1. OCTOBER 2015 • www.apparelmag.com22
Today’s shoppers are no longer bound
by channels, and executives must keep this in mind when build-
ing new loyalty programs. To bridge the gap, loyalty 2.0 must
emphasize both the in-store and online shopping experience. In
building these next-generation loyalty programs, retailers must
remember:
• Experience is everything: Savvy retailers know that creating a
seamless customer experience — both in-store and online —
encourages shoppers to both frequent and spend more at an
establishment. This, in turn, drives loyalty. REI’s membership
program is a leading example. By bridging the online and in-
store experience (75 percent of REI customers who buy some-
thing in-store browsed that product’s category online within the
previous seven days), the brand has built a reputation as a trusted
partner for both the occasional camper and avid outdoorsman,
resulting in 5.5 million active members.
• Loyalty is a two-way street: Coupons and points aren’t enough
to make a customer fall in love with a brand. Rather, innova-
tive retailers will use other inducements to add value for cus-
tomers, ranging from free alterations to upgraded shipping, in
turn giving them a window into who their customers are, what
they like, how they shop and what truly matters to them, regard-
less of the channel used.
• Develop actionable insights: Although data provides insights
into customer habits, many retailers fail to fully leverage the data
available to them, causing them to miss out on a valuable oppor-
tunity to take action and implement reforms. The most innov-
ative retailers will share their data among various internal
departments, from supply chain to marketing.
With more than 23 million members in its program, Coca-
Cola offers a standout example of what an effective loyalty pro-
gram is all about. Originally launched in 2006, the brand rolled
out its updated My Coke Rewards program in early 2015 with a
new focus on “content-based programming driven by commu-
nity and social interactions.” Organized around member passions
— including sports, music and travel — the program is compat-
ible with mobile devices and users gain status by sharing content
across social media platforms (but still incorporates some of the
tried-and-true elements of its original program). As user status
E
stablishing a loyalty program has
long been recognized as a must-do
for retailers. And with more than
three billion U.S. loyalty program mem-
berships, there is no shortage of consumer
appetite.
Many cutting-edge retailers are already
on board the loyalty boat — retailers account
for 39 percent of total loyalty memberships
held by consumers. These retailers have
been able to attract participants by using a
variety of tactics, including coupons, points
and club memberships.
But despite the abundance of programs
available, retailers that were once at the
forefront of loyalty innovation are begin-
ning to recognize that their programs need
an overhaul to keep them relevant in a
changing retail landscape.
Balancing the digital with
the physical
From Passive to Active:
Building and Engaging a
Loyal Customer Base
Many loyalty programs need an overhaul to keep
them relevant in a changing retail landscape.
retailintelligence TREND REPORT

2. Apparel: Today’s anywhere and always-on shopping
environment offers more nodes of connection than ever
before to build connection with shoppers — as well as more
opportunities to let them down. Which consumer touchpoints
present the greatest stumbling blocks to creating a positive
experience, and how are leading retailers honing in on these
problem spots to turn them into loyalty-building instead of
loyalty-losing propositions?
MINNIX: As consumers continuously generate real-time data
through social channels, the instantaneous and public nature of social
data gives businesses an opportunity to create equally fast-moving
strategies to exceed customer expectations.
The digital universe will grow, as will the ability to interpret what
today is seemingly uninterpretable. In doing so, social analytics —
monitoring and interpreting customer sentiment and activity — has
become a powerful tool, not just for building stronger relationships
with customers, but also as a compelling way of deciphering data to
predict future trends. As consumers increasingly rely on social
media, data collected will feed into powerful algorithmic tools that,
over time, will monitor and learn consumers’ response to defined
situations and offers.
These insights enable retailers to develop a more comprehensive
view of a customer and meet perpetually shifting consumer demands
more effectively. Preferences around a particular product can be
easily matched to social data to answer questions like “What do
females in the 20-30 age group think of product x?” and “How did
the response change after the launch of our new video campaign?”
Given that this data is public, fashion retailers are now in a better
position to segment consumer types, which in turn can be leveraged to
customize store layouts and assortments for specific regions. Similarly,
manufacturers can harness open data in the form of social media
chatter or “likes” to improve after-sale interactions with consumers
and make informed product design and development decisions.
Apparel:Studies show that loyal customers are the best
customers. They not only spend more, but they share their
passion, which engenders more loyal customers. Whether it’s
via gamification, building a mobile loyalty app or being able
to identify your customers via their smartphones when they
enter your store, pinpointing the strategies that are best for
generating excitement around your own particular brand isn’t
always easy. Is there a typical best path in finding the low-
hanging fruit when it comes to building a more engaged
customer base today?
MINNIX: Today’s empowered fashion consumer is driving the retail
agenda. With shopping now a 24/7 experience, their loyalty is
waning, while expectations are constantly on the rise. Brick-and-
mortar retailers once dominated the retail landscape, but today their
failure to meet these new consumer expectations is one of the main
reasons contributing to the decline in brand loyalty. On the other
hand, the rise in social and mobile technologies has led to the
success of innovative stores, who have redefined brand-customer
interaction.
The all-knowing customers today have
the ability to research and compare product
prices, and read reviews before making a
purchase decision. They have the option to make their purchases
from retailers across the globe, without ever setting foot in a store.
Once the purchasing decision is made, they can share their shopping
experiences — positive or negative — with friends, family and even
strangers via social media. Most importantly, these technologies have
allowed consumers to define how they want to be engaged — but, is
the retailer listening?
An effective engagement strategy based on consumer insight will
bring brands closer to customers, regardless of the channel, by
gathering data across touchpoints to generate a positive experience
for the omni-present customer. Fashion retailers now understand the
need to adopt this type of strategy as part of their brand-building
strategy, as it helps to empower sales associates to create engaging
customer experiences. However, it is not limited to in-store interaction
alone; instead it serves as a tool for consistent interaction and
communication across all geographies and sales channels.
Apparel: Building loyalty is really about combining the best
of both worlds — an easy, seamless shopping experience
across channels, with a message that engages them and
keeps them coming back. As the amount of data retailers and
brands collect about consumers continues to pile up, what
new opportunities will present for apparel businesses to grow
both sides of this equation?
MINNIX: Building loyalty needs to start with the implementation of
a customer-centric foundation with the ability to enable and support
proven best practices for in-store consumer engagement, multi-
channel campaign management and analytics specifically focused on
providing fashion retailers with a shared view of the customer. This
shared view of the customer must include all customer touchpoints
including the customer’s profile, preferences, purchase history and
social media feed along with POS, inventory and product data across
all channels.
A single view of the customer represents an evolution in the way
businesses approach customer engagement. This consolidation of
critical data about customers becomes a competitive differentiator as
incomplete and inaccurate customer information costs retailers in lost
opportunities.
Most large organizations spend significant time building CRM
systems, but only a few achieve the elusive “single customer view.”
Attaining it, however, helps retailers analyze and monitor individual
customers at a granular level, rather than in discrete channel views.
When this information is held in a cross-channel CRM or data hub,
this single view can be utilized to develop powerful one-to-one
programs and highly personalized one-to-one interactions that
provide individual value to customers. This results in increased
customer lifecycle value, satisfaction and loyalty.
Vendor Viewpoint is a regular Apparel advertorial feature.
VENDOR VIEWPOINT
Brian Minnix, Regional Director, North America, attune Consulting
www.apparelmag.com • OCTOBER 2015 23

3. increases, members can unlock exclusive
deals, donate to charity or enter one-of-
a-kind sweepstakes.
The best is yet to come
As brands such as REI and Coca-Cola
look to the future, they must ensure that
loyalty initiatives are aligned with the
way consumers shop.
Mobile continues to be a driving influ-
ence in building loyalty. According to Kurt
Salmon’s recent mobile payment study,
almost 70 percent of respondents noted
that they use their smartphone for shop-
ping on the Internet. Sixty-five percent also
noted that they use their smartphone to
research items and products while in-store.
With technology advancements rapidly
rolling out, shopping-related mobile usage
is only expected to grow. Retailers cannot
underestimate the impact mobile will have
on the customer experience over the com-
ing years, and those who develop a com-
patible loyalty strategy will gain a competitive
advantage.
To be sure, there will be bumps along
the road, especially related to how retail-
ers analyze and leverage the influx of new
data. The retailers best poised for success
will be those who are able to capture data
across channels, synthesize it and use it
to influence how they target customers
across the consumer journey — from pre-
purchase promotions to post-purchase
rewards.
To effectively integrate loyalty across the
customer experience, companies need to:
• Make loyalty programs accessible to
shoppers anywhere, at any time and in
any way
• Recognize all types of loyalty behavior
ranging from traditional points programs
to sharing content on social media
• Share data across the company to differ-
entiate and personalize customer inter-
action at every touchpoint.
A truly integrated loyalty strategy will
induce meaningful customer action. Those
who are subsequently able to develop
metrics that quantify these actions will be
able to transform loyalty into sales. And
with more than three billion U.S. loyalty
program memberships, brands that are
successfully able to capitalize on their loy-
alty program face a world of financial
opportunity.
Michele Orndorff is a retail expert at Kurt
Salmon, a global management consultancy.
retailintelligence
OCTOBER 2015 • www.apparelmag.com24