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Brands and retailers are trying to find ways to connect with their customers, both online and in stores. Consumers want convenience and begin the buying process with more information than ever before, leaving the retailers attempting to catch up to them in their efforts to improve online customer experience.
By combining in-store experiences with better online customer experience, some retailers, such as Lucky Brand Jeans, are staying ahead of their customers, meeting them in the channels they want to shop in with the technology to make that easier.
It's not always simple. Modern marketing concepts, such as 360-degree customer view, mobile optimization and easy checkout, are hard to put into action and require more software and reimagining how a retailer should operate.
At the National Retail Federation 2019 conference in New York, Michael Relich, COO of Salesforce customer Lucky Brand Jeans, discussed this changing retail landscape, how to improve the online customer experience and how to get cost-conscious consumers to buy high-end denim.
How is Lucky Brand trying to enhance the online customer experience to help with physical retail?
Michael Relich: We have to learn how to measure it effectively. When looking at our sales, customers that buy in both channels are our most profitable, and when you look at the customer lifetime value, the top 10% of customers account for two-thirds of value. The theory is that stores don't make money and traffic is down, but we look at a store and see what the e-commerce sales around that store are and use that as proxy. We know that, when we close a store, our e-commerce sales go down, so having stores helps customers and removes the friction.
To help blend online and in-store retail, we have buy online and ship to store, and we have a concept called e-stock room. Customers can come in, and if we don't have something in stock, an employee can pick up an iPad and can create a transaction and ship it to your house.
A trend is physical stores bringing in more technology and software to help capture customer data in the store that may be lost. How important is it to retrieve the in-store data and personalize the customer experience?
Michael RelichCOO, Lucky Brand Jeans
Relich: We launched a loyalty program this year, and we capture about 60% of transactions in the store that can be attributed to an individual. Online, you already have that transactional data. We're able to take that myriad of data and bring it together for a single view of the customer. Then, we try to augment that with other data, like email opens, abandoned carts, etc.
If you're in our loyalty program, you want to know about deals, and you want us to know about past transactions. So, we can take that data and personalize it in a number of ways. On the map for this year, we want to personalize the experience for you when you come to our website, and we want to personalize the emails to you for that improved online customer experience.
How is Lucky Brand improving the experience for the online shopper?
Relich: It's a huge opportunity for us. People that shop in both channels are our most loyal customers. We've seen tremendous increase in traffic to our website. In 2017, we started a customer centricity initiative. We started with 1.5 million names, and now, we're up to 5.8 million.
It's helped us get clean data and figure out who the customer is. The majority of customers research online before shopping, and we think the online customer experience matters a lot. We've noticed that, when traffic increases online, it also increases in-store. You look at Amazon and other online retailers opening stores now, so we know both channels are important.
One beauty of working with Salesforce: You let them deal with the heavy lifting. We went to Salesforce and did a review of our UI. You can look at web analytics, drop-off rates, how often search is used, and they did a study with us and gave us some good recommendations.
You need the online customer experience to be clean and easy for customers. How is Lucky Brand looking at its website, and where does the company stand on its desktop and mobile sites and how they work for customers?
Relich: We've seen a huge shift from desktop to mobile. Our mobile conversion was much lower than we wanted. We've done some things that worked well. We implemented Apple Pay and saw probably a 30% increase in conversion with Apple Pay. Putting in your credit card is a pain. With mobile, you're worried about network connection and speed, so we wanted to make our site more lightweight. We were also conscious of how much we could show on a phone screen and should we compress things to get as many items on the screen. We're working on that now.
We're changing our philosophy to be more mobile-first. We know the world is going mobile, and we can do some optimization. One reason why you have slightly lower conversion on mobile is: When I'm on my desktop and shop, it's purpose-driven. But when I'm sitting here killing time clicking on ads, I call them micromoments. If it's quick enough, maybe that can turn into a transaction. But we need to optimize for those micromoments.
How are you able to attract clientele who may not be in the market for high-end denim?
Relich: We are actively discussing that right now. We have an outlet store, and that product probably fits that demographic. We have markdowns, too, but I don't want to train our customers to buy markdown products -- it's not sustainable.
Right now, it goes back to personalization. When we segment the data, we get a segment on price sensitivity. If you're price-sensitive, I should be able to personalize the ad to you and show you things that are more price-conscious.
It's still under discussion, but maybe we create a second website that's an outlet or clearance website and link them together with a common shopping cart. One segment focuses on cost, and the other focuses on our brand and our stories and about fashion, and that's full price. We might lose some customers to the cheaper site, but I'll be serving both those segments.