Business owners in the retail sector often focus their time, energy, and money on attracting new customers. However, to have a successful and thriving business, you need more than that.
In fact, according to customer loyalty statistics, 65% of a company’s business comes from existing customers. That’s why you need a customer retention strategy in the retail sector to maintain relationships with them and boost brand advocacy.
What is customer retention in the retail sector?
Customer retention in the retail sector is the ability to attract and maintain a customer base. Many retailers focus on spending more on advertising to bring in new customers, and although businesses need new customers, it is just as important to continue serving existing customers. Instead of having a customer who makes a one-time purchase, you want customers who come back repeatedly, love and engage with your brand, and refer you to everyone they know.
Customer retention rate gives you a good idea of your business’s health. If your retention rate is high, you know that your marketing strategy is good, your products or services are high quality, you’re targeting the right customers with your messages, and you’re maximizing your profits.
Why do retail store owners need to focus on customer retention?
There is an economic and business formula called the 80-20 rule, or the Pareto principle. The concept is that 80% of the results come from 20% of the inputs. When you think about it in terms of customers, you’ll find that about 80% of your sales come from 20% of your customers.
Free download: Customer retention checklist
Are you struggling with customer retention? This free checklist will help you build awareness of customer retention at all levels of your business. Get your free checklist
You’re almost there: please enter your email below for instant access. Email address Get updates
We’ll also send you updates on new educational guides and success stories from the Shopify newsletter. We hate spam and promise to keep your email address safe. Thanks for downloading. You will receive your free download soon. In the meantime, start building your store with a free 3-day trial from Shopify.
Start
This is why you should pay close attention to your customer retention rate in the retail sector. If you focus on nurturing relationships with your existing customer base and finding more customers who resemble your most loyal customers, you can create a strong foundation that will make your business thrive. Here are some more compelling reasons to focus on customer retention in your retail business.
Costly to acquire new customers
Acquiring a new customer can cost up to five times more than retaining an existing customer. You have about a 60%-70% chance of selling a product to an existing customer while you only have about a 20% chance of selling to a new customer. Retaining customers and loyalty lead to word-of-mouth referrals.
Loyal customers want to share your products and services with their friends and family. Word-of-mouth referrals are very powerful because your customers, who have the trust of their friends and family, vouch for your brand. It’s easier to sell a product to someone who has been referred to you.
Most shoppers do not make a purchase the first time they interact with a business. In fact, there are multiple touchpoints with customers that need to be considered including your website, social media, email, point of sale, and more. Customer touchpoints are the various points of contact consumers engage with from the moment they discover your retail store to the moment of purchase and the relationship you build after the sale. According to Salesforce, half of repeat buyers make a second purchase within 16 days of their first purchase, so staying in touch with existing customers after the sale is the best way to engage them and encourage repeat business.
When
If someone has already purchased from your brand, staying in touch after the sale is the best way to engage with them and encourage repeat business.
Cost-effective marketing
Your customer base is already familiar with your products and services. Instead of using your marketing budget on ads to attract new customers, put some money and effort into retaining your existing customers. Loyalty marketing strategies are cheaper because you don’t have to search for new customers; you already have a list of customer contact information that you can use for retargeting and email marketing and loyalty programs. Loyal customers drive sales.
Implementing a successful customer retention strategy yields a higher return on investment (ROI) than other marketing strategies. In fact, you can increase your profits by at least 25% and even up to 95% just by boosting customer retention rates by 5%. When comparing new customers to existing ones, current customers tend to spend more money and are more likely to purchase new products.
6 Customer retention strategies that can help you sell more, both in-store and online
Now that you understand the importance of customer retention, let’s discuss how to achieve it. Sell more in your store and online using some of these strategies.
1. Create a customer loyalty and referral program
With intense competition, you want to give customers an incentive to come back and shop with you repeatedly.
Loyalty Program
A loyalty program can help bring customers back for future purchases. These types of programs typically issue points to customers for each purchase they make. Customers can redeem their points for free samples, discounts, or free products. Since loyalty programs are based on how much customers spend with your business, they increase the average order value.
Referral Program
A referral program rewards customers who send others to shop with you. According to GWI, 41% of internet users worldwide say that rewards are one of the most important motivators for promoting their favorite brands online.
The Shopify App Store has many referral program apps that make it easy for customers to refer others through mentioning them on social media, personal links, email, text messages, and more.
Customers who fall in love with your brand are encouraged to share it with their loved ones while simultaneously receiving discounts and other rewards, while you gain more customers, increase your brand credibility, and boost sales.
2. Stand for causes
Customers are increasingly engaging with stores that share their values, and we have the data to prove it. According to GWI, 46% of internet users worldwide want brands to be environmentally friendly, 44% want brands to be socially responsible, and 28% want brands to support charities.
For example, if you want to be environmentally friendly, you could donate your proceeds to nonprofits that clean up the environment. You could also use eco-friendly packaging and work to reduce your company’s carbon footprint.
If you want to help in the fight against hunger, you could donate a portion of your profits to organizations that distribute food to those in need.
3. Build a community
When you build a community of customers, it gives people a reason to return to your store. Community events can encourage customers to visit your store or website more often and make additional purchases.
Building
The community builds trust in your brand and connects your customers with each other. You can create a community either at your business’s physical location or online.
Online communities are a great way to reach customers who may not be close to your physical location or to alleviate social distancing measures. You may consider using a platform like Facebook to create a private community group for your customers to interact with each other and with your brand by sharing stories and asking questions.
4. Be Active in Customer Service
Globally, 35% of consumers say that receiving great customer service motivates them to promote their favorite brand online.
Be active in customer service to strengthen relationships with customers. Be proactive by asking for customer feedback, acknowledging any mistakes before customers discover them, creating content that addresses their frequently asked questions, and paying close attention to what customers are saying about your brand online.
5. Continue Building Relationships After the Sale
Let your customers know that you are invested in them by continuing to communicate after every sale. Here are some post-purchase communication suggestions that will strengthen your relationships with customers.
Use Push Notifications
Your relationship with customers begins after checkout. So we built a funnel to a better post-purchase experience to help you increase repeat customer sales earlier. The Shop app provides order status updates and delivery tracking on customers’ phones, and every touchpoint from checkout to delivery is a moment of new discovery.
With push notifications, customers can find recommendations from your store every time they use the Shop app. This means that Shop is always helping you make the next sale before the customer’s last order arrives.
Send Post-Purchase Messages
Once you have your customers’ email addresses, make good use of them through email marketing. The conversation continues after customers leave your store or website and helps reinforce brand loyalty.
According to GWI, sharing useful information is one of the top motivators for brand advocacy — 32% of internet users globally are more likely to promote their favorite brand online when there’s something relevant to their own interests.
You can use post-purchase emails as an opportunity to share useful information about the best way to use the products customers purchased. Continuing communication after the sale is also a great way to cross-sell — inform customers about additional items they may like based on their purchasing behavior.
6. Personalize Messages for Each Shopper
Enhance your relationship with each customer by personalizing their shopping experience. Using Shopify POS, you will get a record of customer purchases, and you can sync that data with your loyalty program. This way, you can know the best products to recommend to customers during post-purchase interactions.
Personalization can be as simple as writing the customer’s name on the fitting room door in a clothing store or including a personal note in the order you send them. Spend one-on-one time with your customers and ask them questions to understand their preferences and increase customer satisfaction.
6 Ways to Develop a Loyal Local Customer Base for Your Store
65% of consumers say they support small businesses. But how can you compete in today’s marketplace filled with giant e-commerce stores? A loyal local customer base will help you build a strong business.
Here are some tips to help you develop a local fanbase that will keep coming back to buy from you.
1. Provide Your Customers with a Seamless Experience from Online Shopping to In-Store Shopping
You can
Brick-and-mortar stores are adapting to the era of e-commerce by creating a multi-channel shopping experience. Give customers the option to shop and purchase through various channels, including in-store and online.
Here are some suggestions on how to achieve a multi-channel shopping experience:
Offer Buy Online, Pick Up In-Store (BOPIS) Services
This new phenomenon for order fulfillment may also be known as click and collect or curbside pickup. BOPIS has gained immense popularity among customers, especially during the pandemic. When customers can buy online and pick up items in the store, it allows them to save on shipping costs, avoid long delivery times, and easily return items.
Sell on Social Media
Globally, around half of internet users say they use social media networks when looking for more information about a brand or business.
You may have heard of social commerce or shopping via social media before. It allows customers to make purchases directly through social media platforms.
In fact, Facebook, Instagram, and TikTok are the most popular social media apps that allow brands to sell directly through their platforms. Research by GWI shows that 25% of Instagram users, 22% of Facebook users, and 22% of TikTok users clicked on a promoted post or ad in the last month.
Allow Customers to Buy In-Store and Ship to Home
Globally, 28% of consumers say that next-day delivery would increase the likelihood of purchasing a product when shopping online. Why not apply these insights to your in-store order fulfillment strategy?
Local delivery provides customers with a convenient way to purchase items they are looking for that are not available at your location. You can ship stock from your warehouse or another store location to someone shopping at your store. This is a great solution if you have a showroom (or a virtual showroom) or offer customizable products.
Simplify Customer Service Across All Channels
Adults in the U.S. now spend nearly 16 hours per day online. This is up from the pre-pandemic record of 12:24 hours a day, which is already a very high number.
With increased online time, people expect more from businesses, including a seamless customer support experience across all platforms.
Customer success is about building a lasting relationship with your customers. Provide a continuous customer service experience through email, phone, live chat, social media, on your website, and in-store.
For example, if a customer leaves a comment on one of your Instagram posts asking for more information about your products, respond directly in the comments section or send them a direct message to answer their questions.
In your direct message, you can also provide your business email address and let them know they can email you if that is easier for them.
On your website, live chat is a great way to engage with site visitors while they browse.
Live chat is also useful for customers who want to buy online and pick up in-store. You will be available to quickly answer questions while they shop online, which can improve customer experiences and conversion rates.
Utilize all the customer service strategies mentioned above to increase brand loyalty, enhance repeat business, and encourage referrals from customers.
2. Offer Services That Add Value to Your Products
Do not
Customers are not only looking for a purchase process, but they are looking for an experience that makes their lives easier. You can offer services that add value to your products to improve your customers’ lives and enhance their relationship with your brand. Some of the services that add value to products include:
- Personal shopping. No one knows your products better than you. Personal shopping can happen in your physical store (using masks and social distancing for safety during COVID) or through virtual appointments. Online, you can survey shoppers about their preferences and send them product recommendations.
- Subscription boxes. Subscription boxes allow you to curate experiences for your customers and select products they may not choose themselves. They also encourage repeat and regular purchases.
- Free gifts with purchase. Everyone loves to receive a little gift with their purchase. Show your customers you care by adding a gift with their purchase and offer them a new product they will want to buy again when they return to your store.
3. Use data to understand your customers
Today, you can analyze more data about your customers than ever before. Use customer information to personalize your services by understanding your customers’ shopping behavior, what they like and dislike. You can use data collected online to inform your practices in your physical location to help improve your online marketing strategies, and vice versa to assist in achieving your online marketing strategies.
4. Provide a shopping experience instead of a purchase process
Customers are looking for more than just a product to place in their home. They are looking for a shopping experience. Be creative in customer service to create a unique shopping experience.
For example, you can offer tailored services if you have a clothing business. This can help take the guesswork out of fashion for busy customers. Think about how you can make your customers’ lives easier when presenting products and services, and integrate those solutions into your customer retention strategy.
5. Creatively leverage technology
There are many technologies you can creatively use to help build a loyal, local customer base. You can create a seamless and enhanced experience between online shopping and in your physical store using applications. The Shopify app store has over 2000 apps to choose from to create a consistent brand experience.
Shopcodes is one of the favorite apps for Shopify merchants. This free app creates QR codes that direct customers straight to products in your online store. With this app, customers can skip the checkout line and purchase items by browsing the displays, speeding up sales in areas where inventory space is limited.
Another popular app among merchants is Experiences. This app allows you to host classes, tours, or events at your physical location through your Shopify online store. Once customers are in your store, they can check in or book new experiences through your Shopify POS app.
6. Exceed expectations
Globally, 44% of internet users say they want brands to listen to customer feedback. When you focus on making your customers happy, the natural result will be brand loyalty and customer retention.
If you take your customers seriously, integrate their feedback into your business, and provide excellent customer care at all touchpoints, you are likely to have good customer retention rates.
Continuing to implement customer retention strategies in retail
Now that you have some strong strategies for retaining your customers, it’s time to move forward with your customer retention plan. Shopify supports multichannel selling, giving you all the tools you need to grow your business and retain customers in one place. Start turning one-time buyers into loyal brand advocates.
Inquiries
The Myth of Customer Retention in the Retail Sector
What is a Good Customer Retention Rate for the Retail Sector?
Source: https://www.shopify.com/retail/customer-retention-retail
Source: https://www.shopify.com/retail/customer-retention-retail
“`css
}@media screen and (max-width: 480px) {
.lwrp.link-whisper-related-posts{
}
.lwrp .lwrp-title{
}.lwrp .lwrp-description{
}
.lwrp .lwrp-list-multi-container{
flex-direction: column;
}
.lwrp .lwrp-list-multi-container ul.lwrp-list{
margin-top: 0px;
margin-bottom: 0px;
padding-top: 0px;
padding-bottom: 0px;
}
.lwrp .lwrp-list-double,
.lwrp .lwrp-list-triple{
width: 100%;
}
.lwrp .lwrp-list-row-container{
justify-content: initial;
flex-direction: column;
}
.lwrp .lwrp-list-row-container .lwrp-list-item{
width: 100%;
}
.lwrp .lwrp-list-item:not(.lwrp-no-posts-message-item){
“`
“`html
}
.lwrp .lwrp-list-item .lwrp-list-link .lwrp-list-link-title-text,
.lwrp .lwrp-list-item .lwrp-list-no-posts-message{
};
}
“`
Leave a Reply