But why retail? Because it is an industry that we live with every day. Whether it is in the corner shop, when we go to the supermarket, buy clothes or eat in a restaurant.
With the arrival of the Internet, new challenges have arisen within this industry. For example, although the traditional example of a retail business is a store, the third largest retailer worldwide is Amazon.
Retail challenges
The retail industry is characterized by selling to individuals. The bet is that these retail purchases will occur on multiple occasions. According to the Center for Retail Management at Northwestern University , only 12 to 15% of customers are loyal to a single retail company, but at the same time that percentage is responsible for between 55 and 70% of the company's revenue.
Thus, the first challenge that any retail company must face is to achieve recurring purchases of small or medium volume. In other words, to increase the customer life cycle .
Since retail purchases are small volumes, often impulsive and dependent on factors such as geography, the customer life cycle is usually short.
For this reason, one of the keys within the business is to improve the user experience as much as possible. This involves both direct contact at the time of purchase, whether in person or on a website, and after the purchase.
To face these and other challenges, such as logistics, low barriers to business entry, etc., retailers have created a system of four variables called the 4 Rs (like the 4Ps of the marketing mix):
Customer relationship: This involves creating strategies to build customer loyalty by satisfying their needs and providing added value. Why would a customer return?
Relevance: These strategies aim to make the customer feel like the protagonist in the purchasing process and, therefore, the product message must be focused on them.
Reward: This can be a discount or a gift, it doesn't matter what tactic you use, the important thing is to make the customer perceive that they have obtained a greater benefit in relation to their other options.
Cost reduction: This refers not only to reducing our costs, which will allow us to sell at a better price, but also to reducing costs for the customer: how can we make their lives easier and provide them with a better experience?
How to create content with the 4Rs in mind?
Customer relationship
One of the main goals of inbound marketing is to turn strangers into fans. That’s why content creation works well for the retail industry. It’s about offering useful content, whether educational or entertaining, that doesn’t seek to close a sale, but rather to create a relationship.
What types of content? To get this answer, you first need to know your customer thoroughly and know what their purchasing habits and preferences are. This will tell you if they are more gambling data turkey interested in tutorials, product comparisons, etc. But since we are talking about creating relationships, and these between people are created by talking, why not use one of the current marketing trends, chatbots ?
Starbucks chatbot
Source: chatbotguide.org
Relevance
Once again, just like with customer relations, it is essential to know data about our buyers. In the inbound marketing process, the future client advances by leaving us more and more data. From being a stranger, they become a visitor, a lead (although as we saw there are different types of lead ) and, finally, a client.
With this knowledge that we accumulate stage by stage, we will be able to build relevant offers for them.
Taking this relevance to the extreme, retail companies taking advantage of new technologies are beginning to talk about “product personalization.” An example of this is Adidas’ partnership with startup Carbon to manufacture shoe midsoles that perfectly adapt to each user. The video of the result of this partnership is an excellent example of content marketing: it is educational and does not directly seek to sell shoes.
Reward
There are many ways to reward your customers. One of the most classic tactics is through loyalty programs based on points. A customer comes to your store, makes a purchase, and earns points. They accumulate them until they can redeem them for products or services.
One brand that works this system very well is Yves Rocher, a French plant-based cosmetics company, whose entire marketing strategy revolves around its loyalty program. The prices of the products themselves are already a reward for those who belong to the loyalty program. In addition to the fact that the customer will earn points, at the checkout when swiping the customer card, the seller will be able to see what offers are valid if they reach a certain amount.
