New Consumer Loyalty Consolidation Solutions Showcased At NRF Show

Customer loyalty programs remained a hot topic of interest at the 2009 National Retail Federation’s Big Show in NYC earlier this week, and several new innovations debuted with the goal of simplifying the loyalty process for consumers.
Rather than carrying multiple loyalty cards and/or weighing down a key chain with multiple add-ons, the KeyRingThing card is designed to combine up to six club, discount and/or loyalty cards on one credit-card size card. Designed to slip easily into pocketbooks and wallets next to credit cards and cash, the card is accessible at point of sale transactions. In addition to loyalty card consolidation, KeyRingThing will offer a new membership issuance website, enabling consumers to combine up six store cards on one card and also house their account information safely in password-protected accounts.

"At one point, I was cutting bar codes from loyalty cards and pasting them onto old, expired credit cards,” says Tim Jackoboice, Founder & President of KeyRingThing. “Today, consumers need only pick up a free KeyRingThing card from participating retailers, or at the KeyRingThing website. At no cost to them…It's important to many people to take advantage of as many store discounts as they can today. And it's more important than ever for retailers to retain loyal customers."

The KeyRingThing is aimed at increasing the usage and ROI of loyalty programs, as Jackoboice points to research indicating that of the 1.3 billion cards issued, only 39.5% are active. The KeyRingThing is also designed to enable POS advertising, and reaches consumers literally in their wallets.

My HomeStore Card, a free rewards program, enables members to earn cash back from shopping at participating online and brick-and-mortar merchants. The solution is designed to make saving easier for consumers, as it automatically keeps track of earnings.

HomeStore Rewards utilizes a registered-card tracking process. Members can register up to five credit or debit cards, which are used to track members’ spending. The solution is designed to get consumers what they have already earned placed back on the card without any hassle.

Shoppers can visit store websites through a HomeStore Rewards account and are given two options to optimize savings— HomeStore Rewards cash back and/or store-specific offers, provided directly by the store. In addition, shopper can visit brick-and-mortar stores in their area where registered cards can be used at the checkout counter for cash back. The convenient map will display store locations where shoppers can use registered cards.

My HomeStore Card will track everything behind the scenes and display earnings through consumers’ My HomeStore Rewards account. Once the cash back earnings exceeds $25, cash is automatically placed directly on the registered cards.

No-Cost Incentive Program Helps Retailers Reach New Customers With “Prewards”

Written by Debbie Hauss
With zero up-front costs to advertisers, the edo Interactive Marketing Platform allows businesses to target specific consumer groups with incentives called “Prewards” that are loaded on to a facecard prepaid MasterCard. The advertisers pay only when the incentive is redeemed, so the return on investment is a built-in guarantee.

“Implementing the edo Marketing Platform was a no-brainer because there is no up-front cost,” says Jeff Wogoman, director of marketing for Cloudveil, the Jackson, Wyoming based outdoor apparel retailer and wholesaler. “That is the ultimate ROI to me.”

Cloudveil initially tested the program with a selected group of 5,000 consumers, who received a varied incentive of $5, $10 or $15. Wogoman decided that the test would be successful if 40% accepted the incentive and 10% responded. “We are well above the 10% goal at the four-week point,” he notes. Edo reports that many initial advertisers have seen double-digit redemption rates.

“I think this is a good concept because it allows us to reach an audience that we don’t typically get in front of,” says Wogoman. Cloudveil chose to market the program to college students, so Wogoman selected specific universities in targeted demographic areas. “We used internal information to determine that we have pretty good penetration in those areas and our brand is well known,” Wogoman notes. “In the future we may want to target areas such as the Southeast that we want to break in to, where sales may be weak.”

The program for Cloudveil was implemented quickly once the retailers gave it the green light, says Wogoman. “We selected the target areas, provided creative assets, decided on the chosen incentives, and then it was literally done in a week to 10 days.”

Five levels of marketing service
edo Interactive facilitates and services the marketing program via five specific steps:

1. Identify target consumers. edo identifies the target audience, in conjunction with the marketing partner.
2. Promote the incentive. edo promotes the incentive via email, test message or RSS feed to the target group. Consumers then have the option to “accept” or “decline” the incentive.
3. Deposit the incentive. edo deposits the “accepted” incentive onto the reloadable pre-paid MasterCard.
4. Process the incentive. After consumers redeem the incentive, edo processes the transaction behind-the-scenes by identifying the incentive, redeeming the incentive from the card member account, and deducting any remaining purchase balance.
5. Track the metrics. edo offers advertisers real-time information on metrics such as the number of redemptions, redemption locations and average sale size by relevant demographics.

The edo Marketing Platform was initiated as a beta test in June 2008 and will be launched formally in January 2009. During the beta phase, all interested advertisers were welcome to participate in the basic program that offered percentage-off savings. Beginning in January 2009, the platform will expand to offer Prewards in the form of dollar amounts, percentage-off savings and savings based on the amount of purchase. In addition, edo will offer “edoCash” that will allow advertisers to reward customer loyalty with financial or merchandise incentives.

Wogoman is looking forward to offering varied incentives, such as $30 off a $200 purchase, for example. “We also have talked about doing a promotion that we could run on our Cloudveil Facebook fan page that would give a $30 incentive to members who sign up 5 new members.”

Initially the Prewards are being offered to existing MasterCard card holders, but beginning in 2009, the platform will operate using additional types of cards.

Recovery ‘09: Retail Rebound To Take Shape Around Customer Segmentation

Sometime shortly after December 25 when the whirlwind of 2008 is in the books, retailers will need to face the reality of recovery. They will need new strategies for the aftermath of promotions, profit shortfalls and sheer change that the past year has wrought. Many experts are pointing toward customer segmentation as the best way forward.

It may seem obvious at first because most retailers already have some kind of customer segmentation program in place. But retailers can take advantage of changes in the way customer segmentation data is collected and then executed. New segments bring new sales opportunities; changing customer segments demand new cross-channel marketing approaches.

“One of the great things about customer segmentation is the built-in flexibility it provides to retailers,” says Josh Martin senior analyst for The Yankee Group and author of several segmentation research papers. “They show the pain points and the pleasure points for different customers. They are not necessarily a snapshot of today’s customer. They are an indicator of the latent behaviors customers will exhibit in the future.”

Martin sees a key trend emerging in the customer research and execution of segments. Demographic information is still important, but taking its place on the priority list is psychographic behavior, and in turn, psychographic segments. Martin calls psychographic segmentation a “totally different approach” and one that is more easily acted on by an entire retail organization. For example, a sales person at a consumer electronics chain can be relevant to a customer if he knows their technology behavior and aspirations. Knowing simple information such as income and age may not lead to a strong relationship.

For example, Martin’s September report on mass market consumer technology adoption focused on five customer segments, but none of them were demographically-based. High-income groups were not as actionable as a segment called “technophytes.” These are consumers with the desire to be cutting-edge, but who feel no urgency to do so. This group makes up 22% of the consumer population. They drive volume as prices drop and early adopters move on to new technology. "Outlet Jockeys” are defined as the road warriors who make up 15% of the consumer population. They are willing to experiment with new mobile services and devices to achieve total connectivity.

Similar customer were profiles were identified as part of a new Retail Consumer Dynamics Study, an analysis of consumer shopping behavior and attitudes in today’s difficult economic times, released by interactive marketing services provider Acxiom Corporation and conducted by BIGresearch. With the reality that many consumers will be deferring spending, the Consumer Dynamics Study looked at how behavior may change outside of pure demographic circles. The study identified that “Savvy Spenders,” defined as mostly married, affluent and living in out suburbs, are more likely to spend sooner than other segments. The “It’s My Life” segment, defined as young consumers living in urban areas without children, is not likely to let economic conditions change their shopping behavior.

“This challenging economy creates an exceptional opportunity for retailers and consumer product manufacturers to target direct messages to specific consumer segments in order to sustain and maximize a return on marketing investment,” said Jim Harold, industry executive for retail and consumer markets at Acxiom

Cross-Channel Segmentation
Customer segmentation is also affected by cross-channel strategies. Just as consumers will reveal their behaviors and aspirations via surveys and product purchases, they will also generate data through click-stream traffic analysis and customer engagement behaviors. Take for example, the home improvement customer that clicked on an ad for a lawn mower, but didn’t buy. He may have moved on to a lower-priced model, bought from a competitor or postponed the purchase. Online and offline advertising, and then collecting the engagement data, can provide behavioral clues. They can also increase conversion rates.

“When we first started to sell online advertising, retailers were just buying space,” says Vikram Sharma, CEO of ShopLocal.com. “Now they’re not interested in space, they’re interested in people. It’s not that consumers hate ads, they just hate the wrong ads.”

Sharma’s company has created several products that put local advertising products online. For example, SmartCircular, allows FSIs to do double duty as a print insert and then as an internet-based ad for local searches. The online ads feed in-store visits. They also provide key data for potential segmentation.

“Retailers need to think cross-channel,” he says. “Let the customers have a holistic experience. It is much more important to define customer segments within all channels, not just within a single channel such as e-commerce. Internet ads will become a more important part of the mix once retailers realize that online activity can feed offline activity. Consumers spend 20% of their time on the internet, but companies only put 8% of their dollars there.”

myShape.com Improves Conversion Rates Via Personalized Assortments

By Debbie Hauss
Bringing personal shopping to ecommerce, women’s apparel retailer myShape.com is reporting an average of 6-8% conversion rates (and as high as 16% in some cases), according to Mercedes de Luca, global customer experience officer and CIO for the two-year-old company. Typically, industry average ecommerce conversion rates are 1-3%.

With patented Personal Shop technology, myShape provides female apparel shoppers with customized assortments that cover three attributes: body measurements, body shapes and personal preferences. “Because the items they purchase from us fit better we tend to see a reduction in returns,” says de Luca.

Once the customer provides information on her measurements, body shape and personal preferences (such as snug fit versus loose fit and sleeveless versus long sleeves), myShape returns a customized assortment of in-stock items that can be purchased immediately. The assortments are updated in real-time.

To date, myShape has more than 400,000 member shoppers. A demographically diverse group of women have signed up for myShape, says de Luca. “We have been amazed by the range and age of women on our site. It’s really a more psychographic group of women – such as those who are too busy to shop or don’t like to shop.”

Shaping Up The Customer Experience
myShape is working to improve the customer experience in a number of ways. The retailer is taking advantage of third-party technologies such as Baynote Recommendations, which is context-driven software that shows shoppers products that other shoppers are browsing and buying. The myShape team took the SaaS Baynote product one step further and personalized it by adding the suggested companion pieces to the customer’s personal shop page.

The company also is looking at technologies “around improving the customer experience during shopping and at checkout,” notes de Luca. “Because the personal shops are built in real-time and are unique, we want them to build quickly and contain as many items as possible.”

To make the use of third-party providers work smoothly, de Luca is planning to enlist the services of INETCO, which provides real-time transaction monitoring, including:

• Consistent visibility into the entire, end-to-end customer purchase process, both on-line and in-store
• Real-time alerting of transaction slowdowns, failures, fraud patterns and reversals that are impacting revenue and customer experience
• Quick isolation of network and application performance issues affecting business critical processes such as the purchase cycle

“You are depending on your service providers to help deliver the best customer experience and that’s where INETCO comes in,” says de Luca. “INETCO gives the drill-down to the technology folks so they can uncover any problems, such as bottlenecks in transactions, which could be the result of a third-party provider.”

Right Offering at the Right Time
Although it is two years young, myShape is proving to be an idea whose time has come. “As the web explodes with more offerings this becomes even more relevant,” notes de Luca. “We are giving women control over what they see and how they see it. In essence, the shopper becomes her own merchandiser.”

The myShape site will continue to evolve with new services and offerings, including a social networking component,” says de Luca. “We also have several other partnerships we’re working on that should be launching in the next 30 to 40 days.”

Oracles Tests Sales Assistant For iPhone With The Body Shop, Free App Available Next Week

Tapping into the growing use of the Apple iPhone, Oracle created new applications that enable sales associates to access enhanced CRM tasks and information. The Oracle Mobile Sales Assistant and Oracle Mobile Sales Forecast for iPhone will be available as free downloads from the Apple App store in November 2008. To introduce the new applications, Oracle worked with The Body Shop to create the first prototype. “The prototype we have built with the Body Shop highlights the power of Oracle CRM and the Apple iPhone," said Anthony Lye, SVP of Oracle CRM. "We see the iPhone as a new and significant channel for companies to extend and enhance the relationships they have with their customers. Complete CRM is a combination of transactions, analytics and conversations.” The Body Shop prototype allowed consumers to use their iPhone in place of their loyalty card and also added social networking applications so that consumers could share wish lists and new product information with their contacts. The networking features of the Mobile Sales Assistant are part of Oracle’s strategy around “Social CRM,” whichenables users to become more effective and productive in their jobs through collaborative applications that become 'smarter' by leveraging the collective intelligence of social networks and work both within and outside the barriers of companies. The Oracle Mobile Sales Assistant embraces Social CRM by providing immediate access to critical information - virtually anytime, anywhere - removing barriers to productivity and collaboration, and ultimately resulting in better customer insight that helps improve customer satisfaction, reduce costs, and increase sales. The Oracle Mobile Sales Assistant uses Web services to exchange information with Oracle CRM On Demand, as well as traditional on-premises versions of Oracle’s Siebel CRM applications, including Siebel CRM Marketing, Siebel Loyalty, Siebel E-Commerce, Social CRM and Real-Time Decisions. “Enabling ‘anywhere’ access to corporate business applications is a top IT strategy for enterprises as smart phone adoption and mobile corporate email use increase,” says Sheryl Kingstone, Director of Enterprise Research, Yankee Group, in a recent press statement. “With 45% of companies stating mobile access through wireless technologies is the most strategic decision impacting their business application decisions for the future, Oracle Mobile Sales Assistant and Oracle Mobile Forecast for the iPhone are meeting crucial needs of sales people and businesses.” To address security and privacy issues, Oracle built in access to the system using secure user names and passwords. Once accessed, the Sales Assistant connects the user to the enterprise CRM applications, Microsoft Outlook contacts and calendars, and social networking sites on the Internet. Oracle leverages iPhone with BI tools Oracle initiated its relationship with the Apple iPhone via the Oracle Business Indicators, which allow users to view and interact with Oracle Business Intelligence (BI) Applications. These apps include financial, human resources, supply chain, and customer relationship management analytics, as well as analytical alerts generated by Oracle Delivers, an integrated component of Oracle Business Intelligence Enterprise Edition Plus (OBIEE). Taking full advantage of the Apple iPhone mobile platform, Oracle Business Indicators is built as a native application to offer highly intuitive and flexible features including browse, search, and favorites for a superior overall end user experience, according to Oracle. By expanding the ways mobile workers can view and act on performance data, Oracle Business Indicators can help bring business intelligence to a broader range of users, adds Lenley Hensarling, Oracle Group VP for Applications Development, in a press statement. "Oracle Business Indicators offers a way for managers to perform tasks specific to their daily jobs without requiring them to navigate through a full function application ported to a smartphone," he explains.

New Study Points to Sales Opportunities Within Emerging Demographic Groups

By Debbie Hauss

In tough economic times, everyone wants a good deal, particularly in the U.S. In a recent survey, GfK Custom Research found that 76% of Americans strongly/somewhat agree that “I feel really satisfied with myself, even excited, when I get a really good deal.” That number is 10 points higher than the total number globally for other countries. The GfK August 2008 report includes input from more than 1,000 U.S. shoppers over age 18 and more than 500 Hispanic consumers to determine the best ways to reach specific populations.

A number of factors contribute to Americans’ desire for discounts and deals. In 2008, first and foremost is the state of the economy, and recent events on Wall Street are driving consumer confidence even lower. Couple that with the fact that consumer incomes are not keeping pace with inflation. GfK reports that incomes increased 0.1% in June compared to a 0.8% rise in inflation.

Directly related to the economy are gas prices, which reached a peak in July and are inching up again following the recent hurricanes. In April 2008, 82% of consumers said that gas prices were hurting their households a lot or somewhat. In August that number dropped slightly to 78%. Prices dropped slightly during that time, and “Over time people do adapt,” notes Diane Crispell, Executive Editor at GfK Roper Consulting.

As people adapt to their economic situation, they adjust their spending and shopping habits. The study reports that 81% of adults agree strongly or somewhat that they now “think more about what I buy compared to a year ago.”

Reach out to consumers where they live and shop
To be successful retailers must offer the right deal to the right customers at the right venue. In total, over-18 shoppers are drifting towards discount stores like Target and Wal-mart and away from upscale department stores like Nordstrom and Macy’s, GfK reports. As many as 27% of shoppers are spending more at discount stores versus 4% at upscale department stores.

Convenience also is key. GfK reports that 17% of consumers are spending more shopping dollars at locally owned, independent stores and 16% are frequenting warehouse stores more often.

Breaking down the survey results into specific populations, GfK reports the following:
Middle-Aged and Older Consumers are seeking the convenience of neighborhood stores. 81% of consumers over the age of 35 are shopping close to home and 84% of indicate they like to support businesses in the community.

Younger Adults are the biggest group of online shoppers. Within the 18- to 34-year-old age group, 87% agree strongly or somewhat that they shop online for ease of price comparison and low-pressure sales; and 96% say they find a better variety of products online. These results are 6-7% higher than the total population. Younger consumers also are looking for creative ways to save. Among the 18- to 34-year-olds, 61% bought a used item instead of brand-new (versus 51% for the total population); and 57% have rented an item rather than buy it (versus 43% for the total population).

Affluent shoppers are also strong online consumers. Adults with household incomes of more than $100,000 shop online to compare prices (92% versus 84% for total population) and save money (66% versus 59% for total population). In addition, affluent consumers may be contributing to increasing coupon redemption. Into 2007, coupon redemption had been declining for 16 continuous years. But in 2007 Americans reversed that trend and redeemed 2.6 billion manufacturers’ coupons. Among affluent adults, 33% printed an online or e-mailed coupon versus 25% for the total population; and 21% used online coupons for Internet purchases versus 17 % for the total population.

Hispanic consumers look for a positive social experience. A higher percentage of Hispanic adults consider shopping a social, family endeavor, versus the total population. 87% strongly/somewhat agree that “It’s fun to browse in stores to see what is new and different.” In addition, 84% consider shopping a good family get-together; and 76% go to stores as a good opportunity to “get out of the house.” Also, Hispanics are the least likely group to look for different ways to save on purchases.

Additional findings
While “Made in the USA” is still a draw for 80% of shoppers, it is not as powerful as it used to be, and it means the least to Hispanics and young shoppers. Among Hispanics, 68% say “I don’t really care where a product comes from as long as it serves my needs” and 70% of consumers aged 18-24 share this sentiment. These two groups are the only consumers that have a higher percentage of shoppers that don’t care where it’s made versus those who say they would pay more for products produced in the USA.

Word of Mouth is an increasingly powerful way to market products. GfK reports that 79% of consumers ask a friend of family member for product recommendations, up from 70 % in 2006; and 51 % go online to read product reviews, up from 46 % in 2006.

Conclusions
Discount stores, online shopping and convenience local establishments are the bright spots in the retail marketplace right now, as consumers struggle with challenging economic times.

Retailers who focus on catering to their specific shopper base will be the winners, even if that means “that you will not necessarily lose as much ground as you might have otherwise,” notes Crispell.

In addition, much of U.S. spending continues to be discretionary, says Crispell, “not truly needs based” so retailers can grab those spending dollars with great deals and attractive and convenient shopping experiences.

Revolution or solution? InfoSys Bows Shopping 360 For In-store Usage

By John Gaffney, Senior Editor

It might be the long sought solution for click tracking in stores. Or it might be another customer tracking technology that takes a long time for retailers to understand and adopt. Whatever it turns out to be there are certainly some dramatic possibilities in InfoSys new Shopping 360 technology. As positioned by InfoSys executives, Shopping 360 is a combination of auto-ID technologies that allow retailers to track shoppers as they travel through a store and even as they browse shelves and make purchases. This tracking is enabled by an in-store network of wireless sensor-based applications. “It enables real-time collaboration between people (shoppers), places (retailers) and products (CPG companies) at the point of purchase,” says InfoSys.

The product is patent-protected and secretive at this time. However, it is being pitched by the company as a technology that is affordable and a generator of information that will lead to more customer loyalty and even more total spend. The jury is still out on whether Shopping 360 will displace RFID technology. The company says it monitors shelf activity without “expensive RFID tags.” The cost is expected to be low. In fact it is “without capital investment” according to the company’s collateral material.

It also has a mobile phone component. “A software application gets downloaded onto a shopper’s cellular phone when they opt-in to use the Shopper Concierge service (the application in Shopping 360 that serves shopping lists and targeted offers). The software application communicates with the ShoppingTrip360 platform over the wireless Internet,” says an InfoSys spokesperson. “This permission-based opt-in network ensures that the shopper controls his own privacy and ability to interact with the store network. It also ensures that CPG companies for the first time in history have the ability to interact with the shopper at the moment-of-truth in a location-aware and context-aware environment. The shopper can download recipes, shopping lists, and receive advertisements, coupons, relevant messaging. The shopper can finally actively engage with this network just like she does today when she logs onto the internet.”

The technology has been in beta testing and the company isn’t saying what retailers or CPG firms have been involved. But if it’s a wireless technology that enables the amount of in-store tracking and information collection that it promises, many retail analysts are hyped.

“Our firm often talks about the notion of an in-store "cookie" and what it may one day be,” says Laura Davis Taylor, CEO of Retail Media Consulting. “Many times, we've talked about enabling the cell phone to serve this role, as it seems logical that a shopper might one day be able to "identify" their presence with their phone for opt-in shopper tracking--if they are motivated to do so. Reviewing the Infosys technology was very exciting for us because it appears to embrace all of the above. It links shopper data, shopper behavior, inventory, store operations and more to provide an "ecosystem" of sorts that can generate some of the powerful insights e-commerce websites do--and isn't that the model we should be going for in-store? Most importantly, it's permission-based, ensuring that it will be accepted while allowing the retailers to learn how to better serve their shopper. Kudos to them.”

Among the technologies promised in the Shopping 360 network are “store heat maps” which track cart paths; “smart shelves,” which track inventory and shelf browsing activities; and “smart visual merchandising” which enables couponing, more information on products and recommendations on new products.

What will it do for retailers and CPG firms? Retailers can monitor the total number of shoppers and their shopping trip paths, allowing them to gauge in-store energy demand based on occupancy, or open new checkout counters when lines start forming. CPG companies get granular visibility on the efficiency of their promotional spending, through an analysis of shoppers who interact with promotional displays, or through monitoring shopper traffic to a particular area as well as subsequent purchases.