Invisible customers are crying out for recognition
Retailers’ invisible customers are crying out for recognition – the rules have changed. Instead of battling for loyal customers by requiring them to use a store credit card, retailers need to recognise their shoppers’ individual needs.
Imagine a hypothetical customer who is, by any standard of measurement, an avid and active department store and speciality retail shopper. We’ll call her Jane. If you are a retailer with a store in the local ‘mall’, you can bet that Jane has been in your store. She is clearly a ‘best customer’ – she visits your main store at Bluewater an average of four times a month and spends an average of £50 per visit. Jane also spends three times that amount with your competitors. But you have never seen her. In fact, when she walks into your store, she’s invisible. And when she walks out, you have no idea that she was ever there at all.
See Jane ignore her Department Store Card
Let’s say that Jane stops at the Store A at her local shopping centre to pick up a dress as a gift for her daughter. Along the way, she sees a handbag that her mother had asked her to pick up for her. But she is fairly certain she can get it cheaper at Store B, so she leaves it behind. When she stops at the cash desk, the assistant asks her if she would like to charge the purchase to her Store A card.
‘No, Barclaycard,’ Jane says. The assistant rings up her purchase and Jane and her sister go off into the shopping centre. To Store A marketers, she is invisible. Unless she uses that Store A card, they don’t know what she buys, when she buys it, or how often she buys. Jane knows she is invisible because the mail-shots that she gets from Store A are not targeted to the buying habits of her or her husband. She only becomes visible if she chooses to do so – and Store A simply hasn’t given her a good enough reason. Jane only took a store credit card at Store A because they were offering 10% on the day she was buying her Christmas presents. She paid the account balance in full and has not used it since!
In fact, Jane sees little value in her Store A card. She received a 15% reward voucher when she opened her account, which was nice. But when she purchases anything at Store A, she still uses her ‘Barclaycard’. See Jane walk out of Store B
Now let’s say that Jane heads over to Store B to pick up that handbag for her mother. Jane spends almost as much time and money in Store B as she does in Store A; she likes the store layout and the customer service is always outstanding. When she looks for the handbag, however, she finds that they are out of stock. Jane sees that the bags had been on sale, but the display was now empty.
‘When did these bags go on sale?’ Jane asks the assistant.
‘Yesterday,’ the assistant answers. Don’t you have a Store B card? You should have received advance notice.’
‘You mean that you are penalising me for not having your store card?’ Jane asks. ‘Look, I’m a good customer. I probably spend a couple of thousand pounds a year in this store. But because I don’t use your store card, I get left out. Now I am going to have to walk all the way back to Store A and pick up the handbag there. I feel like I’m invisible to you guys.’ These examples beg a question: are Store A and Store B retailers, or are they card marketers? It’s difficult to succeed simultaneously in both agendas. Card brands have become so powerful that, in order to win the battle of share of wallet, they have been forced to add significant reward value to their cards. As a result, the Card business has developed huge muscle behind a shrinking list of monster brands.
So the rules have changed. Retailers who continue to fight for loyal customers by requiring them to use a store credit card are ignoring reality: many shoppers would rather be invisible than give up their frequent flyer miles or their Nectar points, and many others still prefer to pay with cash and cheques.
Offer a multi-tender loyalty programme, and previously invisible customers will magically reveal themselves, inviting you to engage with them.
