Marketing strategies universally need to incorporate mechanisms to attract, upsell, and retain customers. Some companies focus more on one aspect than another but they’re all there somewhere. Loyalty programs are one of the mechanisms used to help with both upselling and retention and this Marketing Dive article takes a close look at some of the changes taking place with retail loyalty programs. Interestingly the article talks about conflicting strategies. Some stores are moving more toward inclusivity and trying to let as many customers join as possible. Others go the opposite direction. Amazon increased the price of Prime membership, Wayfair implemented a $29.99/year fee for their loyalty program, and Lululemon is testing a program that would cost $128/year. The article also talks about how services can impact loyalty as well. For instance, offering same-day delivery increases loyalty for 61% of shoppers. A significant benefit of loyalty programs is detailed information about the customer and their browsing/shopping history. Stores are using that information to try to foster a stronger emotional connection and thereby increase loyalty even further. The article is full of content that could be used for a great in-depth discussion with students debating the merits and drawbacks of different strategies.
This 5 minute news video covers some very interesting pricing strategies employed by Target. Using location awareness, Target will change prices within their app making products more expensive when you walk into the store. The video includes an interview with a University of Minnesota marketing professor who provides his hypothesis for why Target might be using this variable pricing model.
Beyond showing a more sophisticated pricing strategy, this is an opportunity for an ethical discussion with students as well. Is it okay for Target to behave in this manner? When you load the Target app it asks if it can track your location so it can keep track of your favorite store and help you navigate the store. Should they have to disclose that they may change product prices based on your location as well? If they did so, would that make it okay?
Online shopping continues to challenge traditional retailers. Less adaptable retailers like Sears lose the battle and go out of business but others, like Best Buy have found ways to adjust and enhance their value proposition to maintain relevance. The same dynamic is affecting drugstores and Walgreens and CVS are experimenting with added services to keep customers coming in. This CNBC article talks about some of those efforts. CVS is running a pilot with SmileDirectClub to fit people for invisible braces in-store. Walgreens is experimenting with opening a dental office inside a few of their stores. Walgreens is also experimenting with shifting their segmentation focus to double-down on seniors.
Every generation presents new marketing challenges. As consumers flock to online shopping, CoverGirl decided to open their first brick-and-mortar location in Times Square, NY. You can read about the new store and it’s planned opening (Black Friday) in this article. The new store is designed around providing “an experiential beauty playroom”. The new store will be utilizing Google’s artificial intelligence platform, DialogFlow, to power a virtual greeter (Olivia) and augmented reality stations to help shoppers visualize the different options. Of course they will utilize personal sales representatives as well to assist in any areas not covered by their new technological assets.
Will this be a good move for CoverGirl? Should any of their current retail partners feel threatened by CoverGirl’s forward integration?
Brick-and-mortar retailers like Target, Wal-Mart, and Best Buy have been struggling to find ways to stay relevant in the new Amazon age. After trying to make incremental changes to stem losses, these retail giants are now realizing they have to make fundamental changes to their marketing and business strategies if they want to survive. CNN Money recently reviewed Target’s efforts, and results, in this article. After disappointing holiday sales in 2016, Target allocated $7 billion to modify their marketing mix. The article outlines changes made in every one of the 4 P’s and is a great example of how marketers need to consider all aspects of their marketing mix to create an effective marketing strategy.