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Comment: The recipe for engagement needs to be shaken not stirred says James Breaks of RPA: Group

James Breaks

It used to be so simple in the 20th century. If you had a profitable store you were making a return on your investment (ROI).

Current thinking turns that world view on its head.  The 21st century paradigm asks the traditional profit-only focus to take a back seat and puts customer strategies firmly at the helm. Now, seeking a healthy return on customer engagement (ROE) is of paramount concern. Get that right and everything else falls into place

Of course, the end game should be the same: a profitable brand. But it’s how you get there that counts. Quite rightly, customers now expect to be treated decently, transparently and collaboratively, as a person and not as a number. This fundamental shift in how we expect to engage with retailers has put personalised and emotive relationships at the top of the agenda for the savviest companies on the high street.

As Epsilon CEO Andy Fawley points out, the concept of return on investment came to prominence in the mid-20th century, when marketers entered the age of mass media and needed to understand the impact ads were having on awareness. Sales engagement fits today's complex ecosystem far better, and brands are thinking holistically about customers’ total engagement with their brand.

Engagement now covers almost all forms of interaction, including the physical store environment.  Today’s bricks and mortar store, still more popular than the internet with 85% of shoppers, must be all things to all people: a showroom, a destination, an extension of the brand’s website, a lounge or social space, an information centre and a physical embodiment of the brand. Stores also need to have shock value, to deliver the unexpected through technology and theatre - and, of course, to make a profit.

The smartest retailers have already aligned a host of disciplines to keep people engaged: store design, technology, advertising, promotions, PR, events and social media. The boundaries between these activities have become so blurred its hard to determine where one begins and another ends.

A very few large brands with access to big data and world class marketing teams, such as Burberry, make it all look simple and seamless, launching their own YouTube channel, affording customers a look behind the scenes of a catwalk show, or front row seats at a James Bay gig.

Understanding how people use social media has led to artful customer engagement activity for the most agile brands. Apple, always in the vanguard of savvy marketing, makes its stores virtual ‘town squares’ where information can be shared and customers can socialize and experience brand and product. Apple is so good at linking the dots that the company’s product launches – press-only events for most companies - are eagerly watched by millions.

In both cases a generous dollop of glamour (the catwalk for Burberry and the black polo necked CEO for Apple) delivers a brand that looks and behaves differently, leading to high levels of engagement. For both brands, being in the vanguard of change means constantly raising the bar for competitors; research shows customers’ last enjoyable retail experience raises their expectations for the next.

However, only a relatively small percentage of brands deliver a decent customer experience. IBM Global Business Services (GBS) surveyed 507 brands across eight market segments in 24 countries, to discover which brands were best at satisfying customer experience expectations. The results showed that retailers need to improve customer experience capabilities: on a scale of 0 to 100, the overall Customer Experience Index average was only 33. In-store experience was the lowest scoring category.

IBM’s study shows that while the the top 25% of high street brands actively seek new ways to improve customer engagement, most retailers lack the agility to create a seamless experience by fusing channels. They have the basic ingredients but have never discovered how to mix the cocktail.

Brands need to confront the challenge to create a seamless experience across all touchpoints, and this should not be seen as one-off project but as an ongoing innovation and renewal effort. The goal - as described by Semaine co-founder Georgina Harding – is that “consumers don’t see channels, they see brands.”

How should analogue brands meet the challenge? The first piece of advice is to make change a way of life. For many stores significant change is accomplished in giant dollops every 5-7 years when stores are re-modelled, after which they plateau until the next refresh. In those intervening years more agile brands are presenting something fresh for customers who are happy to migrate.

Putting brands into constant beta test allows for the evolution of customer needs and desires, creating a framework to be translated into a store at any time. The flexibility and speed needed to keep pace with a brand’s general marketing efforts can be achieved through more modular design, and by making the store more like a research facility which shapes the store of the future.

If you work closely with your customers and reflect what they want from your store you will find that you have arrived at the retail sweet spot: a return on investment and a return on engagement.

 James Breaks is head of design at RPA: Group