[00:00:00] Welcome to Unpacking the Digital Shelf, where we explore brand manufacturing in the digital age.
[00:00:16] Hey everyone, Peter Crosby here from the Digital Shelf Institute. Every quarter, the Ecommerce
[00:00:20] Education Consultancy Allume Group consolidates the output of expert conversations, annual reports,
[00:00:27] and the latest data to create their Allume Insider Report or AIR. It's chock-a-block full
[00:00:32] of the most current insights into the present and future of e-commerce. Andrea Lay, founder and
[00:00:37] CEO of Allume Group, rejoins the podcast with the takeaways from Q1 based on their research.
[00:00:44] Welcome back Andrea. It's that time of the quarter again where we dive into consumer and e-commerce
[00:00:50] trends with the Allume Group. We're so delighted to have you back. I'm very excited to be here
[00:00:56] and thanks for having me. No, of course. So just to remind everyone it's your AIR Report,
[00:01:01] Allume Insider Report. And so let's dig in. What was the major theme this edition?
[00:01:08] Yeah. So we come up with our theme each quarter by listening to the manufacturer community,
[00:01:14] attending conferences, following all the reports that come out throughout the course
[00:01:20] of the quarter to kind of predict what's coming for the next quarter. And the theme that came
[00:01:24] out really loud and clear for us for Q2 was brand loyalty. And the idea is that a lot
[00:01:33] of the digital commerce teams that we work with are being asked to do more with less. So
[00:01:40] some of the digital commerce growth is slowing a bit as business settles. As we see continued
[00:01:49] kind of return to store and balancing there. We're still seeing a lot of growth in the channel,
[00:01:54] but I think a lot of digital commerce leaders based on pressure throughout the entire organization
[00:02:02] due to kind of slowing demand in general, they're being asked to reduce some of their staffing,
[00:02:09] to consolidate agencies that they're working with and to really make sure that they're optimized from
[00:02:17] expenditure perspective, including retail media advertising, etc. And so in doing that,
[00:02:25] I think now the idea of shopper loyalty is kind of becoming a part of everyone's jobs,
[00:02:31] where maybe that sole responsibility as Lauren and I were talking about previously used to sit
[00:02:37] with different teams. And loyalty by the way can mean a lot of different things. In this context,
[00:02:42] we're talking about repeat purchase. So shopper loyalty. And it can mean things like coupons
[00:02:48] and subscriptions and shopper marketing membership community, etc., which traditionally has kind
[00:02:53] of lived on an island within an organization. And it's really starting to become part of that
[00:03:00] digital leaders job to think about. And the reason being is, it's cheaper, right? It's cheaper to
[00:03:08] sell more to existing customers as we all know, than it is to go acquire new customers.
[00:03:14] And I think digital leaders have been really singularly focused on transaction and conversion
[00:03:21] online. And the online platforms are optimized for that, of course. We know what that looks like,
[00:03:27] particularly on Amazon. But I think taking a step back to really think about that shopper and how
[00:03:31] do we develop a relationship with them? And how do we drive brand loyalty? So that's been
[00:03:41] top of mind with a lot of our clients. And I would think part of the reason why it's
[00:03:46] becoming everyone's job is that, just like we've learned with acquisition,
[00:03:51] it's wherever a loyalty will be built wherever the consumer shows up and is interested in being open
[00:03:57] to repeat purchases and open to loyalty. And the opportunities for that. And also for introducing
[00:04:03] even beyond kind of the transactional kind of loyalty, introducing a brand loyalty through
[00:04:09] storytelling that is now spread across more and more channels. And particularly,
[00:04:14] I think that's where the e-commerce channels have started to take on more power. Does that
[00:04:19] resonate with you? Does that make sense? Yeah, absolutely, Peter. They don't need to be just
[00:04:23] transactional platforms anymore. The capabilities are changing. The way the shopper is engaging
[00:04:28] with the digital marketplaces is changing. I mean, for example, back in my Amazon days a long time
[00:04:34] ago, we used to look at a metric called time on site. And that was like how long the shopper
[00:04:40] spent browsing before they made a purchase. And generally speaking back then, we thought more time
[00:04:45] on site was a bad thing because it meant they couldn't find what they wanted. We wanted them to be able
[00:04:49] to get in and out and be very transactional about the experience. Well, I don't think that's
[00:04:54] the case anymore for most e-commerce marketplaces. We want to engage the shopper. We want to be
[00:05:00] able to give them content to interact with. Certainly Amazon's not looking at it that way
[00:05:06] anymore as they've been working on more ways to do live streaming and posts. They have influencer
[00:05:12] content on the site and lots of customer reviews to read. They're doing a really good job trying
[00:05:19] to make that more efficient experience for you by summarizing some of that user-generated content
[00:05:24] through AI, et cetera. But I think that the digital platforms have really come a long way
[00:05:30] in being able to engage the shopper. And that's really exciting. And it presents a really cool
[00:05:36] opportunity for consumer brands to engage in that experience and to engage that shopper
[00:05:43] and to create a relationship with them. And to bring back a buzzword from a previous report,
[00:05:49] infotainment is what the shopper is looking for. Exactly. Many of your themes back to
[00:05:55] what we're talking about. So check out that episode. Yeah, exactly. And I think that
[00:06:01] it just to kind of set a little more context, the customer acquisition costs are at an all-time
[00:06:06] high. I mean, they raise, rise every year. I read a report that said they've come up 222%
[00:06:12] since 2013. I don't know if that's true, but it used to be $9 to acquire a customer. Now it's
[00:06:18] closer to 30. Impulse spying is waning. So 48% of consumers say they're doing more research
[00:06:24] before they buy a product this year compared with 32% last year. And then really high brand
[00:06:30] switching. So 34% of global shoppers report brand switching in the last year. And it's
[00:06:34] highest with Gen Z at 47%. And then this stat was what really did it for me. 77% of shoppers say
[00:06:44] they'll buy from competition if it's cheaper or more convenient. So just, you know, a really,
[00:06:49] we've got a really, I don't want to call it a fickle consumer. I don't think they're fickle.
[00:06:54] I do think that in difficult times when groceries and housing and gas and all of our
[00:07:01] basic necessities cost a lot more, you know, folks are just being more choiceful about their
[00:07:08] purchasing. And maybe being, I guess I would characterize it as being a little bit more,
[00:07:13] trying to be more responsible in the choices that they're making. But loyalty is huge and can
[00:07:21] drive an enormous amount. It's a huge opportunity. You can drive an enormous amount of growth for
[00:07:25] a brand. 70% of emotionally engaged consumers spend two times or more on brands they're
[00:07:30] loyal to. And, you know, there's a lot of data that shows that we'll spend more to buy the products
[00:07:39] from brands that we feel really connected to. So I think that the question is like,
[00:07:43] how do you drive that connection? And what does that look like for a brand? Like,
[00:07:47] how do you make the magic happen? Yeah, well, Andrea, I mean, you asked and are answering
[00:07:54] the question. So from a brand side, like, what does that look like? I know you've identified
[00:07:57] a couple of different areas where brands should focus on for loyalty. So let's stick into that.
[00:08:02] Yeah, yeah. So we kind of boil it down into three key areas. The first is make it easy for me.
[00:08:12] The second is connect with me and the third is reward me. And I think one thing that's
[00:08:18] really interesting is even if you feel like you've lost a loyal shopper or some of your
[00:08:23] loyal shoppers, 69% are willing to be one back. And when you ask shoppers what would bring them back
[00:08:30] to their favorite brand, it's more attractive discounts, improved product service quality,
[00:08:36] more products, better customer service is kind of all the things you would expect. So this
[00:08:39] is groundbreaking. I was going to say. Right. Well, I think that this whole report,
[00:08:44] our whole report is not terribly groundbreaking, but it's a good reminder. And it might be
[00:08:48] new information for a lot of folks who don't work on shopper loyalty on a day-to-day basis.
[00:08:55] But I think that is the big takeaway for the report is that this is not rocket science
[00:09:01] and you don't have to have a really fancy loyalty program. It's a lot of basics.
[00:09:07] Well, and to your point, if you're looking around for growth at a lower cost,
[00:09:10] which is what profitability is made of, your existing customers have always been a
[00:09:17] source for that. But as you said, I feel like the pressure to do that, the places that you can look
[00:09:24] for that kind of equation are fewer and fewer. And so you need to get great at the one that
[00:09:30] is standing right there in front of you, I'd imagine. Absolutely. We have an opportunity
[00:09:37] to focus on what's right in front of us for more profitable growth. So, okay, so kicking
[00:09:43] off at the top with Make It Easy for Me, this is about brilliant basics. And 92, and I'm citing a
[00:09:53] few different reports here with some of this data and we'll include that in our, we include a resources
[00:09:59] section in our report that folks, if they want to go read some of these reports in more detail.
[00:10:04] 92% of shoppers say their favorite brand provides consistent experience regardless
[00:10:09] of where they interact with it. That is the top thing that people say.
[00:10:13] Omni channel. Exactly. Meet the shopper where they're at. So that came up really high. And like I said,
[00:10:20] it's not about fancy loyalty programs. Shoppers cite really foundational commerce elements when
[00:10:26] they talk about their favorite brand or their favorite experiences. And it comes down to
[00:10:32] assortment, availability and quality. And those are like the top three factors that they cite
[00:10:37] by far. It's not has a complicated point system where I can earn rewards. It isn't even discounts.
[00:10:44] It's assortment, availability and quality. And it's funny because there was a point a few years ago
[00:10:51] where all the retailers were racing to do like ultra fast delivery. That's when everyone got
[00:10:56] on Instacart and a lot of retailers were trying to compete with Amazon's, you know,
[00:11:02] two hour delivery or one day or same day, whatever things they were doing at the moment.
[00:11:06] And even back then, the data show was totally consistent. Core site had a report that came out
[00:11:11] around the same time that said delivery speed was super low in the list of things that shoppers
[00:11:16] cared about. It was assortment, availability and quality. And these are really the critical
[00:11:23] loyalty drivers. And they sound simple, but they're really hard to get right. I mean,
[00:11:28] it's just like the foundational building blocks of digital commerce, right? Like you have to
[00:11:31] the product has to be in stock, receiving traffic and activity has to be financially viable.
[00:11:38] We have to have the right assortment. And I think even though it sounds easy,
[00:11:43] shoppers report 88% of US shoppers report that online retailers failed to meet their
[00:11:47] expectations in these areas at least one to three times in the last year alone.
[00:11:52] So the shoppers are telling us like these are the things that are important to us
[00:11:56] in order for us to be loyal to retailers and brands. And you're letting us down a lot of the time.
[00:12:02] Yeah. I mean, so much of consistency is predictability. Like, all right, tell me what date
[00:12:09] I'm going to get it. And then I better freaking get it on that date. Yes. Otherwise, don't lie
[00:12:14] to me essentially. But like you said, underneath that, that's super hard. It is still an
[00:12:20] availability is still unreliable. Yeah, right? And it's meeting the shopper where they're at.
[00:12:26] And I think a great example of this is, I don't know how many of you got a chance to see the
[00:12:30] Diane Von Furstenberg pop-up collaboration with Target that they did recently. It actually,
[00:12:36] it just went on sale a couple weeks ago. I went and bought a couple things. But
[00:12:40] it was a great example of just really strong execution and meeting the shopper where they're
[00:12:44] at. They had a great online pop-up storefront where you could easily shop the merchandise. It was very
[00:12:51] clear when the pop-up was going to begin. You could even kind of add things to save for later so that
[00:12:57] when they went on sale, you could go back and buy them. They were clear about availability.
[00:13:01] Availability was also pretty strong throughout the first day of the sale
[00:13:05] and executed really well in store as well. And so I think that consistency across the
[00:13:12] commerce channels for the shopper and meeting them where they're at. I mean,
[00:13:16] I was able to, when it went live, I was able to go online, make my purchase, and I was able to do a
[00:13:23] curbside pickup within an hour of making that purchase. So just really strong
[00:13:28] consistent execution across all the channels in that pop-up. And I think they did a really
[00:13:34] nice job. I think it's a friendly reminder that like, especially when you're in a consumer
[00:13:39] brand and you're just focused on e-commerce in the digital space specifically, there's so many
[00:13:43] things that pop up like AI or like the metaverse at one point in the past. And like all these new
[00:13:48] shiny things that happen and they're great to know about, to know when they're going to become
[00:13:53] more prominent and make sure that you have an understanding of them. But going back to the
[00:13:57] basics of assortment, availability, like those are core parts of the business. And I think
[00:14:02] this can be very helpful to also prioritize where to focus your time because this is what
[00:14:08] the shoppers are looking for. So in an industry where there's so much noise and there's so many
[00:14:13] things you have to stay on top of, like where do you need to double down to make sure that you're
[00:14:17] seeing growth and profitability? The basics. And this is the way to support that.
[00:14:23] Yeah. And it's not a mystery what the shopper wants. I think we get a little nervous sometimes
[00:14:30] with the shopper changing so quickly and every few years there's a new social media platform
[00:14:38] that they're engaging with or a new technology or a new means of discovering product. And all
[00:14:45] of that's important, but I think it really comes down to some of these basic foundational
[00:14:50] elements and meeting the shopper where they're at. And I think another great example is Barbie.
[00:14:55] You know, we saw a lot of Barbie this year everywhere. And we got a chance to hear
[00:15:02] Mattel speak at Shop Talk this year. And the quote that I loved was,
[00:15:08] start with the story and the commerce will follow. And I loved that. And Barbie's another
[00:15:13] great example from a commerce perspective and just from a, you know, with the launch of
[00:15:19] the movie perspective that everywhere you went, you saw it. Like you were, it was sort of a bombardment
[00:15:25] across all channels, right? It was like traditional media and digital media and streaming and social
[00:15:34] media. And I think where you really get an opportunity with that, I mean, we all can't be
[00:15:41] Barbie of course. So that's probably not an excellent example for all the brands listening
[00:15:45] today. To my eternal regret, I can never do that.
[00:15:49] But loyalty can drive fandom and evangelize and encourage shoppers to evangelize for your brand.
[00:15:59] And another great example of that is the Stanley Cup craze this year, right? Like
[00:16:05] TikTok is full of people showing their cupboards with like rainbows of Stanley Cups,
[00:16:11] you know, lining the shelves. And I think that's a great example of you've got this loyal fan base
[00:16:18] that is out there evangelizing for your brand. And that's free marketing. I mean,
[00:16:22] if you can get to that level, that's kind of, that's pretty incredible.
[00:16:27] And Andrea, you had mentioned it earlier, sort of your second dimension
[00:16:32] of it is about make it about me. Forgive me for talking the phrase.
[00:16:38] Thank you. Thank you. Connect with me. And so much of that has to do with the data that you
[00:16:45] should have, could have, should want to have to be able to create something that's more personalized
[00:16:53] for your consumer. What are the things that you're seeing around that opportunity?
[00:16:59] Yeah. So 85% of shoppers say their favorite brand treats them like an individual.
[00:17:04] And 88% say their favorite brand uses their data in ways that make them comfortable. So those are,
[00:17:09] those are kind of two almost like contradictory needs that the shoppers telling us about. So
[00:17:18] they want to be treated like an individual, which then makes us think personalization, AI,
[00:17:23] you know, those types of experiences, but they also want to feel comfortable with
[00:17:30] how their data is being used. So I think this is a little more of like a don't do list.
[00:17:37] So what I mean by that is, don't be creepy. Don't be creepy. Don't be creepy. And personal, you know,
[00:17:45] far reaching personalization can be a trust buster if, you know, if it's done incorrectly or
[00:17:49] irresponsibly. And over half of global shoppers site that they have received irrelevant content
[00:17:55] or offers and dislike ads based on indirect targeting tools. So, you know, like
[00:18:03] indirect meaning, you know, you didn't give the information willingly and now you're being targeted,
[00:18:07] you know, when you're shopping somewhere else. And I mean, there's a whole,
[00:18:11] there's a whole other storyline here around cookies and where that's going and how retailers
[00:18:17] and platforms are going to be thinking about that differently. But this is really just
[00:18:21] about fostering an emotional connection and showing the shopper that you care. This isn't
[00:18:25] about having the most sophisticated AI, you know, to communicate with shoppers or to create the
[00:18:31] creative or whatever it is. And it sounds I think this can sound hard, especially for really big
[00:18:37] brands. But it isn't it's really just about communication. When consumers feel appreciated,
[00:18:44] 88% stay with the brand 83% plan to spend more with the brand and 87% will advocate for the
[00:18:50] brand. So kind of going back to the Stanley Cups, you know, if you feel this connection.
[00:18:55] And so I think this is really about making sure that your shoppers receive up to date
[00:19:01] personalized information consistently. It doesn't need to be, you know, extraordinarily
[00:19:07] personalized. This can look like for retailer or even like a brand that has DTC triggered messages
[00:19:14] for product availability and launches, or that can eat you can even execute that
[00:19:17] through retail media, right on another retailer's platform. Letting your shoppers know when you have
[00:19:22] new product launches and specifically letting the shoppers know that you think it's going to be
[00:19:27] most meaningful to personalized offers and promotions based on previous activity, you
[00:19:32] know, because you looked at this or bought this, we thought you might be interested in this,
[00:19:37] and then just really transparent explanations for how data is being used.
[00:19:41] And this is I think important for brands that have DTC sites in particular.
[00:19:45] And we had a great example here, another shop talk speech that we loved. And by the way,
[00:19:53] shop talk had a whole track on shopper loyalty, building loyalty with your shopper, which I thought
[00:19:59] was really interesting. It's like it was such an important topic for the conference even.
[00:20:05] But there was a brand called Mad Rabbit and it's a tattoo aftercare,
[00:20:10] which I didn't know that was a thing. I wasn't aware. I know. Well, I did learn actually through
[00:20:17] his speech that we are approaching 50% of the population has tattoos. So I didn't know that.
[00:20:22] Oh, wow. Actually, I wanted to go look that up later. I was like,
[00:20:25] that sounds like a lot of people, but I guess you wouldn't know. Like, you know what I mean.
[00:20:28] I hope of the adult population. Right? Well, it was high. It was definitely higher.
[00:20:35] Yes. You never know. Yes. You never know, Peter. I hope so too. That would be weird.
[00:20:45] But it was interesting. He talked about Reddit and it's not the first time that I've heard
[00:20:52] sort of an up and coming brand talk about how they have forged a really strong connection
[00:20:58] and drove driven loyalty with shoppers through Reddit as a forum. But there's a whole
[00:21:02] channel in Reddit called tattoo advice and they're just really active on it. And
[00:21:10] communicating with the shopper and Oliver Zach's the founder, and he said, his quote that I grabbed
[00:21:17] from the conference was, put your followers in the best position to promote your brand.
[00:21:22] You're never too big to have those conversations. Keep as close of a pulse on your consumers
[00:21:27] as possible. And I really liked that because I think that makes it accessible even for big brands.
[00:21:33] You know, you can go and read it and see what shoppers are saying about you. You can learn about
[00:21:37] what they like and don't like about your products. But I think this was a great example of like
[00:21:42] he, they kind of like knew where their community was meeting the shopper where they're at,
[00:21:47] finding ways to connect with them. And they and the top post in tattoo advice is,
[00:21:53] has anyone used Mad Rabbit? And then like tons of, you know, there's almost 200,000 people that
[00:21:59] are in this like subreddit and just like a ton of feedback about the product and just
[00:22:05] a really loyal fan base there. So, you know, really finding ways to connect with the shopper
[00:22:12] and then keeping it simple up to date personalized information about your products.
[00:22:16] And then just being careful with their data, being responsible with their data.
[00:22:21] Don't be creepy. I'm sorry. That's what I think of. I don't want to be
[00:22:25] creeped out when I receive an email or a text message or you looked at this one thing or I
[00:22:29] never gave you that information or why are you texting me six times a day? You know,
[00:22:33] we had an episode about texting and SMS like you just need to it's a very thin line.
[00:22:38] And you have to be very careful around being personalized not being creepy but giving
[00:22:42] the consumer what they want. But the consumer will also tell you when you're not getting
[00:22:46] what you want. So, listen. Well, that's what I appreciate about some of the brands that I
[00:22:51] have given permission to talk to me like that is that every once in a while,
[00:22:57] you know, I can either say I want less of this like giving somebody an opportunity
[00:23:03] to provide feedback in a very simple way. I think is incredibly important, particularly
[00:23:09] when we all know that personalization can only go so far or data only goes so far. And
[00:23:15] so it's always at least for now, it's going to continue to be a little bit of brute force. And so
[00:23:20] offering options for giving your feedback on how you want to be communicate with that doesn't
[00:23:25] necessarily always have to be I'm quitting you because I'm sick of this. There should be a way
[00:23:31] to have that conversation. You know, whether it's is this message work for you or are you
[00:23:37] seeing, you know, is are you hearing from us as much? You know, there's a bunch of ways
[00:23:41] that I've seen it happen that I really appreciate. And then also feeling like me being a loyal customer
[00:23:50] is makes me the most important person. I don't mean a lot of people, but that their current
[00:23:58] customers are as important, if not more important to them than necessarily finding the next one.
[00:24:05] And I really appreciate that, you know, that way of communicating and sort of just tending to the
[00:24:12] relationship. Absolutely. And I love what you just said, Peter, about the binary nature of a lot of
[00:24:18] the communication preferences that we have now. So it's like you're either in or you're out,
[00:24:23] like opt in opt out. And I have seen more retailers and DC sites engage in
[00:24:29] gathering a little bit more about my preferences, communication preferences. So now that we can be
[00:24:35] communicated with over email and text and social and all of these different channels,
[00:24:41] now some we're starting to see opportunities for us to customize even those experiences
[00:24:47] for ourselves, right? Like send me fewer emails or send me emails but not tests or send me push
[00:24:53] notifications but don't send me emails or send me the reverse. And I like the or talk to me
[00:24:59] about these things but not these things. And I love that. I don't think those are things that
[00:25:05] are terribly hard to implement, but they provide a lot of value for the shopper and they still
[00:25:10] they give you an opportunity to continue communicating with them.
[00:25:15] Yeah. And so let's talk a little bit more about the third piece, the reward me where loyalty
[00:25:21] doesn't actually have to be some sort of reward, but what else could it be? And what is the value
[00:25:27] that loyalty can share that can provide? Yes. So 88% of shoppers say their favorite brand
[00:25:33] rewards them for their loyalty. And but what we did learn through the research was that it's
[00:25:39] not all about loyalty programs and points and discounts, a third of shoppers find value in
[00:25:44] receiving exclusive access to products or services. So that's not even any discount driven
[00:25:49] access just plain old, you know, exclusive access. And then a quarter of shoppers find
[00:25:53] value and personalized product or service suggestions. And I loved this quote from one of
[00:25:58] the reports that we relied on for this, for the air this quarter, Trent Lanning, who's a senior
[00:26:05] researcher at Marigold said, if all you focus on is the transaction, then all you'll get
[00:26:10] is a transactional relationship in return. And I love that because I do think that a lot of
[00:26:16] the forms of loyalty building that we've seen so far are like very transactional and discount driven.
[00:26:25] But I think that it's really best if there's an opportunity to offer more than merely financial
[00:26:30] incentives. So really thinking about, you know, what are the other ways that we can engage with
[00:26:37] the shopper and reward them for their loyalty? And a couple of great examples that we saw
[00:26:45] are Lulu Lemon has a really great program. So well, first they did a cool, they will they give
[00:26:53] you like early access to product drops. So that's kind of that exclusive, exclusivity,
[00:26:57] there's not a discount associated with it, but just early access. You can do, they offer some
[00:27:04] Peloton classes and they also in some locations offer free yoga classes in the stores. So,
[00:27:10] you know, just by like being a patron, you don't even have to be a member of anything
[00:27:14] just by being a patron of their stores and being in the know, you know, you can get some free workout
[00:27:20] classes, which I think is cool. They have a lot of different membership events throughout the year.
[00:27:25] You can, I mean, like most programs, you can return without a receipt because it's logged in their
[00:27:29] system and they do free hemming, which is pretty cool, especially when you consider how much
[00:27:35] the yoga pants costs. But I like that it's kind of a pretty multifaceted program that
[00:27:43] focuses on more than just discounts, it's about a whole experience and a whole ecosystem.
[00:27:49] And most of those things that they're offering don't cost them anything to offer, which I think is
[00:27:54] pretty cool or really low cost, you know, running a couple of yoga classes a week or
[00:27:59] doing the hemming or just giving, you know, orchestrating a means for shoppers to get
[00:28:04] early access. So they do a really nice job. I think Nordstrom does a nice job with their
[00:28:10] loyalty program as well, you know, again, you get early access to the sales, it's access.
[00:28:16] They have some parties throughout the year that, you know, depending on your level of loyalty,
[00:28:21] you get to go to different things. I think I even saw one time that for like the highest
[00:28:25] level of loyalty, which I don't think I'll ever achieve with them, they do like a whole,
[00:28:30] they'll pick you and your friends up in a limo and like take you on this like whole shopping day,
[00:28:37] which sounded totally how much do you have to spend for that? Like way more money than I have,
[00:28:42] Lauren, way more or time. Yeah, or time. I mean, you'd have to like get all your friends to
[00:28:50] shop on your Nordstrom card and like Venmo you did at that level. You know, Andrea, there's
[00:28:55] this, I'm glad we're talking about examples because I was actually this weekend, this perfect
[00:28:58] timing. So pros, it's like a customizable hair care solution. So you can like build your shampoo
[00:29:05] and conditioner and I've been loyal to that brand for years. Like that's what I use as my haircare
[00:29:11] product because I have like super sensitive everything. So I have to be really careful.
[00:29:14] And they came out with a skincare line. And as a member of pros, I got an email and they're
[00:29:20] like, Hey, we're starting our skincare line. Do you want to try free skincare for like your
[00:29:26] first go ahead? Because we're venturing into this space. And they took the preferences that I have
[00:29:32] for my hair, like no sense like paraben free, silicone free, and actually like applied it
[00:29:38] into like a customized skincare routine where I get to actually take a quiz, but it recommends
[00:29:44] based on some of the preferences I already had. So to me, that's like a perfect example of using
[00:29:48] my data in a really great way because I gave you all that data about my haircare. You're
[00:29:53] moving into a new space. It's a skincare cool opportunity for me to try it's free for me.
[00:29:59] And then I can be a part of your subscription if I if I like it. So it was just a really cool
[00:30:04] approach that I've never had from any other company because it was customized to me. They
[00:30:07] used my data in a great way. I got something super valuable. They introduced me into a totally
[00:30:12] new line that they're expanding. And it was just a really cool way of bringing that loyalty
[00:30:17] to the forefront. So I was thinking about that as you were talking because it hit on a lot of
[00:30:22] those elements that we just covered for loyalty. That's an excellent example, Lauren. And really,
[00:30:27] they didn't offer you any discounts or financial incentives at all. They just no they offered you
[00:30:34] some customization in exchange for your data. And now they have your data, which is really
[00:30:39] useful for them. They can use that aggregate in aggregate to develop products for, you know,
[00:30:44] different profiles and things like that. So that that's a that's a really excellent example.
[00:30:50] And I think that's how you get brand advocates, right? Like everyone, we did a program for one of
[00:30:55] the big media companies recently. And they said all of our clients come to us and they want us to
[00:31:00] come up with the next viral marketing campaign. And we had, you know, had a conversation about
[00:31:05] the talk tracker on that, which is that it doesn't start with a viral marketing campaign,
[00:31:08] it starts with an excellent product with a strong brand following. So you have to actually
[00:31:12] focus. And then the viral, you know, marketing is comes is a is an output of that for having
[00:31:19] the right inputs. And people are patient enough for that. They want the magic pill. I want the
[00:31:25] campaign. Yeah, I want the campaign. And but you have to really you have to be driving already
[00:31:30] some organic fandom, you know, to and then you can put your foot on the gas on it. But I think
[00:31:35] that those those building blocks have to those foundation foundational building blocks have
[00:31:39] to be there first. Andrew, I was wondering whether through your client conversations or
[00:31:43] the presentations you saw at Shop Talk or anything, this shift where loyalty is everyone's job.
[00:31:50] Are you seeing either an investment in broader education around what loyalty means and how it
[00:31:57] might? I'm just wondering about sort of the organization or process adjustments that
[00:32:03] that may need to happen for that, for that discipline to spread itself across an organization
[00:32:09] as opposed to just being the responsibility of sharper marketing? I think that's a great
[00:32:13] question, Peter. And the short answer is no. We're all what we're seeing is the, you know,
[00:32:20] e-commerce or digital commerce team, you know, not getting much of a budget increase year on
[00:32:25] year and they're having to figure it out, right? Or or an unwillingness to grow the
[00:32:32] retail media advertising dollar budget significantly for 2024 and then the team has to figure it out.
[00:32:40] So I think it's, I think it's a little bit more of a like an organic effort within some of the
[00:32:47] digital leadership teams that we've seen to try to figure out how do we drive more with less
[00:32:53] and and a lot of that's happening through retail media and targeting and, you know,
[00:32:57] using like Amazon marketing cloud or Luminate or any of the other products out there to try to get
[00:33:03] really honed. You know, I saw, I think I saw something from it was either stratably or intent-wise that,
[00:33:09] you know, now we're approaching, I think it was like 40 percent of brands are participating in
[00:33:16] some of those cloud based programs now to be able to better target their shoppers. So I mean,
[00:33:22] I'm assuming within the organizations they're engaging some of these shopper marketing and
[00:33:26] analytic teams to help with that effort. But I also, I think in some of the basic retail media
[00:33:31] targeting it's expanded enough now that you don't even have to engage those teams. You can just say,
[00:33:36] I want to target people who bought this in the past and that's like an option. It's like
[00:33:39] in the drop down, you know, or I want to target shoppers who've looked at my products in the
[00:33:44] past or so, you know, you can go after some some loyalty objectives right within the
[00:33:53] media advertising consoles for these retailers. And that's really the takeaway. It's like you,
[00:33:59] for ways you want to reward the shopper and in the reward me kind of idea,
[00:34:07] you get what you put into this. So if you're putting, and so thinking about what you want
[00:34:11] to accomplish identifying goals early and tracking against them I think is really key.
[00:34:15] And so this is like if you're trying to use a reward space program to drive engagement,
[00:34:23] then you're going to want to look at engagement metrics. If you're, if you really focus more on
[00:34:27] a transaction, you're going to want to look at transaction metrics. So it's thinking about
[00:34:31] what are you trying to accomplish and going back to that Lulu example, you know, it's
[00:34:35] probably both but a lot of it's on the engagement side. You know, it's did people come in to
[00:34:40] engage with the or go on to the site to engage with the early access option? Are they taking
[00:34:48] the classes? Are they attending the events? You know, those are more like engagement metrics
[00:34:52] as opposed to transaction metrics, which you have to believe will follow. Right. If you have a
[00:34:57] strong, if you have strong engagement and you have a good brand, the transactions will follow.
[00:35:03] Well that's the thing with Lulu Lemmon, I would imagine part of it is what is an experience
[00:35:07] that makes in this economic environment, even though Lulu Lemmon probably targets the,
[00:35:13] you know, upper or shopper, but in this environment makes it worth paying the additional money.
[00:35:20] So yes, if the clothes are great, but all things being equal, you were talking earlier about
[00:35:26] people want to feel sort of responsible with their money. If there's more of that pressure,
[00:35:32] something else, some other halo around it needs to, I would imagine help prop up the design, you know,
[00:35:39] sort of maybe even in some ways intersect that feel that desire for being responsible with your
[00:35:45] money because, but I'm getting these things. I'm getting yoga classes and you know,
[00:35:51] I'm getting early act like that sort of helps to bring them back to like this is worth my money.
[00:35:57] Yeah, it helps them feel responsible to kind of use our word from earlier with their finances. If
[00:36:04] it's not just about the transaction, they're getting a lot of other value out of the experience as
[00:36:08] well that they can place value on those things. Another great example is Claire's.
[00:36:15] They do, if you get your ears pierced there, you can redeem a pair of earrings every month.
[00:36:19] And so that drives like repeat traffic back into the stores. It's a little bit more
[00:36:23] of a transactional program, but as a result they get transactions. And then they always are doing
[00:36:28] like a, I always forget what their deal is. It's like a buy to get one free or buy three,
[00:36:31] get three free or they have a very complicated Bogo structure within their stores.
[00:36:37] And so then you're redeeming that free pair of earrings, but then if you buy something else,
[00:36:41] you end up kind of walking out of there with more than you came for. So
[00:36:46] that's another great example of, they sort of hook you with a service and then
[00:36:53] they're driving a lot of repeat foot traffic. And it's a very transactional program and it
[00:36:56] seems like it performs pretty well for them. I heard they're doing about to do some popups in Target.
[00:37:03] Well, Andrea, thank you so much for bringing us this quarter's air report. Although that makes
[00:37:11] it redundant, isn't it? Because anyway, thanks for giving us air today. You needed to breathe,
[00:37:20] Peter. Oh my God, especially we're recording this one week before our conference starts. So right now
[00:37:26] I'm a little bit short on air, but very much looking forward to it. By the time folks listen
[00:37:31] to this, Andrea will have run a kick-ass panel at the Digital Shelf Summit and we will be,
[00:37:37] we're in advance grateful for that when people actually hear this. So anyway, as always,
[00:37:43] Andrea is very generous. A Loom Group is in sharing the report with the DSI. So when you hear this,
[00:37:50] you can go to the partner section of the DSI website and take a look at the report. And then
[00:37:56] even in some ways an additional value that the brand of a Loom Group provides is all of the
[00:38:01] things that they referenced for you to be able to dig even deeper on the things that you care
[00:38:06] about. So Andrea, thank you so much for providing all of that for our audience.
[00:38:10] Of course. And we do this as a workshop for brands too, so with some customization and
[00:38:15] really thinking about the shopper trends that are impacting them. So that's another way that we
[00:38:20] deliver air is on site with brands. Hands on. Andrea is on LinkedIn or you can always go
[00:38:28] to a Loom Group's website. So thanks, Andrea. Thanks, Peter. Thanks, Lauren. Nice to see you
[00:38:33] guys. Thanks again to Andrea for all the wisdom. Their reports are also available in the
[00:38:37] partner content section under the resources tab on our website, digitalshelfinstitute.org.
[00:38:43] Become a member while you're there. Why don't you? Thanks for being part of our community.