metrics

KPI’s Retailers Need To Track: Part II: Retention, Talent & Marketing

In our last article, we talked about a bunch of KPIs (Key Performance Indicators) you can measure to help keep track of your retail goals, including overhead costs, online and in-store sales. These are all really great ways to measure your success. However, reducing costs and increasing sales may not be your only or immediate goals. There may be other metrics that you want to watch like: attracting and retaining talent, customer retention, even brand awareness. So, then how do you track these?

In this article, we explore what KPIs you can use to evaluate your customer retention, talent attraction, and local marketing tactics.

The Measurement Process

Like we mentioned in KPI’s Part I, measuring your KPI performance this way is a handy skill that helps you create conclusions based on the differences in your trends over time. It’s a vital skill for any retailer, and it’s easy to do with just a bit of experimentation!

First, you’ll need a control group: the reports on your sales, costs, or whichever figure you’re monitoring from 12 months ago. Next, make your business the test group by implementing one of these nifty KPI metrics for a while. Compare those figures from your current period to those from 12 months ago to see the results of your metric!

KPIs for Customer Retention

Cart Abandonment Rate:

Driving sales in e-commerce can be difficult when so many virtual shopping carts never make it to the checkout screen. While it may seem like counting a loss, measuring cart abandonment rate has a thick silver lining: it helps you keep track of potential customers that are already interested in your product:

Cart Abandonment Rate = 1 – (Total # of Completed Purchases / # of Carts Created)

Of course, you don’t need to do the math yourself. Marketing softwares such as those offered by BigCommerce can track your cart abandonment rate and respond by initiating email campaigns that convince customers to complete their shopping journey.

Customer Lifetime Value

Customer lifetime value is the projected revenue that a customer will generate during their lifetime. It’s a great metric that both measures your business’ return on investment and helps you strategize upcoming goals. Determining the lifetime value of a customer is simply a matter of calculating all the sales your average customer has completed since their first purchase and then doing some number crunching:

Lifetime Value = Revenue x Gross Margin x Average # of Repeat Purchases

Don’t know how to measure the average number of repeat purchases? Just use order gap analysis to calculate the time between each of your customers’ consecutive purchases.

KPIs for Talent Attraction

Source of Hire

Job boards, store windows, employee referrals, flyers—it’s easy to spread out your recruitment ads to fish for applicants. But did you know that employees’ performance tend to correspond with their source of hire? Tracking your recruitment sources and comparing them to performance reviews will help you determine which forums send the best candidates to your hiring manager. You can easily measure the effectiveness of your sources by using an applicant tracking system like iCIMS.

Offer Acceptance Rates

It’s easy to reflect on how many of your job offers are accepted, but what about those that were rejected? Understanding why your offers aren’t accepted by candidates can drastically inform and improve your recruiting process, which alone makes it worth measuring:

Offer-to-Acceptance Ratio = Total # of Offers / # of Acceptances

Low offer acceptance rates are a telltale sign that your employment incentives need improvement. It could be that you’re not meeting your candidates’ expectations or cultural tastes, or that they’ve taken a better offer from one of your competitors. Minimize the risk of losing attracted talent before they’re even hired by analyzing candidate feedback and offering new incentives.

KPIs for Local Marketing

Ranking and Reviews in Local Search

When locals search for a product you sell, is it your business or your competitor’s at the top of Google’s results? What about on Yelp, Facebook, or Apple Maps? Your ranking in keyword searches for your area is a strong indicator of how accessible your store is and how far your brand awareness has spread. Low rankings can be improved through SEO optimization tactics, such as pining for positive reviews online. The more (high) ratings you have, the more likely it is for your business to be featured with a star rating within search results. Take a look at Google’s review guidelines to learn more about how it’s done.

Social Media

Social media interactions can be pivotal in establishing your popularity among both current and potential customers, in addition to their own local network. While using this KPI effectively requires you to actively monitor and encourage growth in followers, likes, and so on, it yields great rewards in terms of brand awareness and foot traffic. Both Facebook and Twitter also have built-in analytics that can track customer engagement and web traffic to your site by tracing your shared links. Why not encourage check-ins and use of hashtags so you can follow along with your customer’s engagement?

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Want more KPI tips and tricks? Check out our other article on easy-to-use metrics for overhead costs and both online and in-store sales!

sephora flickr2

6 Lessons We Can Learn from Sephora

[title image from Flickr]

Sephora is now the #1 specialty beauty retailer in the world, and it’s all due to how they’re different from your mom’s makeup buying experience. Sephora’s success shows that when you let customers create a shopping experience that works for them, it also works for you. Here’s how you can do the same:

1. Build the in-store experience they desire

http://gph.is/2cD1nBU
http://gph.is/2cD1nBU

When you walk into a back-lit, booming Sephora store, you feel more than welcomed, you feel empowered. Sephora’s approach to merchandising has contributed immensely to their success as they identified all the hurdles of purchasing makeup and promptly tossed them out the door.

Sephora knows that customers are exhausted by the grab-bag quality of pharmacy makeup aisles and the competitive product-pushing found in traditional department stores. The Sephora alternative offers a more accessible shopping experience that’s designed to be low-pressure. Retail assistants are taught to refrain from the hard sell that department stores rely on and instead work with each customer holistically to find the products that match them best while stepping back as needed. This gives Sephora customers the power to choose both their products and their service; they have the freedom to explore the store as they would a pharmacy without sacrificing department store-quality brands, tutorials, and assistance.

2. Offer a personalized approach

http://gph.is/2feVUAr
http://gph.is/2feVUAr

Customers are increasingly demanding customization as part of their shopping experience—especially if they’re shelling out for luxuries like makeup. Whether it’s primer for oily skin or moisturizer for dry, Sephora recognizes that their customers require a unique and personalized approach, and they offer this through in-store swatch samplings and makeup demonstrations that allow shoppers to test different brands to be sure they’re buying the right product at the right place.

But Sephora doesn’t stop there: their personalized shopping experience extends to the web, which has been a major key to their success in keeping customers loyal to their brand.

3. Reward loyalty

http://gph.is/2gm4Ffa
http://gph.is/2gm4Ffa

While baby boomers tend to be brand-loyal, the growing millennial market is more cost-conscious and would rather selectively pick and choose across brands so long as they fit their budget. So how do you get them to be loyal to your business? Give them the most bang for their buck: a loyalty program that rewards them and caters to their needs.

One of Sephora’s secret weapons is its VIB loyalty program, which grants members free gifts, in-store event offers, and discounts after their purchases. What makes VIB so dangerously effective is that it also requests that its members fill out their profile with information regarding their complexion, skin type, and other preferences. Sephora then analyzes this data to create a curated set of product recommendations that suit their specific needs.

The strategy is meant to digitalize the personalized, in-store shopping experience that customers have upon walking into their local brick-and-mortar.

“[We] figured out early on that if we were to get the basics right, we should ask the questions as if we were standing in the store,” Bridget Dolan, VP of Interactive Media at Sephora, shares with Forbes. “What skin type do you have? …If she tells us that she has dry skin then the product that she’s going to receive in an email will have that attribute.”

Evidently, all that tailoring works—Dolan says that a whopping 80 percent of Sephora’s transactions now run through VIB and that clearly, “It’s a win-win.” [Source]

4. Think mobile and digital first

http://gph.is/1EG0D3R 
http://gph.is/1EG0D3R

Much of Sephora’s success is due its digital customer experience, which is interactive, multipurpose, and totally on-point. Nearly half of Sephora’s digital traffic is through its mobile interface [source], which features almost all the accoutrements of its desktop site, including a user-friendly layout that conveniently highlights all product news on the front page.

But Sephora didn’t just build their website around their customers’ desire to shop—it also accommodates their pressing need to ensure quality before they buy. This is why Sephora.com is revolutionary for providing sections for user-generated content such as BeautyTalk, a forum for casual customers and experts alike to discuss products, and the Beauty Board, a space for customers to post pictures of how their Sephora-bought cosmetics fare out in the real world.

5. Collaborate with the culture

http://gph.is/1TGai6o

If your customers aren’t already shopping through your website, they’re still likely to research your products online. Beauty bloggers on YouTube and Instagram are gradually replacing counter clerks in educating consumers on the best makeup brands and application lessons. Sephora embraced this culture by partnering with such key influencers, and their collaboration has indirectly increased the brand’s engagement with all other consumers online.

The reason why is simple: word-of-mouth continues to be the best way to market, and these big-name beauty bloggers are trusted by even the most discerning customers. Bloggers will speak plainly when they feel a product is expensive or reliable, and because customers crave this authenticity, they’re more likely to follow their advice than that of expert cosmeticians. Sephora now owes a great deal of its brand awareness to these bloggers who preach the quality of their products; their promotion has helped increase traffic to Sephora’s online storefront and cultivate a positive reputation on social media.

Speaking of social media…

6. Be truly social

http://gph.is/1Az5DFO
http://gph.is/1Az5DFO

Customers hate feeling that they’re speaking to a marketing department; they want brands with an online presence that’s personified, humorous, conversational. This is why being interactive with consumers via social media is crucial in giving them the experience that they want.

Along with actively liking, commenting, and responding to customers’ posts, Sephora frequently uses their Instagram to share looks posted by their fans. The prestige that comes along with this promotion has since encouraged thousands of users to tag #Sephora in their posts for a chance to be featured on their page. It’s Sephora’s sincere, mutually beneficial, give-and-take relationship here that keeps their customers engaged and their social media truly social.

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Combining the best of both in-store and online shopping is what makes Sephora shine in the industry. The beauty brand knows that digitalizing the in-store experience is the new market tactic, but it’s no secret—and it’s applicable to all retailers.

Want to bring your customer service to the mobile world, too? It’s easier than you think! Get started now with a retail app that works for you.

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How Large Retailers Can Localize Their Marketing

We often think of the retail juggernauts as having a huge advantage over smaller, more local retailers. From big budgets and brand recognition to large audiences, it would seem that local retailers just can’t compete. But this isn’t always the case.

Many local businesses succeed where larger retailers don’t because of their ability to target and focus on one specific type of customer in a regionally or culturally specific manner, speaking to them in a way larger retailers cannot. Where large retailers have the breadth in their favor, local retailers have the depth in theirs.

A nation-wide message can’t go too specific in fear of losing the attention of the audience. The message needs to be more generic. For instance, a national shoe retailer would focus in on the new arrivals and best sellers nationwide, whereas a local shoe retailer could design e-blasts and ads that speak to the trends, weather and preferences of the local market.

But thinking about executing this well is probably a bit daunting. Wherever your head office is located, it’s nearly impossible to know what is going on in any other part of the country (let alone world for international retailers!) and would mean hiring more people in marketing to keep track.  Not to mention that the large media buying agencies you work with benefit from buying in bulk, and small, localized efforts would be too expensive for you to execute through them.

So, how do you do it, then? How can you localize your marketing efforts to tailor to the needs of specific locations without going crazy or broke?  Here are the steps towards winning through localized marketing

Step 1. Offer a decentralized marketing budget

The first thing you need to do is decentralize some of your marketing – create a portion of your budget to spend at the local level. This means also decentralizing things like messaging and branding, which may seem frightening at first, but will allow your local stores to cater messages and images to their markets.

If quality control is an issue, you can create a role in head office to make sure that images and messages going through each local store are still to brand standards. You can also create guidelines to follow so that they don’t fall too far out of bounds. The idea is to give each associate in each location the tools and empowerment to reach their audience efficiently.

Step 2. Leverage the wisdom of local sales associates

Your greatest asset for understanding the pulse of local trends and culture is your sales associates. Not only do they live locally, they also interact with customers daily, so they have a great sense of tastes and preferences for the local audience. Sales associates will be your greatest means of localizing your marketing efforts and it is in their favor to participate as well. It is empowering and offers them the tools to increase their sales.

As a good first step, empowering associates with their own storefront, a personalized version of their retailer’s website, to give them the tools to communicate more frequently and directly with their local customers.  On top of that, give them a budget for things like local social media campaigns and geotargeting.

Step 3. Teach them how to geotarget with social platforms

Snaps screenshots from Contently Blog: https://contently.com/strategist/2016/03/18/awesome-snapchat-marketing-case-studies/

In 2015, fashion brand Lilly Pullitzer received all sorts of kudos for creating Snapchat geofilters in select locations that matched some of the patterns in the collection that year.  Shoppers loved them, the media loved them, and they gained all sorts of media impressions on both social and traditional media by implementing them. Total cost? Probably under $1000.

Because the geofilters are self-serve and relatively inexpensive, they are often not considered within large media buys. Big media agencies that work with large retailers probably won’t even suggest them as part of the plan. But both the cost and the ease of implementing them can be executed locally.

Similarly, using Facebook, Twitter and Instagram targeting can also help national retailers tailor their marketing to more local needs. You can target:

  • interests of the audience – tailoring the message to reflect those interests
  • location of the audience – targeting messages hyper-locally
  • demographics of the audience – framing the message to suit the life stage of each audience
  • language of the audience – delivering messages in the language the audience is comfortable in
  • and more…

Once again, these smaller, more tailored campaigns are often not suggested by the large media buying agencies because of their lack of scale, but giving a small budget to your local associates , could be incredibly impactful.

All of these platforms are self-serve and fairly simple to learn.

Step 4. Align messaging and even merchandising to local culture

Photo credit: Bill Brine, Flickr https://flic.kr/p/nf8nbR

Every year, Louisville Kentucky celebrates the Kentucky Derby. This is an enormous event for locals AND out of towners alike. The event attracts over 150,000 people annually, which is a larger crowd than travels for the Super Bowl!

All local retailers benefit from the influx of the Derby, but there is something specific about this event that can make fashion retailers benefit the most: the hats! Practically everyone gets dolled up and wears elaborate hats to the Derby – some home made, others purchased. And it isn’t just women who wear them. Nearly EVERYONE wears a hat. It’s almost unheard of to go without. At the very least, they dress up in their very best Derby gear.

If you are a nationwide department store head, you probably don’t think too much about hats and you probably wouldn’t want to create a nation-wide campaign about hats. Most people won’t care. However, if you have a store in and around Louisville, Kentucky, your marketing AND merchandising  before and during the Kentucky Derby should be all about hats.

By celebrating and supporting local culture, retailers win.

Step 5. Support local communities

Photo by Jerry Bowley on Flickr: https://www.flickr.com/photos/cuppojoe_trips/8600428821

It’s one thing to sell a product that celebrates local events and culture, it’s a whole new level of thinking to get involved in local events and culture. If there is one place where local businesses get all of the love and kudos, that’s with their financial and physical support of local events – from kids sporting leagues to arts festivals to cultural days.

Supporting locally is often in the realm of Corporate Social Responsibility (CSR) departments, but when it comes to smaller locales, this involvement may get missed.

Large Canadian food chain, Tim Horton’s, helped forage their invasion of every small town across Canada by supporting local hockey leagues through their local franchises. They were welcomed with open arms and it increased sales everywhere they went. Large food chain, Whole Foods, is well-known to source as much from local farmers and food producers as possible, making locals feel better about them moving into the neighborhood.

If you are a fashion department store, consider carrying local designers and setting up apprenticeships for local fashion hopefuls. Support any local fashion events. If you are a big box home supply store, consider sourcing what you can from local producers and support local chapters of Habitat for Humanity and buildings that support the local community.

The core here is that the more empowerment and budget you give your local outlets and employees to spend on their local community -whether through events or marketing – the more it will be appreciated. And the more the locals feel that you are embedded in their culture, the more they will make the choice to shop with you.

If you want to localize your marketing, you will make sure your biggest local assets – your sales associates – are empowered.

happycustomer

How Retailers are Harnessing Data to Increase Sales and Make Happy Customers

Data data data. Seems like everywhere you turn these days, it’s being thrown around as the answer to all of your woes, but when you dig deeper, it’s impossible to figure out how to leverage it to solve anything.

Most retailers these days don’t have a problem with data – they have plenty of it! With more and more technology, we have data about our supply chain, sales numbers, customer preferences, and much, much more. The problem is how do we harness this data to make meaningful changes in our customers’ lives?

We think about that a lot, too, so we’ve put together five examples of retailers that are harnessing customer data to increase sales and create happy customers.

#1. Improve Merchandising – Modcloth

If you aren’t familiar with Modcloth, it is an indie fashion site, carrying a mixture of vintage and vintage-inspired fashion. Or, at least until it was recently acquired by Jet.com and Walmart, it was.

Either way, it has a strong community of users that buy up their new arrivals faster than they can post them. The reason that they have this level of commitment and success is due to their incredible openness to customer input in their merchandising program.

Up until the recent acquisition, they had a feature called “Be the Buyer” on their site that invited their customers to vote on the items that were to be added to the store:

This popular feature worked two-fold: they were able to improve their merchandising as well as sell products before they even hit the site. Those that voted on items would be notified when they were available in the store.

#2. Leverage Your Customer’s Passions – Sephora

Reviews and star ratings on a website are quite often more confusing than helpful, but Sephora is a retailer who has learned to leverage the right kinds of reviews to tip confused customers in the right direction.

I’ve often looked at a lip color online and wondered how it would look on me – with my fair skin and hair. Enter Sephora’s Beauty Board, where tens of thousands of customers have uploaded themselves wearing various lipsticks, eyeshadows, blushes and more:

#3. Guide and Empower – Harry Rosen

Some sales are lost because the customer is just plain overwhelmed with choice or an inability to do something as simple as putting an outfit together. Harry Rosen solves this by connecting their online customers to in-store advisors through Salesfloor Connect™. This allows them to increase customer engagement by integrating their own links, buttons, banners or other call-to-actions within product pages as they look native to the site (as seen below). Recent results showed that service requests by customers increased by up to 50% after retailers integrated Salesfloor Connect directly within site pages.

This means that a customer who comes to the site and feels a little lost can reach out to their closest associate. They can start a conversation, search for an advisor and explore their profiles to see one whose style suggestions match their tastes, and get the help they need to make the right decision.

They can even request an appointment to go into the store to get full-service help and reserve products in-store with click and collect. This has been a successful strategy for Harry Rosen. All in all, the in-store sales impact of associates serving the online customer is that for every $10 sold online by associates leveraging Salesfloor, $4 in sales was driven in-store..

#4. Uncover the Latest Trends – Saks Fifth Avenue

For customers who are more about browsing and discovering hot new items, data is useful for this, too. Another Salesfloor customer, Saks Fifth Avenue, is using an associate Storefront, which gives them access to the newly released Most Recommended feature to further customize recommendations to their clients.

How it works is that the Salesfloor’s Associate Data Cloud pulls in data from activities across all stores in the network and displays to shoppers what the most recommended products are that day. Displayed in order by the number of recommendations, the section is automatically populated with the product name, image and price and updated daily. When a shopper clicks on the image, they are navigated to the product detail page on the retailer’s website. The shopper can then continue to shop with their associate as the footer is accessible across the site. They can also live chat or send an email at any time.


[according to these recommendations, it must be Spring dress shopping time!]

What this means is that the customer will get recommended the hottest new items fresh every day. If you are a customer who loves to discover the latest greatest, this use of data will definitely excite you.

#5. Predict Their Next Move – Target

Though the media has made it seem like a bit of a boogeyman to customers, predictive analytics is more useful than nefarious. Almost everyone is familiar with the story of how a father found out his daughter was pregnant through Target’s predictive algorithm (this may or may not have been a viral hoax), illustrating how far predictive analytics has come. Though you never want to move into creepy territory, understanding what your customers are buying and mapping buying patterns in general may help you to better serve your customer’s needs.

If someone buys a bathing suit in winter, you can probably infer that they are planning a warm vacation. It makes sense to follow up that purchase with other items frequently purchased for a winter getaway. If someone starts looking at maternity clothes, it’s pretty safe to say they’ll need baby items in 6 months or so.

As long as you don’t push your boundaries too far – like sending a congratulations note – your customers will feel better served.


These are just a few examples of retailers using data to make happier customers and, ultimately, drive more sales. If you have any other examples to share, let us know.