Irrational Loyalty: How Physical Stores Are Retailers’ Secret Weapon

The holidays can set the tone for lifetime relationships and combat the Amazon Effect
By Deb Gabor ,

This National Retail Federation expects 2017 holiday shopping to rise 3.6 percent to a whopping $655.8 billion in the U.S., with roughly 70 percent of consumers saying they’ll shop in a physical store. More than half of shoppers (55 percent) indicate they’ll go to a physical store location to shop, making the holiday season a critical time for brick-and-mortar retailers.

Few retail categories remain untouched by the Amazon Effect. Consumer electronics retailers have been hit especially hard by Amazon’s, search footprint (an estimated 55 percent of product searches originate on Amazon), extensive selection and deep discounts. But even Amazon recognizes the benefits of having a physical retail space. That’s likely some of the reasoning behind the company’s purchase of Whole Foods Market earlier this year and its partnerships with other traditional retailers like Kohl’s to sell Amazon gadgets.

While these are bold moves on Amazon’s part, the e-commerce site lags physical retail in its ability to inspire long-term brand loyalty at a time when shoppers are out en masse in stores. Retailers with physical locations should be breaking their necks with programs to attract customers’ attentions this time of year.

The lure of e-commerce for retailers is its ability to increase sales and profits faster and sell merchandise in any part of the world without additional real estate expense. The ability to gather and mine customer data to dial-in merchandising and sales strategies is also attractive. But physical retail stores have the ability to inspire brand loyalty in ways online retailers can’t.

Some products just don’t sell themselves. Online retailing requires brands to rely upon customer reviews, photography and videos to convey products’ benefits. That works: to a point. Customers can go into a store and immerse themselves in 360-degree brand experiences that engage all their senses. They can hold products in their hands, see them in action and ultimately picture themselves using those products to elevate their own self-concepts. Where customers have those experiences are as important as the products they buy.

Think of a consumer electronics store’s brand as a magnet that attracts customers who share beliefs and values similar to the company’s. Customers shop at particular stores, not only because of convenience or because they can get the best prices, but because they like what shopping at a particular store says about them. Shopping at a favorite retailer can drive a deep attraction between the customer and retailer. When retailers capitalize on this bond, they can create a condition called “irrational loyalty,” a phenomenon in which a customer is so deeply bonded to a brand that they would feel they were cheating on it were they to choose an alternative. That’s why where consumers shop is as important as what they buy during the holidays — and all year round.

Physical stores can accelerate irrational loyalty, and the holiday season is an opportune time for them to proactively set the tone for lifetime relationships. Retailers that are poised to succeed this holiday season do many of the following things:

  1. They elevate the customer experience: Target and other retailers are adapting to pressure from online sales by offering experiences shoppers just can’t get online. That includes introducing exclusive products and anointing associates as expert shopping assistants with deep category knowledge and experience to help customers feel more confident in their in-store product purchases.

  2. They inspire customers online before they go to stores: Sixty-seven percent of customers say they will research products online before buying. That means that online channels are the first touchpoint for most shoppers. Retailers must make good first impressions online with advanced product search capabilities, informative and relevant product descriptions, photography and customer reviews. Electronics retailers that list in-store product availability and allow customers to make online reservations can get an extra boost by bringing more customers into the store to experience the products in-person. Once in the store, they dazzle customers with immersive product displays and experiences that may entice them to buy more than they came for.

  3. They create reasons beyond discounts and deals on consumer electronics to get customers into their stores. Best Buy is expanding their view of role they play in their customers lives to being more than just a retailer of gadgets, appliances, movies and games. This holiday season they’ve assumed the role of a “destination for entertainment,” which gives them license to sell toys, a category in which they hadn’t previously gone deep. This category extension may encroach on mass-retail competitors like Walmart and Target, but smartly it sets Best Buy up to capture more of their customers’ overall holiday shopping budgets.

  4.  They embrace omnishoppers. According to 2016 research by Deloitte, digital interactions influence 56 cents of every dollar spent in a store. Most of that digital activity is consumed by looking up product information, comparing prices and downloading coupons (in that order.) The brands that stand out have mobile apps chock-full of detailed product information, images and user content, combined with accurate in-store information and knowledgeable staff able to handle inquiries from well-informed consumers.

While the industry is abuzz about Black Friday and Cyber Monday, smart retail brands will harness the power of increased shopper traffic in their stores to establish strong brand relationships that will extend long beyond that last customer return.

Deb Gabor is the founder of Sol Marketing, a firm that’s led brand strategy engagement for such companies as Dell, Microsoft, NBC Universal, Allrecipes, Cheezburger, HomeAway and RetailMeNot. She’s also the author of Branding is Sex: Get Your Customers Laid and Sell the Hell Out of Anything.

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