6 best practices of top global retailers: how they create value and customer loyalty
The major and minor leagues of retail
In the retail industry, competition is fierce to gain new customers and retain loyal ones. Successful retailers differentiate themselves from competitors by creating a solid and compelling value proposition. Since consumers evaluate and select retailers based on their own personal criteria, retailers who consistently deliver value to them are the ones who earn their trust and loyalty.
So, which companies are in the major leagues, and what best practices can we learn from them? The National Retail Federation (NRF) and Kantar recently evaluated and ranked the top-performing 50 global retailers with the Top 10 listed below:
Out of left field
Overall, retail sales and profits grew due to changes in shoppers’ needs and routines, according to an NRF study. Companies on the Top 10 list encompass the highest revenues in the industry as they have learned to pivot and cover their bases when overcoming challenges such as:
- Covid-19 and the impact of the pandemic is essentially over, but some markets like China remain impacted by new variants and outbreaks.
- Digital sales have exploded and remain elevated even after customers have returned to shopping in brick-and-mortar stores.
- Labor shortages continue to be a major concern across industry sub-segments.
- Supply chain issues have improved, but many are now dealing with high inflation levels.
How to start batting 1000
Top retailers have made significant and impressive accomplishments toward serving their customers over the last several years. I have identified 6 common retail best practices to keep in mind as you seek to provide value to your customers and differentiate your company:
Top retailers realize pricing is one of their most complex activities. If pricing is done well, it will balance your sales volume with reasonable profitability levels in ways that convey value to your customers. If pricing is done poorly, generally, bad things will happen. Pricing must be monitored and adjusted daily. There are dozens of different pricing strategies to consider for the products, services and locations where you sell. Revenue management solutions can help monitor, model, optimize and execute your B2C and B2B pricing strategies.
Top retailers provide an easy, stress-free, convenient shopping experience across all interaction points. Do you offer BOPIS or same-day delivery? Is your everyday and promotional pricing consistent in-store and online? Is your website easy to use? The list goes on and on.
Exceptional customer service means more than easy product returns and the ability to answer basic questions. Are you personalizing the customer experience based on your customer’s shopping history? Can you resolve customer concerns promptly? Do you have a customer-friendly return policy?
Consumers want products that meet their needs and expectations and expect retailers to stand by the products they sell. Many products are available at many retailers. One way to differentiate is to offer premium or exclusive products unavailable from your competitors. Premium private label brands are good examples that can be better than some national brands, such as Costco’s Kirkland brand..
Everyone knows that customer acquisition costs are high. Rewarding existing customers with special incentives, discounts, exclusive offers, or access to special events will encourage them to become brand advocates. Advocates will visit you more frequently, spend more money, and provide free mentions and positive reviews on social media. Rapidly evolving consumer preferences require more effective analytics and tools to build loyalty.
Full Visibility Across the Distribution Channel
Top retailers invest in technology that enables greater inventory accuracy and visibility. Since consumer purchasing decisions have an upstream impact on distributors and manufacturers, they form strategic relationships with suppliers to create a feedback loop, resulting in the ability to react and adapt to market changes. These companies share opportunities for growth with their distribution channel partners.
Wegman’s hits a home run
As you can see, major league retailers provide a strong value proposition to their loyal customers. Let me close with a personal example. I used to travel frequently to Rochester, New York on business, so I got to know many people there. Everyone seemed to want to talk about how great their local grocery store, Wegman’s, was. I later learned that Wegman’s, a regional grocery store chain with 110 stores, has been listed as a Top 10 grocery chain in the U.S. every year except one since 2003. Wegman’s has a personal connection with a very large and highly loyal base of customers who are brand advocates. It does not get much better than that!