Tom Lemke is the CEO of BBG-Global with more than 30 years of retail marketing experience, having served as the CMO for several multi-billion retailers. A pioneer in leveraging data to drive customer communications, Tom has extensive experience in customer centric marketing, development of loyalty programs, usage customer data, analytics and modeling to improve business performance.

In this first half of our two-part series, we reached out to get his perspective and insight on the direct mail industry and how it relates to the retail space.

Two of the buzzwords for the retail industry in 2018 are “retail renaissance.” Renaissance can be defined as a “rebirth” or “reawakening.” And retail is certainly an industry that has had an awakening over the past few years. Technology has and will continue to impact the industry in dramatic ways.

Whether it’s social media, digital display ads, 3-D printers to make products or “smart” mirrors that let customers “change” outfits just by using the mirror; these “shiny new” technologies are changing the fabric of retailing and how customers interact. But, renaissance implies a rebirth of the old.

“Old” is “New” Again

Today “old school” technologies can also be part of the retail renaissance. Think about the music industry. While technology has given us live streaming of music, old vinyl albums have seen a resurgence. In the UK, vinyl outsold CDs over the holidays. While many major music chains have gone out of business, we’re seeing new “vinyl-only” record stores opening in the UK, and two major grocery retailers, Sainsbury and Tesco, are now also stocking vinyl.

Think about how many other “old” things are becoming “new” again. High top sneakers, suits with vests, fedoras, even cocktails like the Manhattan, Tom Collins and Gin Rickey have had a rebirth. Consumers enjoy changing trends and spend their money accordingly. Retailers must be diligent about changes and the impact on their specific business.

Some Things Remain the Same

However, some things always stay the same. For example, putting customers first. Sounds simple, but it is difficult to accomplish. Of course, everyone understands that the customer is most important, but is that philosophy driven through the retail organization? The famous statement by Stew Leonard, an East Coast grocery retailer, perhaps said it best with his two rules about customers: “Rule # 1: The customer is always right. Rule # 2: If the customer is wrong, refer to Rule # 1.” Every employee and customer clearly understood his message and he clearly drove it through his organization and built a very loyal customer base as a result.

When thinking about how the “customer first” philosophy can be driven through the retail organization, we must consider that customers have two relationships with retailers. One is “transactional”—how much they spend, when they spend and what they spend it on. The other is “emotional”—how they feel about their relationship with the retailer. Customers always want to feel important, understood and special. We often hear the stories about “back in the day” when the retailer knew each person that came into his store. He understood what they liked and wanted—and would cater to their personal needs. So he met both their transactional and emotional requirements, and customers remained loyal as a result.

The Survey Says

Let’s look at the importance of the customer’s transactional and emotional relationships today. A recent survey of customers in channels like grocery, mass, department store, specialty and big box stores provides some interesting results. The objective of the 35 question survey was to find out what variables in the shopping experience were most important to customers. The list of variables included typical transactional details like pricing, selection, on-trend merchandise, quality and brands. The emotional variables included things like good lighting, wide aisles, clean restrooms, customer service and “feeling thanked and appreciated.”

The number one most important variable was “feeling thanked and appreciated.” An emotional variable and one so powerful that customers said they would change retailers if they left the store not feeling thanked and appreciated. Even price, although very important, did not outweigh “feeling thanked and appreciated.” Just think about your own personal experience when the check-out person is snarly and offends you. Do you return to that retailer? Customers have many more retailer options today than they did years ago. So, putting the customer first is not a renaissance, it has always been—and always will be—most important to successful retailing.

 

Tom Lemke
CEO, BBG-Global

 

Header photo by Citymalljo [source: http://commons.wikimedia.org/wiki/File:Inside_view_of_City_Mall.jpg]