discussion, both with the company and the community at large. Knowing these customers on a personal level affects the company culture. Oftentimes, the easy business decision is to do something financially beneficial, but the company has people who aren’t afraid to stand up and ask “Is this good for the customer?” because they have an emotional, as well as financial, stake in their better interests.
There are a lot of historic tactics that still work for Chubbies, like surprise and delight messages showing up in the inbox, but if you look at more than spend, like engagement with email and social, they have been able to develop some really innovative strategies.
Take feedback from customers and distributing it to your team? Tear down the wall and create a fluid and constant conversation. Meet them on their grounds. Email them as a friend. Start a private Facebook group. Learn about their lives, not just their experiences with your product. Simply being transparent can be a loyalty tactic. That’s seems to be part of Chubbie’s philosophy.
There’s no wrong way to get to know your customer, but for REVOLVE it comes down to quantitative data. Like Thredup, who I’ll talk about later in this article, they have new products every day. That business model creates loyal customers who shop, engage and/or visit with them every single day, and those frequent interactions surely provide a lot of insight into their shopping behaviors.
That constant contact causes a respect for the customer to permeate their entire organization. As Raissa Gerona, Chief Brand Officer, puts it, everybody knows that their customer is the boss. It’s a responsibility from the CEO to customer service. To make that possible, she recommends sticking with a single customer group. As the moderator put it “loyalty is about making a connection with a shared art of values.” The more customer groups you target, the fewer common values you can share.
Cotopaxi also believes in shared values as a core part of creating loyalty. Quit strategically, their employees are the of the same make-up as their customers. Founder and CEO Davis Smith says culture can develop by default or by design. While he was living in Brazil, he brought five people together to meet in Salt Lake City. They stayed in a cabin and talked about their shared, core values and how to instill those values in a company.
It goes well beyond products. Salt Lake City, home of their headquarters, has thousands of refugees. Cotopaxi developed a program that allows those refugees to get their first job and learn valuable life skills. Every package that goes out contains a thank you card from one of these special employees. If you’re at home wondering the value of such an investment, consider that Cotopaxi gets hundreds of talented applicants per job listing. Often times, a company can grow too fast and every manager develops their own culture, but exceptional people want to work there, and they share values that make keep the culture consistent.
When he explained the refugee program to the room, many members of the audience stood up to give a round of applause, presumably because they felt a strong connection in that moment. And it all had nothing to do with the product.
Cotopaxi uses technology to customers, but they also collect Net Promoter Scores scores to monitor how they’re customers feel. Chubbies does the same, even going as far as sharing those scores with the entire company through Slack channels.
When asked how he monitored loyalty, Smith said he used a simple one-to-five score based on recency, frequency, and monetary spend, and focuses on improving threes and fours.
Mobile Marketing & Engagement
Micheal Haswell, Director of Product Partnerships at Google provided a lot of insights, but I want to focus on his take on voice technology, like Google Home, which aims to eliminate friction. As Haswell put it, we’ve been adapting to computers, but with an AI-first environment, computers will adapt to you. Digital allows you to buy but not to shop. With voice, shopping is talking.
Today, people tend to use voice to make a list, create a reminder, or perform a search. Haswell gave an example of voice going beyond that functionality. A colleague was hosting a large family thanksgiving celebration complete with all the fixings and headaches. On Thursday morning, he turned to Google Home and asked: “What’s my day look like?” The response? “Traffic is bad and your aunt’s flight is arriving earlier. Leave RIGHT now.”
When asked where he wants it to be, he talked about his daughter, and the world he sees for her. “I want my daughter to ask Google a question and it answers like her best friend.” She might ask: “I’ve got a dance on Friday but what should I wear?” The desired response? “You look great in blue and in an a-line dress. I’ve loaded some ideas on your phone for you to review. Check it out.” In summary, future improvements to voice through AI could provide truly frictionless shopping experiences.
Sid Jatia, VP of Omnichannel Digital at Under Armour, explained the company’s commitment to mobile engagement through apps like My Fitness Pal. In his opinion, retailers need to move from mobile-first to a mobile-only policy. It takes confidence, but doing so has had positive results for the fitness brand. Last year, Under Armour sold a shoe on mobile devices only sponsored by Stephen Curry. They worked with partners to drive word of mouth.
Under Armor is a global brand with eyes on the Indian market. This growth provides an opportunity to initiate a relationship with someone who has no awareness or preconceived notions with an awesome mobile experience. Their introduction to the brand will not necessarily be as a product on a shelf of many but as part of an experience. Fitness tracking data allows under armor to connect to their customers over the reasons they buy, wear, and share these products in the first place. That said, privacy has been a bigger business challenge than the technology. Using data in only relevant ways and carefully monitoring the line in the sand has appeased the Under Armour customer’s desire for balance between privacy and personalization. Fingers-crossed that foreign markets, and their differing cultural values concerning privacy, don’t affect that winning streak.
ThredUP is the world’s largest online thrift store with over a million online SKUs. The company sends a bag with a prepaid shipping label, people send in their clothes, and then thredUP creates the pages, including taking product photography.
According to Anthony Marino, CMO of thredUP, a loyal customer might spend forty-five minutes a day perusing thredUP on a mobile device. He compares the experience to watching a television show when you get home. Google’s Haswell brought up a good point: freshness with new products provides a dopamine drip that shouldn’t be ignored. A business model that is built around new SKUs (somewhat like REVOLVE) may need to invest less in experiential retail and the gamification strategies than peers like Under Armour.
Retail Experiences of the Future
Track Keynote: Reimagining Retail Destinations
Zach Overton is GM of 837 and the VP of Experiential Marketing at Samsung Electronics America. Before that he was COO for (RED), a charity started by Bono and spent time as GM at Gilt Groupe.
837 is Samsung’s flagship store in New York’s Meatpacking District, and it’s been touted as one of the best flagships in the world by INC Magazine in 2016. However, it’s not a fancy retail location; it’s a technology playground with three floors that really embraces the “interactions over transactions” philosophy. It reminded me of something I heard in another session from Tristan Walker, Founder & CEO of Walker & Company Brands. He asked a friend of his why apple retail worked? The response? “We optimized the experience for the 99 of people who don’t buy.”
837 has removed retail from the equation and focused on driving people to interact with the staff, the product, and the brand. To do that, they’ve stopped talking product specs and started creating experiences that create awareness. They put sales metrics aside and focus on metrics like “three out of four people who visit the flagship document their experiences on social media.”
Perhaps more important than technology are the strategic partnerships that make this all possible. Instead of fearing the dilution of control, they adopted a “1 + 1 = 3” philosophy: the idea that partners can do things together that they couldn’t do alone. For one partnership, they invited Lululemon athletic coaches to teach a class where people can try out a fitness wearable.
Partnerships give you credibility in a different space. To illustrate his point, Overton brought up the Casper and West Elm partnership, which brought the mattress company’s products into retail stores for the first time with great success.
837 has found out the hard way that forced partnerships don’t work. Without a reason for brands to connect, the experiences create awkward moments. A partnership with Netflix’s “Stranger things” pushed visitors to watch the show on tablets and headphones instead of a large screen. The lesson? One-sided partnerships don’t work for anyone. Make sure the product integration elevates the experience. And make sure that your retail destinations allows customers to draw their own conclusions.
So much I didn’t say
I’d like to keep a few interesting ideas up my sleeve should we meet. If you’re dying for more, like quotes from Keds or stats from Rent The Runway, you’ll just have to reach out to me.