Customer Engagement

Trends in Retail for 2019

Strategies, tips, and winning formulas to boost retail marketing
 What’s Inside this eBook?
Note to marketers 2

#1 Importance of customer engagement and retention 3

#2 Challenges in retaining existing customers and driving 5

repeat purchase

#3 Customer engagement strategies to consider in 2019 8

#4 What’s more challenging - Customer acquisition or 11

customer retention?

#5 Winning formula to acquire and retain customers in 2019 15

Conclusion 19

1
Note to marketers
When e-commerce giant Amazon made a foray into brick and mortar shops in 2015,
the retail industry was in for a surprise. Natalie Berg, the co-author of ‘Amazon: How
the world’s most relentless retailer will continue to revolutionize commerce,’
explained, “Very few people exclusively shop online or only in store. They marry the
best of both worlds.” Macy, an American department store also discovered that
customers who shopped in-store and online were 8x more valuable than those who
shopped from a single channel.

The retail industry is steadily shifting its focus from brick and mortar to a click and
mortar business model. Today, the brands are focused on creating micro-moments
for the shoppers by leveraging upon omni-channel marketing. For example, a
shopper would prefer to check a product online before buying it from the closest
retail shop.

The focus has shifted from selling products to selling experiences. A study by Walker,
a customer intelligence consulting firm, reveals that customer experience will
overtake price and product as the key brand differentiator by the year 2020.

The key to success is building a blended customer experience, and retailers can no
longer afford to ignore it. As customers use more and more connected devices to
shop, retailers have to find a way to tie all the channels together to create a unified
and personalized experience for the customer. They can no longer focus on just one
channel for their business.

There is stiff competition among the small and big players in the industry, and the
global retail market is expected to reach $31,880 billion by 2023 according to a study
by Mordor Intelligence.

It is time for you to don the hat of a CEO (Customer Experience Officer) and think of
ways to strengthen the customer engagement strategy.

We have created this e-book to help you prioritize and revamp your strategies (if you
must) to become a formidable player in the industry.

To help you shape your customer strategies to build a best-in-class experience for
your customers we have included valuable opinions from 10 marketing experts.

The global retail market is

expected to reach $31,880 billion
by 2023.
-Mordor Intelligence

2
#1 Importance of customer engagement and
retention
Costco, a warehouse club based in the United States is known to be one of the
safest retail stocks to invest in NASDAQ stock exchange. What makes the
company unique is its customer loyalty program. The company’s warehouse works
on a membership model, just like Amazon Prime, which has earned more than 100
million subscribers worldwide. While customer acquisition is an indicator of
success, the truth is, customer retention is 5 to 25 times cheaper than acquisition.
With so many retailers vying for your customer’s attention, it’s important to
engage the existing customers and retain them with benefits and loyalty
programs. We asked our experts for their opinion on the importance of customer
engagement and retention for retail brands. Here’s what they had to tell us.

Customer retention is 5 to 25
times cheaper than acquisition

“Several studies have eluded to the fact

that it's so much harder and more
expensive to get a new customer, as
opposed to keeping and selling to existing
ones. So once a retail
business does find a new customer, it's
imperative to work just as hard to give
them a great experience and keep them
engaged with the brand - always looking
to reconvert into more and more sales.”

Matt Warren, Founder, Veeqo

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“Ultimately, the most important part of customer
engagement and retention for retailers is to
maintain relevance as a brand. Customers will not
be ready to purchase your product again
immediately, so it’s imperative your brand
remains top-of-mind until the customer is ready to
purchase again. Furthermore, it is expensive to
gain a customer’s trust initially, so it’s vital to
retain them once you have gone through the
initial work. After all, repeat customers are where
longterm profit comes from.”

Chad Siovaila
Director of Performance Marketing,
One Click Ventures

“As seen on the example of Amazon, the customer experience is paramount. It is

essential to build the trust and sense of comfortability similar to welcoming and
almost nurturing atmosphere, that I believe, Sigmund Freud would be proud of. A
great example of the
company using AI to find this is YOOX, altering the customer approach in the luxury
fashion world like as a storm. I believe that results always speak for themselves and
you don't have to be a designer any more to make a great design as the most honest
form of creation. All is achieved and mastered through trial and error. As for the newly
established but dynamically developing brand, Raycon Global (featured by Google as
a great
customer success in January 2019), customer experience is very important too.
Raycon designs some amazing true wireless products at a fraction of the cost from
the big
players and we believe that this success is achieved by customer engagement and
customer experience orientation.”

Frank A. Di Olivero, Global Director Marketing, Raycon Global

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#2 Challenges in retaining existing
customers and driving repeat purchase
Today’s customers have many options to choose from while shopping. That’s
precisely the reason why despite the loyalty programs or membership plans,
retailers find it difficult to retain the existing customers. According to a survey by
Retail TouchPoints, here are a few challenges that retailers faced while driving
repeat purchases in North America.

What are the Biggest Challenges in Driving Repeat Purchases for Retailers in
North America?
of repondents, Nov 2018

Long purchase cycles for products 49%

Competition from lower-price competitors 44%

Losing subsequent sales to marketplaces like

36%

Amazon Lack of customer contact information 35%

for retargeting Insufficent budget for retargeting 21%

Source: Retatil Touchpoints, "Customer Acquisiton and Retention Benchmark

Report" sponsored by Extole, Dec 6, 2018

As the competition between the retailers grows fierce and with longer purchase
cycles, retail companies have to think of new ways to retain existing customers
and drive repeat purchase.

Here’s what our experts have to say about the challenges.

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“Blind brand loyalty is extinct‚ consumers are
no longer indebted to a certain brand
regardless of what its competitors are doing.
Instead, their
purchases are based on who captures their
attention in every new moment and time of
need. They are functioning from a new
method of
shopping where more space exists between
being a browser and becoming a buyer‚ and
that’s a time consuming challenge for
retailers if they don’t know where to start.”

Steve Gershik
Chief Marketing Officer
inRiver

“For consumables, we do not have difficulty

with repeat customers. For apparel, it is more
difficult because sometimes people do not
need more of one product. This causes our
retailers to develop more product which can
potentially go to waste. We always
recommend that our retailers offer
consumable products to draw customers to
their stores. Nordstrom does a great job at
this. They offer beauty products which also
gives people an opportunity to browse
non-consumable goods and potentially
increase their order sizes.”

Brian Sheehan, Sales Manager

Retail and eCommerce
Fulfillment
Hollingsworth LLC

6
“* Keep our brand on top of their minds
whenever they have a need or their buying
intention arises.
* Not overwhelm customers with too many
messages
* Provide cohesive and consistent messages
across different channels at the right place
and at the right time.
* Personalize messages based on their
lifecycles, journeys, purchasing habits and
loyalties.
* Measure performance and attribution of
different remarketing, retargeting,
reactivation and resurrection campaigns on
multiple
platforms.”

Albert Mai Growth

Marketer GlamCorner

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#3 Customer engagement strategies to
consider in 2019
Customer engagement is going to be of paramount importance for retailers in 2019.
A survey by NewVoiceMedia shows a whopping $41 billion loss in the US alone due to
poor customer service. Nancy Friedman, a customer service expert and president of
The Telephone Doctor Customer Service Training Inc. said, “Retailers spend lots of
marketing dollars trying to convince us to buy their products, but if that contact is
not handled just right at the point of sale, all that money is wasted. Customers
service failures not only impact sales and return business, but can damage a brand
and lead to online shaming on social media.” Having an omnichannel strategy is not
enough; retailers have to rethink how they will connect the dots between in-store
and online environment to create a truly memorable experience for the shoppers.
We asked our experts what kind of customer engagement practices will be adopted
in retail this year. Here’s what they had to say.

$41 billion loss in the US alone due to

poor customer service. -
NewVoiceMedia

“This year and beyond, brands are going to start

competing much more on things like
experience. And, for me, one of the biggest
practices set to be adopted on a greater scale is
having an omnichannel retail strategy. This
doesn't mean we're necessarily going to see a
huge increase in physical stores opening up. But
rather, we'll see brands start showing up
everywhere customers are - direct selling
across all forms of social media, branded
smartphone apps, pop up stores. And then
backing this up by providing a multitude of
fulfillment and returns options. By 'being
everywhere', brands are much more likely to
keep customers highly engaged and, as a
result, purchasing more frequently with them.”

Matt Warren, Founder, Veeqo

8
“This year and beyond, brands are going to
start competing much more on things like
experience. And, for me, one of the biggest
practices set to be adopted on a greater scale
is having an omnichannel retail strategy. This
doesn't mean we're necessarily going to see a
huge increase in physical stores opening up.
But rather, we'll see brands start showing up
everywhere customers are - direct selling
across all forms of social media, branded
smartphone apps, pop up stores. And then
backing this up by providing a multitude of
fulfillment and returns options. By 'being
everywhere', brands are much more likely to
keep customers highly engaged and, as a
result, purchasing more frequently with them.”

Robin Tombs
Co-founder and CEO
Yoti

“The rise of voice assistants will force retailers

to return focus to their local footprints and
capitalize on local search and brand
reputation via what I call Voice Engine
Optimization (VEO). Voice assistants will
improve customer experience as they become
even more humanized this year, with new
updates that fix common voice recognition
errors and more businesses optimizing their
content to be speakable. VEO is the new
content marketing strategy businesses will
adopt to provide these voice assistants with
questions and answers that consumers are
frequently asking, so the device correctly
offers the nearby business as a solution to
their ask.”

Collin Holmes, Founder and CEO,

Chatmeter

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“I believe that companies that focus on the economic cycle to address customer
engagement practices will have an advantage. AI is a must. If you don’t have and
utilize it, you will not be able to compete. We know that the economic cycles are
driven by feelings and now we are at the end of this cycle when we are
experiencing a recession (guided by the feeling of fear), trust is extremely
important. The great example to prove this theory is Hyundai, which during the
great recession (then all the car companies fell on average by -40%), it grew by
~37%. Key factors will be building trust, providing better return policies and better
product/service warranties.”

Frank A. Di Olivero
Global Dir. Marketing
Raycon Global

“We see it already, customer engagement

especially the target group 34 years and
under is getting engaged on Instagram. So it
is a logical way to teach them the hashtags
e.g. via store signs or online purchase
confirmation mail, you wish them to use on
social media. You can even engage them to
post your companies hashtags via a weekly
sweepstake. This year the number of stores
adapting this practice will increase
dramatically.”

Nina Rittinghaus
Social Media Marketing Expert
DeinDesign GmbH

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#4 What’s more challenging - Customer
acquisition or customer retention?
While the 2018 survey by Retail TouchPoints show that retailers spend almost
10%-40% on both acquisition and retention, nearly three times as many retailers
preferred to allocate over 50% of their budget on an acquisition. Retailers find it
challenging to retain customers and drive repeat purchase. However, we wanted
to hear directly from our experts on what they thought was more challenging.
Here’s what they had to say.

R
Retailers spend almost 10%-40% on
both acquisition and retention. - Retail
TouchPoints

“Both will be challenging, but I think customer

retention will be harder. If brands are
competing on customer experience then this
means the overall standard will inevitably rise.
Meaning customers will soon come to simply
expect certain things (like free, unlimited
returns and try before you buy). Your brand
may get a new customer, but if the
experience doesn't meet these higher
standards then
you'll lose out on retaining them.”

Matt Warren, Founder, Veeqo

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“New customer acquisition will be more
challenging in 2019. With the rapid growth of
direct-to-consumer brands in the last few
years, and no sight of this stopping in 2019,
more are becoming increasingly well-funded
and
aggressive with trying to grab market share
through advertising. It doesn’t matter if they
aren’t your direct competitor, as they are
flooding the market with funds and raising
prices for advertising on Facebook,
Instagram,
television and radio. Companies focused on
specific customer acquisition costs will see
these increased prices harm their ability to
deploy
funds to acquire customers.”

Chad Siovaila
Director of Performance Marketing
One Click Ventures

“Customer retention will be very

challenging. The market is very
competitive and people are working on
their marketing campaigns constantly.
Not only do you have to have a strong
marketing campaign to encourage
repeat purchases, you need to have great
customer service too! Customer service
that is personable and professional will
help you
retain your business.”

Brian Sheehan
Sales Manager - Retail and eCommerce
Fulfillment Hollingsworth LLC

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“New customer acquisition will be more
challenging because once customers have
the first interaction with a brand, it will be
easier to personalize the experience and re-
engage with them via different means
based on their details, preferences and
behaviors. Brands know who they are, what
they like and their jobs to be
done. Whereas for new customers and
prospects, it’s challenging for brands to
customize the experience and tailor the
customer journey to particular needs and
wants in order to help them make decisions
easier, without enough data about them.”

Albert Mai
Growth Marketer
GlamCorner

“I would definitely say that the most challenging and at the same meaningful,
will be new customer acquisition. Studies have shown that people are willing to
pay more to someone they like than someone they don’t. In this process, offering
lower prices won’t be enough. A strategy similar to T-mobiles will be needed to
focus on new customer acquisition. A company has to always venture for new
customer acquisition in order to ensure
sustainability and compatibility.”

Frank A. Di Olivero
Global Dir. Marketing
Raycon Global

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“For us, customer retention is THE THING, as
nowadays new customer acquisition is
getting way too expensive. That is why we
count on entertaining the customers, value
them and also give them a lot of specials in
our newsletter and on social media
accounts like winning free movie theater
tickets.”

Nina Rittinghaus
Social Media Marketing Expert
DeinDesign GmbH

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#5 Winning formula to acquire and retain
customers in 2019
Michael Brenner, the CEO of Marketing Insider Group, said, “In today’s age,
everything is a commodity. Nobody cares about your product, your brand, or the
color of your logo. Experiences are the only way to differentiate yourself. Experiences
are the only thing we are willing to pay a premium for. So, customer experience has
to be the #1 priority for every business, every marketer, every brand. In fact, research
from a number of analyst firms proves that Customer Experience is identified as
either the #1 priority or the top challenge for businesses today.” From real-time
personalization to integrating technology to offer a seamless experience, creating
best-in-class customer engagement will be the core focus of the retailers. When we
asked our experts about the one thing that marketers should do to win and keep
more customers, here’s what they had to tell us.

Customer experience has to be the #1

priority for every business, every
marketer, every brand.

“Invest in the experience you're giving

people. It's no longer just about the
quality of a product. Shoppers in most
niches now want to be 'wowed' with the
experience, or they'll simply go
somewhere else. So place more
focus on the customers you do have, as
opposed to putting everything into
acquiring new ones.”

Matt Warren, Founder, Veeqo

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“Marketers MUST turn their focus to local if
they want to win and retain customers and
sales. 76% of shoppers using a local search
site will visit a business within just 24 hours
and 95% of searchers will find the store they
need without ever having to scroll past the
first page of results. Building visibility and
authority within your local markets means
that your location stands out above the rest
of your competitors. Visibility can be defined
by how many different keywords you rank
well for (how often you will show up on page
1 when someone searches for your
product/service), whereas authority can be
determined by how well you rank in
comparison to your local competitors. Some
of the best leading brands are committed to
engaging with customers on a local level
and with an integration of both online and
offline experiences.”

Collin Holmes, Founder and CEO, Chatmeter

“Treat their online product information like

brick and mortars treat their window displays.
This is where online browsers come to make a
judgment call about the necessity, availability,
customizability and trust of what you’re
offering. This is also the time to focus on the
emotional connection over the tangible
product, until a customer receives a product in
their hand, their purchase was purely based on
information and connection forged online.
From an online web page, particularly one
where you are listed among your competitors,
an emotional connection and consistent,
relevant and accurate brand information will
sway the browser. If a consumer is unable to
find or trust your product information then you
are missing out on your biggest revenue
driver.”

Steve Gershik, Chief Marketing Officer, inRiver

16
“In this modern age of retail, it’s all about
customer service and being genuinely
focused on the customer’s needs and wants.
If you aren’t really listening to your
customers and adopting what you hear to
serve them better - and
admitting when you’ve failed them - you
may get the first purchase, but you certainly
won’t earn the long term relationship of
repeat business that you really want.”

Chad Siovaila
Director of Performance Marketing
One Click Ventures

“Marketers need to become more visible

AND attend events where clients are looking
for a service provider (i.e. trade shows). We
are focusing on our SEO efforts and creating
top funnel content to attract potential
customers to our website.”

Brian Sheehan
Sales Manager - Retail and
eCommerce Fulfillment
Hollingsworth LLC

“Focus on serving the customer and

keeping reviews positive.”

Stacy Caprio
Founder
Accelerated Growth Marketing

17
“There is no one thing that marketers do to
win and keep more customers in 2019. In a
competitive landscape and increasing
expectation from consumers, marketers
must work on optimising end-to-end
customer journey across multiple online and
offline touchpoints from ads they see,
landing pages they view, products they
browse, the checkout process they go
through, customer support they experience
and the messages they read, to products or
services they receive.”

Albert Mai
Growth Marketer
GlamCorner

“In order to win and keep more customers, marketing approaches should be
based on technology. I consider it to be the most important factor also relying
on the Solow Swan (a Nobel prize winning) economic model. AI should always
be a major part of the new era marketer’s life in order to make a success in
their endeavors.”

Frank A. Di Olivero
Global Dir. Marketing
Raycon Global

“Interact with customers like you would

with your friends.”

Nina Rittinghaus
Social Media Marketing
Expert
DeinDesign GmbH

18
Conclusion
The message is loud and clear - customer experience has to be the core of all your
marketing strategies. No matter which technologies you use and whether your
focus is to retain or acquire customers, you have to tie down all of it together into
building a positive, seamless experience for your customers. We have tried to
bring opinions from marketing experts so you can think of new ways to engage
with your customers.

Engagement marketing for retail

MoEngage is committed to helping retailers improve their conversion rate
through personalization.

69% of online shoppers abandon

their shopping cart. With
MoEngage's
advanced cart abandonment
solutions you can re-initiate and get
users back. Generate more revenue
by tapping into the abandoned
user-base.

Drive more revenue with AI powered

dynamic product recommendations.
Our intelligent Sherpa AI algorithm
helps you engaging your shoppers
with relevant product
recommendations.

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Create, visualize and deploy lifecycle campaigns to engage your users - wherever
they are. Send rich, personalized messages to guide them along their shopping
journey.

About MoEngage
MoEngage is an intelligent marketing cloud, built for the mobile-first world. With
AI-powered automation and optimization capabilities, MoEngage enables
hyper-personalization at scale across multiple channels like mobile push, email, in-
app, web push, and SMS. Fortune 500 brands across 35+ countries such as McAfee,
Samsung, and Vodafone use MoEngage to orchestrate their omnichannel
campaigns. MoEngage has been featured on Gartner’s Magic Quadrant for two
consecutive years and is the youngest company on the list alongside giants such
as Salesforce, IBM, and Oracle.

To talk to an expert about customer engagement and conversions in retail, write to

us at hello@moengage.com

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