“Loyalty in retail is the absence of something better,” Walmart U.S. President and CEO and NRF Board Chairman John Furner said during opening remarks at Retail’s Big Show earlier this year. He underscored that shoppers are always looking for an improved customer experience. “When they find it, they’re gone.”
But clever use of the right data can help you deliver that improved customer experience – so your customers don’t find it elsewhere, according to David Witts, senior CRM manager for PUMA. And the global apparel company has enjoyed great success with referral data.
“That adds a whole new level to who is not just buying – but who is referring – and who are our real brand advocates,” Witts told SAP on the NRF 2023 show floor. “We need to rethink how we define loyalty.”
Redefining Customer Loyalty
“We might have a customer who, in our original segmentation, is a lapsed customer, but we see that they’re referring all of their friends who are then buying from us,” Witts said in an SAP video. “That changes the way we perceive the value of that customer – and changes the way that we want to communicate with them.”
Customer segmentation is the grouping together of people with similar characteristics, making it easier for organizations to personalize communications, products, and more. First-party referral data is especially useful to PUMA for segmentation and communication, according to Witts.
“It changes the way we think about who a customer is,” Witts said. “If we see customers who are referring people regularly, that makes them much more of a brand advocate.”
Enter PUMA’s referral program, which influences how the company communicates and rewards brand advocates, according to Witts. The referral program was inspired by two company goals: increase customer lifetime value and cultivate relationships with customers.
“Adding a referral program just seemed to fit with both of those goals,” Witts said. “If we see that they’re not showing any interest in buying from us but they’re still referring their friends, that changes the way we think about them, so that they’re much more valuable to us.”
Creating Opportunities
Beyond e-commerce, the right data can offer insights that reinvigorate brick-and-mortar locations, too, as Macy’s Inc. Chairman and CEO Jeff Gennette noted. Data can reveal where you’re succeeding and what needs attention.
“Customers are looking for ideas about the way that they can take a work look and translate it into a night look. They’re looking for opportunities,” Gannette said during his NRF 2023 keynote session. “Creating opportunities for them, from a merchandising perspective, has given our stores a center of gravity that they didn’t have a year ago…We’re always working on it; we’re never done.”
And pandemic-driven changes in the economy offered a chance for Saks OFF 5th “to make bold new changes” and adjust its thinking, according to President and CEO Paige Thomas. The department store chain dug into its data to discover who was engaging with the brand, what they were looking for, and more about their lifestyles – all to better understand relevant demographics.
“We had this kind of wonderful discovery of a really fast-growing segment within our customer base, and this segment was a high earner, very fashion-driven, and shopped everywhere,” Thomas said during her own NRF 2023 keynote session. “It really gave us a bull’s-eye as an organization to say, ‘How do we think about our merchandising strategy? How do we think about our marketing strategy? How do we think about our customer experience?’”
The Right Message at the Right Time
Data, analytics, and other tech are helping PUMA discover who is interested in buying and what they’re interested in buying, according to Witts. It also helps them hyper-personalize communication.
“We want to talk to the right customer with the right message at the right time through the right channel…That’s what we can do with SAP Emarsys Customer Engagement,” Witts said, noting that PUMA can see which e-mails a customer opens, ignores, and clicks through. “Through all that, we can start to build that picture of each individual customer and then tailor our communications to send them things that they want to see.”
Providing a differentiated customer experience has always been vital for PUMA, according to Witts. And making everything more personalized and relevant will be crucial to PUMA’s future success.
“There’s some really exciting things that we’ve seen through SAP Emarsys Customer Engagement and through SAP at that predictive analytics [and] AI level. I think it’s just going to make it all so much easier,” Witts said. “And as we move into more of a loyalty space, that’s absolutely going to be key for us.”
Derek Klobucher is a video producer at SAP.