Inventrak Blog

The retail cloud and Small and Mid sized business

Tag >> Customer Experience Optimization
Jan 18
2010

Trend Shopping

Posted by Donna Tang in Customer Experience Optimization
Donna Tang
“Trend shopping” is hot in e-commerce. An increasing number of online stores are beginning to offer trend shopping experiences such as “Customers Who Bought This Item Also Bought” and “Best Sellers”. Amazon was one of the earliest adopter of trend shopping. They shared that 35% of their sales came from it.

However, currently, few physical stores offer trend shopping experiences to their customers.  With the same real time tracking technology, physical stores are capable of providing trend shopping experiences. Kiosk can be a good tool to provide such a shopping experience. Some retail giants have already taken advantage of kiosks to enhance their customers’ shopping experience: price checking, self services and online ordering while a product is out of stock in the physical store.  Now, they can also use kiosks to do more: tell their customers what products are hot.

In summary, providing “trend shopping” is a good opportunity to optimize your customer’s experience and increase sales which can create a win-win situation for you and your customers.
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Sep 23
2009

Increase Customer Retention: Customer Segmentation

Posted by Donna Tang in Customer-Centric, Customer Experience Optimization
Donna Tang

The top priority for small businesses over the next six months is maintaining current sources of revenue, i.e., keeping their customers, according to American Express Open.  Actually, customer retention is a challenge that retailers have been facing for years. Moreover, every customer is so different that it is hard for a retailer with limited resources to create a unique experience for every customer. This is why many retailers still rely heavily on pricing competition, even though they know the importance of optimizing the customer’s experience.

A solution: customer segmentation

Currently, the most effective and cost efficient solution for optimizing the customer experience is to group similar customers together, and create experiences that are relevant and work for those segments. This is called customer segmentation. When you segment your customers, you identify groups of customers that have similar needs, wants, and demographics. In response, you create environments, services, price strategies, and product groups especially for the customers in each segment.

A good example: Best Buy

In 2003, Best Buy determined that they should adopt a customer centric strategy instead of sticking with a pricing strategy. They identified their customer groups by learning customer transaction history and asking customers what they would like to see Best Buy offers. They also identified their profitable and unprofitable customer segments. 

 

Their key profitable customer segments are: "Barrys," high-end customers who spend to get the best; "Jills," busy moms who want a kid-friendly store environment and often purchase based on staff recommendations; and "Buzzs," tech-savvy early adopters who enjoy the latest in gadgets, often buying after carefully reviewing specifications.

Then, Best Buy adapted their store environments, products, services and pricing to target each segment.This strategy of Best Buy paid off. The company posted an incredible 85 percent profit gain in its fiscal first quarter of 2005. Best Buy attributed the profit growth partly to this customer segmentation strategy.

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