Digital strategist Felix Velarde gets internet-shy retailers online.
Today’s question: we’ve arrived in the digital age, everyone’s online, Blue Nile’s cleaning up on diamonds, and the whole world seems to have gone social media mad – so, should we jump on the bandwagon too?
For the small family jeweller, or even the large high street family jewellery chain, it’s a question that has taxed business owners and marketers with increasing frequency over the past few years. Indeed, now that the smart phone accounts for nearly as much online traffic as PCs, and the website is almost every retail chain’s largest single store, it’s a question that has gone from being shelved as a “to do” to one that may well be business-critical imminently.
So what are the basic decisions that need to be made, how do you decide what to do, and how should you prioritise? The first is simple: the decision should be based on a simple set of questions, focused on threat versus opportunity. Can you compete without going online? Can you gain any benefits from going online? And to answer this, the process is relatively straightforward. You need to ask yourself how you currently relate to your customers.
For example, are the majority of your customers one-off purchasers? If so, are they really? In other words, do they buy on several one-off occasions such as weddings, birthdays, Christenings, Bar Mitzvahs, anniversaries? And if so, is there something you can do to keep a relationship going? Of course, retailers already do a lot of good things, from offering a great in-store experience, knowledgeable and engaging staff and interesting product ranges, but how do you follow this up and keep in touch? Digital channels may provide one answer of course, as emails – today’s postcard – cost pennies to generate and send, even in relative bulk.
If you have a few hundred customers it’s fine to do this by hand, because you can do this instantly and more or less from memory, but again digital’s power here is the ability to divide customers up into groups, for example husbands, over-50s, partner’s birthday in October, anniversary in May, and automatically send the right message to the right person at the right time. Simple segmentation like this can mean compelling messages, as opposed to the one-size-fits-all approach most retailers seem to take. In fact, an approach like this uses the power of digital to recreate the personal service-based relationships of old.
For this kind of approach of course you need data. The big retailers have this down pat and collect data at point of sale such as age, marital status, reason for visit, products looked at and bought, birthday and so on, and add it to a centralised database, which could be as simple as an Excel spreadsheet or as big as a Single Customer View database integrated with your EPoS system. You can augment this data at the till, or by leveraging your website. To do this you might consider asking customers to visit the site and they’ll get some value exchange, perhaps free engraving next time they buy, or a free trinket for their daughter, or the chance to win something. This kind of simple value exchange gives you an opportunity to learn both about the individual and about your customers in general. This in turn gives you data from which you can start to make decisions and in turn, the data with which you create can be targeted, timely and relevant to drive sales and support your ongoing – if infrequently manifested – customer relationships.
One benefit of a relationship supported and bridged online is that you can use it to ask questions about your strategy. For instance, if you’re trying to work out if your customers might buy if you built an e-commerce site, ask them. You may be surprised, they may tell you things you never knew: “We browse in your shop because it’s friendly but we buy from your competitors online because it gets delivered to the recipient gift wrapped” or even “My family used to come to the shop but we moved away and only get there once a year, we might buy more often if we could do it from home.” But of course you do have to ask in the right way. Most people like to be asked their opinion though, as the implication that you value their opinion confers a sense of belonging and ownership. Your website is the perfect venue for this, especially as a simple survey to find out their preference can be very cheap to produce and promote.
The benefits may not immediately justify spending thousands (or even hundreds of thousands) on a serious e-commerce strategy, but by creating relationships with your customers, by using cheap and easy channels like email to help bridge the long gaps between visits to your shops, you can easily develop and cement loyalty at a very low cost.
By the time you have hundreds of thousands of customers, and you start changing the purchase patterns – say frequency, or order value – of swathes of them by a few percent, you could be talking millions in incremental revenue. Even for the independent family jewellers, the difference between a declining, ageing customer base visiting spontaneously and a loyal, engaged customer base who increasingly use the internet to keep in touch, make decisions and use the web to book appointments to view and choose wedding rings, may even be the difference between fading away and reinvigorated growth.
Felix Velarde is managing director of digital customer engagement agency Underwired.com, whose clients include British multiple jeweller F. Hinds, M&S and BrandAlley.