Customer Loyalty

"Getting tired of hearing about Big Data and am ready for Big Insights."

- Justin Honaman, Director of Customer Intelligence, Coca Cola

Customer loyalty is a complex topic and POS and e-commerce systems often provide the data and not the insights. Customer data keeps growing with the sophistication of point-of-service, transactional data, and in e-commerce customer tracks within the website. But insights are not growing as fast. Then the task of converting insights back into analytic driven software is where third parties often enter.

Many stores overlook that emotional engagement is the dominant driver of purchase decisions and brand loyalty rather than price promotions, discounting, social networking, Internet marketing and similar efforts.

"…and if you look at what drives consumer emotional engagement in a category, it’s clear that the rational stuff is but table-stakes. If you don’t have a handle on the emotional side of the purchase and engagement process, you might as well spend your marketing budget on coupons and promotions.”

- Robert Passikoff, President of Brand Keys

Recently I read two pieces on customer loyalty that I want to share because I think each, in its own way, provides college stores with new understandings about possible future actions and investment toward customer intimacy.

First is this one by Kristine Jacobs, VP Customer Success at 500friends

This is a good guide to strategy and tactics, the why and how of actions identified to produce results. It is available for free, if you consider giving your contact information to a marketing company free.

Second is The Power of Emotional Connections by Joe Skorupa at RIS.  As Joe notes, "The customer has the power to control the shopping experience today, but the retailer has the power to control the data."

And I will end with this from the 17th annual 2013Brand Keys Customer Loyalty Engagement Index®:

Brands with highest levels of consumer engagement in their respective categories, based on emotional engagement strength achieved versus a consumer-generated, category-specific Ideal, calculated to be 100 percent:

· Airline: US Airways (85 percent)

· Athletic Footwear: Sketchers (86 percent)

· Automotive: Ford/Hyundai (93 percent)

· Bank: JP Morgan Chase (79 percent)

· Beer (Light): Coors Light (89 percent)

· Beer (Regular): Coors/Sam Adams (90 percent)

· Breakfast Cereal: Cheerios (91 percent)

· Car Insurance: State Farm (82 percent)

· Car Rental: Avis (92 percent)

· Casual Dining: Applebee’s (82 percent)

· Coffee; Dunkin’ Donuts (90 percent)

· Computer (Laptops): Samsung (91 percent)

· Cosmetics (Luxury): Clinique (93 percent)

· Credit Card; Discover (94 percent)

· Diapers: Pampers (95 percent)

· E-Readers: Kindle (92 percent)

· Evening News Shows: ABC (97 percent)

· Flat Screen TV: Samsung (88 percent)

· Gasoline: Shell (89 percent)

· Hotel (Luxury); Inter-Continental (82 percent)

· Hotel (Upscale): Hilton/Marriott (81 percent)

· Hotel (Midscale): Best Western (86 percent)

· Hotel (Economy): Days Inn (88 percent)

· Insurance: New York Life (81 percent)

· Major League Gaming: Call of Duty – Modern Warfare (93 percent)

· Major League Sports: National Football League (86 percent)

· MFP Office Copier: Canon/Konica Minolta (81 percent)

· Morning News Show: Good Morning, America (ABC) (94 percent)

· Mutual Funds: American Funds (79 percent)

· Natural Food Stores: Whole Foods (93 percent)

· Online Brokerage: Fidelity.com (85 percent)

· Online Retailers: Amazon (96 percent)

· Online Travel Sites: Expedia (88 percent)

· Packaged Coffee: Dunkin’ (95 percent)

· Parcel Delivery: UPS (87 percent)

· Pet Food (Canned) for Cats: Fancy Feast (93 percent)

· Pet Food (Canned) for Dogs: Cesar (94 percent)

· Pizza: Domino’s (84 percent)

· Printers: Canon (88 percent)

· Quick-Serve Restaurants: Subway (95 percent)

· Retail Store (Apparel): J. Crew (82 percent)

· Retail Store (Department): Kohl’s (80 percent)

· Retail Store (Discount): Walmart (89 percent)

· Retail Store (Home Improvement): Home Depot (90 percent)

· Retail Store (Sporting/Recreational Goods): Dick’s (83 percent)

· Search Engine: Google (85 percent)

· Smartphones: Samsung (87 percent)

· Social Networking Sites: Facebook (88 percent)

· Soft Drinks (Diet): Diet Coke (89 percent)

· Soft Drink (Regular): Coke (90 percent)

· Tablets: Amazon (92 percent)

· Toothpaste: Colgate (94 percent)

· Vodka: Grey Goose (91 percent)

· Wireless Phone Service: AT&T (87 percent)

From Stacy Waymire, ICBA Executive Director

A Year in Review 2012

What a year! So much has happened and been accomplished since Sanibel Harbor, Florida last February. And, it all started weeks after the annual meeting. Mehmet Samiratedu left Georgia Southern, and therefore departed from the Board. Arlyn Schaufler who was already serving a two-year term was appointed to fulfill the remaining years of Mehmet’s term.

Planning for 2012 began with the filing of board committees and the creation of a few new ones to help get things done this year. ICBA has three Board Committees prescribed by our by-laws: the Annual Meeting and Education Committee (David Kent, chair) develops and executes ICBA education strategy for the annual Conference, online webinars, video and other forms of content delivery; the Program Committee (Bob Crabb, chair) actively participates in the programs and services offered to members; and the Membership Committee (Debby Shively, chair) is responsible for communications to members. The Membership Committee also develops programs to help new members understand ownership advantages and obligations.

ICBA committees focused their attention on our strategic goals set during the Board’s summer retreat. Here are a few of the projects and accomplishments for 2012 (committee chairs are stated in parentheses)

• Creation of a group of non-directors discussing and strategizing on the challenges and opportunities faced by campus stores and ICBA – Future Focus Group (Rita Phillips)
• Partnering with KPMG to develop an  improved Operating Survey - Operating Survey Committee (Jeff Zeilenga)
• Co-locate Large Store Group (LSG) with ICBA in 2014 (New Orleans) and 2015 (locationTBA) – Executive Board (Chuck Kissel)
• Create and offer new Canadian membership – Membership Committee (Debby Shively)
• Focus on out-of-industry POS/system solutions – Technology Solutions Committee (Jeff Nelson)
• Creation of a Employee Policy and Procedures Manual for ICBA – Human Resources Committee (Chuck Kissel)
• Explore Business Encounter and POS Dialogue options – Annual Meeting and Education Committee (David Kent)

In November, the ICBA President and CFO visited the Ashland office to meet with the ICBA staff and review internal policies and procedures. Thanks to the dedication and effort of the IBCA staff, ICBA has successfully transitioned its accounting and payroll functions from the University of Oregon Duck Store to Moss Adams, Inc. and Payroll Solutions, Inc., respectively. A special “thank you” to all at the University of Oregon for providing support to ICBA over the years.

Well, it remains hard to believe but there are just days left until the Annual Conference in Bellevue, WA. See everyone soon in Bellevue!

From Chuck Kissel, ICBA Board President

Why Pricing is the Hottest Topic in Retail - Insight from NRF SmartBrief

As most retailers know, three factors will determine success or failure: is it the right product, is it the right time, and is it the right price? The following article was in the December 12th edition of the National Retail Federation SmartBrief:

Why pricing is the hottest topic in retail

Pricing has become a hot topic in the retail world, as merchants seek to strike the right balance between price and value, writes First Insight founder Greg Petro. He explores the pros and cons of several different pricing models, from Apple's "take it or leave it" model to Costco's volume-based approach. Forbes (12/11)

As we know, pricing on textbooks is not like it was 5-10 years ago. Stores are having to be more flexible and competitive to maintain their market share. And as for general merchandise, are you simply keystoning prices, or as the article states, looking at “full consumer value?” Take a moment to read this article to see if you may be leaving money on the table based on your current pricing strategy. This is the first of a three-part series and we will share future posts with you, too.

If you would like to receive a daily NRF SmartBrief newsletter, you can sign up at http://www.smartbrief.com/nrf/.  It’s free and often contains some great retailing news, information and ideas.

Happy Reading!

Shared by Marty Duncan, ICBA Program Manager

Digital Content Opportunities

Digital Content Opportunities

It isn't often that I find a published article that fairly and comprehensively covers a subject, but a recently published article in EDUCAUSE Review about digital content is one that is well worth reading.  Although the orientation is understandably towards technology, many stakeholder perspectives are represented.

Here are some highlights which I think are worth consideration:

1.  Course Materials Committees — although the focus is exclusively on e-content, the importance of establishing a "Course Materials Committee" is reflected throughout the article — engaging students, faculty, library, IT accessibility, and business professionals in an open dialogue.  Many campuses have done this and I recommend the group not limit the discussion to e-content, but include textbook affordability and other course material and content alternatives.

2.  Varied Options & Partners — repeated in many ways is the need to test the waters with a variety of pilot programs, various content platforms, and different business models.  College bookstores have been engaged in digital content initiatives since at least 2005 and continue to seek new alternatives including the Campus e-Bookstore digital content platform.  Campus CIOs have also been actively engaged in the process, as evidenced by the Internet2 pilot programs.  But the campus libraries also need to be engaged in one, coordinated discussion in the context of the e-resources they provide.

3.  Assessment of Success — assessing the results of pilot programs is important to determine the most successful options for students and faculty in terms of learning outcomes as well as affordability, but there are also enrollment management implications when considering the metadata that may be available with e-content.  Data collected about how the e-content is used can indicate to an instructor when a student is not using the materials or otherwise challenged.

4.  Institutional Collaboration — the opportunity to form partnerships with other institutions of higher education on e-content programs will not only help satisfy central system directives to collaborate with other schools as a way to save costs.  It also has the potential to pool resources and expertise while leveraging buying power that can help to reduce costs for the institutions and their students.

The full article can be accessed at the following link:

http://www.educause.edu/ero/article/e-content-opportunity-and-risk

Enjoy this article and consider how your bookstore is engaging with the many stakeholders to this important discussion about improving learning outcomes, textbook affordability, and ultimately — student success.

Written by Guest Blogger, Jeff Nelson, Director, Bowling Green State University

University of Missouri Bookstores Open The Mizzou Store

The University of Missouri Bookstores opened a new store in Chesterfield, Mo., on August 29th, 2012!  In the three weeks since it opened, the Mizzou Store has exceeded our expectations, both in terms of customer feedback and in store sales.   Just 104 miles east of Columbia, Mo., Chesterfield is a thriving suburb of St. Louis.  Almost twenty percent of Mizzou’s worldwide alumni live in the greater St. Louis area and they are an extremely loyal and engaged fan base.  Given the excitement surrounding Mizzou’s recent move to the Southeastern Conference, it only made sense for the University Bookstores to seize an opportunity to take the Mizzou brand to an enthusiastic community.

From the start, our goal was to create a retail environment that brought a uniquely Mizzou experience to our shoppers.   As customers enter the 4,000 sq. ft. store, they step onto a custom tile floor that recreates the green turf of Faurot Field at Memorial Stadium, replete with yard lines and the SEC logo.  A life size statue of Truman the Tiger, Mizzou’s mascot, waves a greeting to all who enter. To the left, leaning goal posts and a set of bleachers with mannequins remind fans of some of Mizzou’s most exciting victories.  To the right stands a replica of six Columns, reminders of Mizzou’s enduring legacy.  “Mizzou Mecca!” cried one customer when she saw many of the iconic images in the store, including an actual school bus painted in Tiger stripes!

There is plenty of Mizzori merchandise among the many iconic images. Whether it is outfitting a newborn or supplying tailgate flags, official SEC button-downs or a set of Mizzou embellished wine glasses, the Mizzou Store promises a wide variety of merchandise to appeal to Mizzou fans and alumni at all stages of their life.  We want to reignite school spirit and fan passion by recreating the Mizzou experience.

The Mizzou Store is a prototype for the University Bookstores.  Given the success of our shared service model on the four campuses throughout the University of Missouri System, we feel that this “fan store” model could be replicated throughout the state.   Mizzou excitement is at an all-time high and we intend to monitor the performance of the Mizzou Store in St. Louis to gauge our next steps.  In the short term, a series of grand opening events are scheduled as a lead-in to Homecoming festivities in October.

We welcome our ICBA colleagues to stop in if you are flying through St. Louis and visit the Mizzou Store! 

Written by Guest Blogger, Dr. Jeff Zeilenga, Assistant Vice Chancellor of Student Affairs, University of Missouri 

ECRM Levin Consulting Electronics Retail Summit

ECRM Levin Consulting Electronics Retail Summit

What’s Trending in Technology Products

I attended the ECRM Levin Consulting Electronics Retail Summit August 13-15, and learned some interesting facts about where technology product sales are headed for 2012-2013. There are some exciting opportunities for collegiate retailers ahead!

The event started off with a general session titled: “Exploiting Niche Opportunities in a Stagnant Market,” presented by Stephen Baker, Vice President, Industry Analysis at the NPD Group (www.npd.com). Mr. Baker talked about the electronics industry as a whole. His analysis showed that overall industry volumes will be flat to negative for the year. Not a good sign. However, it’s no surprise that Apple is driving the industry. While Q2 2012 Year-over-Year revenue results from Apple were almost flat, the previous four quarters showed 12%-36% growth over the previous year. All other electronic products were down 3%-9% during this same period. Apple seems to be keeping the industry afloat.

Mr. Baker recommends that retailers should follow the big opportunities—PC’s, tablets and smartphones. PC’s and tablets are a core product in your college store mix, and ICBA is working to add smartphones to our programs. These three categories account for about 38% of the total electronics sales in the industry.

As you most likely know, tablets outsold notebook computers over the past few months. Mr. Baker stated that notebook/netbook purchasers were slightly more likely than desktop purchasers to attach an accessory to their computer purchase. Sales of accessories for these products are on the rise, with cases and screen protectors accounting for about 70% of the total accessory revenues. Several companies at the ECRM/Levin meetings offered new bags and sleeves for laptops and tablets, as well as charging solutions for laptops and tablets. Many of the vendors I met with are also gearing up their inventory of cases, sleeves and charging accessories for the announcement and launch of the Apple iPad mini, expected later this fall. His research also showed that wireless mice were a hot commodity.

Smartphone accessories have seen a 25% increase for 2012. 7 in 10 cell phone purchasers attach an accessory for their phone at the time of purchase or within 6 months. The average cell phone purchase resulted in an additional $30 spent on accessories for the phone, though smartphones generate over three times more accessory spending.

Smartphone retailers (AT&T, Verizon stores) are losing out on the majority of aftermarket purchases, as four-in-five purchasers say they returned to a different retailer to make their aftermarket accessory purchase. That is great news for collegiate retailers. Cell phone cases, earbuds with in-line mics and charging solutions should be staples in your department. Cell phone cases are more of a fashion statement than functional, so buyers are apt to purchase more than one for their phone.

All of the vendors I met with are gearing up for the new Apple iPhone 5, scheduled to be announced in mid-September and ready for sale a few weeks later. Rumors are that the new phone will boast a bigger screen and could possibly be slightly thinner. There is also a rumor that Apple is dropping its 30-pin connector in favor of a different configuration. All of this means that there is plenty of opportunity to stock and sell new accessories for the iPhone 5—cases, battery cases, chargers, etc.

Finally, audio remains important but the growth segments are designed to make it more portable (and less device centric). While headphones and earbuds still remain strong, streaming audio speakers or Bluetooth speakers will also see continued growth in the market, experiencing a 280% growth in the past year.

Bluetooth speakers range in price from about $50 to $200 and now produce some awesome sound in a small package. It is important that you have a display unit out so that your customer can sync their device and listen to their own music. That is the best way to sell a system.

I am working with many of the companies I met at the ECRM/Levin Consulting Electronics Retail Summit to bring their products to our member stores, either direct or through key distributors who serve our channel. Look for the announcements about these new programs and take advantage of what these vendors have to offer. There are opportunities for growth in your store’s electronics/technology department with new product constantly hitting the market.

Blogged by Marty Duncan, ICBA Program Manager

Shopping the LA Fashion District!

Women’s fashion merchandise is an emerging category for many collegiate retailers today. In response to this opportunity, ICBA developed a buying program in May 2011 with ApparelOffPrice.com, a company that focuses on your particular market to find current fashion apparel and accessories at 20 to 60% below wholesale. ApparelOffPrice emails the buyers a catalog of current styles, available for at once shipping, 2-3 times per week.

ApparelOffPrice.com was started by Bob Libby, a fashion industry veteran in Los Angeles, who also started The Insiders Buying Office. At The Insiders Buying Office, Bob and his staff take buyers directly to major manufacturers, contractors and jobbers in Los Angeles to shop for Junior and Contemporary Apparel. Buyers pick from the racks the most current styles of clothing in all categories: Junior, Missy Contemporary, Plus Size Women's Clothing and Men's.

On August 7 & 8 I, Marty Duncan, ICBA Program Manager, along with 14 buyers from nine ICBA member stores, traveled to Los Angeles to meet with Bob and his team and shop the LA Fashion District and San Pedro Market. ICBA members who participated were Abby Coan, Auburn University, Laura Anderson and Cari Callahan, Central Washington University, Kristin Bonetati and Lily Lopez, CSU Long Beach, Shandra Van Berkum, Iowa State University, Kelly Morlock and Sarah Castro, San Diego State University, Liz Simpson, University of Kansas, Amanda Butler and Cristy Phelps, University of Missouri, Diane Wirth, University of Oregon, and Pam Loignon and Richard Karlinsky, University of Wisconsin Milwaukee.

The group met with and viewed lines from 12 different sources. Items included sweaters, jackets, leggings, basic & fashion tees, blouses, dresses and more. We also visited one of the largest accessories showroom in the San Pedro Market and the buyers walked away with jewelry, handbags, scarfs, hats and even some display fixtures.

Most of what was purchased was for immediate delivery, so many of the items will be in the stores for Fall 2012 Rush sales.

Kelly Morlock, San Diego State University, commented: “Bob was great; he got great pricing, had a variety of things to see, and I loved that there was no pressure. The fashion was all current and on point, and I liked that he listened to our needs. I truly enjoyed spending time with other (ICBA) stores, listening and seeing what they have done that works and what doesn’t.”

We finished the two days of buying with a trip to the University of Southern California Bookstore, where they have a spacious fashion department on their lower level that features both men’s and women’s fashions and accessories. Natasha Kuzmanovic, Senior Apparel Buyer, gave us a quick tour of her department.

Kristin Bonetati, CSU Long Beach, summed up her experience by saying: “The group of buyers was awesome! We learned so much from talking to them and hearing what they do and how they display.  It was really collaborative. We really liked the trip to USC at the end.  It not only gave us a chance to see how the product could be displayed at its best, but also some really great product and merchandising ideas.”

ICBA will be planning future trips to Los Angeles to meet with The Insiders Buying Office and shop the Fashion District and San Pedro Market. Please contact Marty Duncan, ICBA Program Manager at MartyDuncan@ICBAinc.com if you are interested in joining the group. Actual dates have not been set, but the plan is to go in early November 2012 and late July 2013.

In the meantime, I encourage you to join the ICBA Fashion Group Facebook page and follow the successes of these schools and others and see how they are selling fashion merchandise and accessories. Simply search for “ICBA Fashion Group” on Facebook and request to join. This is a private Facebook site and the postings and discussions are limited to ICBA member stores only.

At ICBA, we are committed to bringing our stores the latest fashion styles and prices that help them expand their own fashion departments and increase their profits.

Contact ICBA for more information, 800.888.9222 and Insiders Buying Office at sales@appareloffprice.com

Blogged by Marty Duncan, ICBA Program Manager