*Overview: Loyalty is at the core of most retail businesses. It costs less to efficiently engage existing clients - especially top spenders - than it does to acquire them. Personal relationships with store employees remain a key asset for brands to power long-term and profitable loyalty with customers.*

Department stores are ideally positioned to drive loyalty with shoppers

While loyalty can be driven by engaging point systems and gamification strategies, the personal touch and empathy that well-trained and incentivized store employees can garner is hard to compete with. We all know of countless stories of satisfied customers who will make the extra step to return to a particular sales associate and location to buy new products.

Human connections drive a lot of a brand's recurring business because when it comes to decision making, a personal point of view is often worth gold. As technology-advanced as our societies may be, we still depend very much on the herd mentality. Aspiration and personal recommendation by individuals still drive a vast amount of business today.

Department stores are particularly well positioned to tap into that opportunity for 3 primary reasons:

1. Diversity of choice: department stores cover a far wider and deeper inventory than D2C brands do. Diversity of choice - no only in the product itself but also in terms of verticals and product category positively impacts conversion. The ability for department store employees to tap into that is key to create a wider range of personal recommendations for each customer. Unless a client is looking for a very specific item, an experienced associate usually makes the difference with their ability to cover a much wider range of product options and identify the right match for their customer.
2. Empathy: well-trained store employees are masters at listening to their customers. Catching all the personal details that make a person unique, not only allows the employee to more often convert a prospect into a sale but it also allows them to leverage those insights to drive loyalty. Loyalty is not driven only by personal incentives. The discounts / offers associated to a loyalty program are irrelevant if the customer doesn't know what they want to buy within a points redemption time frame. Department store associates play a crucial role in that process when they are able to access and leverage customer data to help shoppers learn about relevant products and make buying decisions.
3. Clarity: everyone of us has dealt with decision fatigue. The amount of options and variations in products out there is staggering and more often than not, a sale will not convert because the client is lost in a "decision loop". This is particularly true when it comes to high-ticket items or more generally in Fashion, Beauty and Personal Care. More than any other sales associate, Department store employees must bring the level of clarity needed to her customer to make the final decision.

Relational Shopping is the foundation of long-term engagement

Today's standard loyalty programs are ideally designed for self-service: a customer is incentivized to accumulate value and track their progress through a set of milestones that they are invited to reach. They can do all this on their own and often redeem their offers either in-store and online.

What these programs are often not doing is build a personal relationship with the customer. That is fine when they are applied to high-volume and relatively low-cost consumer goods (e.g. Starbucks' iconic "Stars" loyalty system) but it's a problem when the product sold is not subject to discounts / offers and when the purchase is high enough of an investment. In that case, the best "loyalty program" left for a brand is the relationship that can be created and nurtured between a client and department store employee.

Relational Shopping is a term that was coined by our company, Clientela Inc. It's a methodology and set of tools that are put in place by a retailer to look at online and in-store shopping beyond their purely transactional nature and leverage instead the personal relationship between store employees and customers as a key lever to drive business: converting a prospect online, driving an existing client to come back in-store, upselling loyal customers… Unless a client knows exactly which product they are looking for and that is precisely all they want from the interaction with the Department Store, the ability of store associates to nurture client relationships across channels (online, in-store, remote shopping via video, chat, etc.) and the tools made available to them become fundamental.

Coherence and user experience are key drivers for technology adoption

As Apple has been proving over and over, the ability to have a "vertical" offering covering software, hardware, supply chain and even the rails of innovation (the App Store) is a winning formula for digital innovation. By controlling the entire experience from start to finish, the brand has been able to build a "hook" with their customers. The experience is the same whether you are in Tokyo, Paris or in the middle of nowhere in Montana.

In contrast, many retailers and brands have been "plugging together" highly disparate solutions. The result is that each solution has addressed a particular issue but the lack of coherence between them and ability to seamlessly switch from one to the other has created new challenges for employees and managers.

Adding solutions to a tech stack is relatively easy, but the focus on integrating all of them into one tool - typically living on a mobile device - in order to create a coherent user experience is typically what makes or breaks a digital strategy. That is why Department Stores should fully commit to building a comprehensive experience not only for their customers but their employees as well.

In Sum

The Department Stores' nature as aggregators of products, services and experiences, combined with a comprehensive vision for digital innovation and the working tools used by a well-trained workforce places them in a clear position of strength to success. However, their ability to build a long-term strategy around loyalty and Relational Shopping solutions which place sales associates at the center of the conversation make for a magic formula in retail, one that only they are able to achieve, with the right approach.

Arnaud Barbelet – COO / Clientela - abarbelet@clientela.com

*Clientela is a RetailTech company based in New York and Paris.

For more than 10 years, Clientela has defined and developed applications dedicated to improving the performance of salespeople and employees of major brands, distributors and department stores.

Main services are Clienteling, Drive-to-Store and boutique's resource management.

www.clientela.com*

Learn more about Clientela here