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Retail marketing – where do you start? The retail marketing environment is fast-paced and constantly evolving, and countless new tools are being touted as 'the ultimate solution' to your marketing needs. There is enough information available to study retail marketing for years. But you don't need to!
In this guide, you'll develop an understanding of retail marketing through customer retention and the retention-focused tools that will supercharge your business's success.
But first, let's cover the basics and understand why retail marketing is essential for your business to thrive.
Why retail marketing is essential
There's one element of retail marketing that helps to set it apart—it's geared towards generating repeat customers. Don't get us wrong; acquisition is important, but winning your customers back and generating customer loyalty are where real long-term gains come in! In fact, a loyal customer is as much as 22x more valuable than non-loyal customers.
This is particularly true in today's market where businesses and shoppers alike face economic uncertainty (among a host of other issues).
As Rory Moss, Chief Revenue Officer, puts it, "Consumers are becoming a lot more price sensitive due to inflationary pressures and the cost of living. Health and safety costs are increasing, as are insurance premiums. We've also got newfound cybersecurity concerns, which, I think we can all agree, make this a really tough time for most businesses in the market. Add in big players like Temu, SheIn, and Ali Express — which all have a big focus on price and product — and we're all competing to make profits in what feels like a much tougher market this year."
All this to say that investing in smart marketing initiatives and enhancing customer loyalty is more important than ever. Loyal customers can provide the stability you need to thrive in any market.
Crafting a high-level marketing strategy
Now that we've established the importance of retail marketing, let's discuss how you can set yourself up for success. The first step is to establish a high-level strategy to guide your specific tactics and campaigns.
Be smart about where you spend your marketing dollars
No matter what your marketing budget is, recognize that every dollar counts. As such, you need to ensure that you're spending money on solid, reliable channels that truly drive growth. Don't fall into the trap of chasing the shiny new trend or channel.
"A lot of people at the moment want to generate video content for TikTok and Instagram. Often, they're briefing their agencies to develop these campaigns simply because they see others doing it. However, their customers might not necessarily be on these platforms," says Rory.
"People often disregard Google PPC and Facebook, which still attract a lot of eyeballs. These platforms see daily transactions and offer a lot of reach at a lower cost per click compared to other platforms."
His advice? Focus on the platforms that are currently working for your specific customer profiles. And if a particular channel or platform interests you, it helps to start by testing it first, rather than committing significant resources immediately.
Optimize your marketing for the entire customer journey (not just a single sale)
When crafting your retail marketing approach, it's best to think long-term rather than simply going after a quick sale. To that end, ensure your marketing strategy is optimized for the entire customer journey, not just short-term gains.
According to Rory:
"We still see a lot of brands optimizing for the single sale, not necessarily upselling or downselling to customers. Brands should focus on the lifetime value of each customer, aiming to turn a single purchase into a repeat purchase. This should be the goal for every transaction, whether in-store, online, or in-app."
Have the right mix of acquisition and retention marketing
Customer acquisition and retention are both important pieces of your marketing mix. The right balance depends on factors like your business goals, target audience, and market conditions.
How to know if you should focus on customer acquisition or customer retention:
Let's take a moment to understand both marketing tactics.
Customer acquisition is the objective of gaining new customers through marketing initiatives. Tools like customer data collection forms, customer review displays, customer referral programs, and paid advertising are common methods of acquisition marketing, and they can be essential for new and old businesses alike. However, did you know that acquiring a new customer costs as much as 5x more than retaining existing customers? For this reason, many retailers choose to incorporate acquisition into their marketing strategy but focus on customer retention.
Retention marketing is any marketing campaign or strategy that aims to grow customer loyalty and keep customers shopping with you time and time again (boosting customer lifetime value). Common retention marketing techniques are loyalty programs, automated and one-to-one campaigns (like emails), personalization with customer data and segmentation, and data- driven product recommendations during the final purchasing stages. Did you know there is a 60-70% increase in success rate for selling to existing customers compared to a 5-10% success rate for new customers?
Understanding your business goals and marketing objectives will be essential to helping you decide what marketing tools you need in your strategy to see the best results for your business. By creating a marketing strategy that strengthens customer relationships, boosts loyalty, and also gives you detailed insights into your customers' shopping behaviors, you're setting yourself up for success as you continue to develop a retail marketing strategy that suits your brand and gets increasingly better results.
What marketing tactics should you use to boost your ROI & build customer relationships?
With retention as the focus of retail marketing, it's important to keep this as a core principle when deciding what tools will work for your business. You know your brand and your customers better than anyone. Ask yourself what they'd respond to, and take the time to understand them!
To help you customize your own marketing strategy, we've pulled together the tactics of the most successful retail marketers with examples.
1. Launch loyalty & referral programs
Source: Bakers Delight
Customer loyalty programs shape customer relationships through a mutually beneficial system that encourages repeat business in exchange for valued rewards. And this, in turn, helps you to reap the benefits because as we know, your most loyal customers are also your most financially valuable. But did you also know that as you build life-long relationships with your customers, you'll see more than just financial return? Harvard Business Review stated that:
"Over time, as the loyalty life cycle plays out, loyal customers even become business builders: buying more, paying premium prices, and bringing in new customers through referrals."
Customer loyalty is the backbone of customer retention, and loyalty programs are pivotal in encouraging engagement throughout the entirety of a customer's journey with your store. From individual experiences to communications and the frequency of them, there are countless ways that you can build customer loyalty and also diminish it. To avoid the latter, consider what your customers need and want, and put yourself in their shoes.
So, how do you set up a POS rewards and referral program that will integrate with eCommerce and build customer loyalty while helping you acquire new, like-minded customers?
Let's break down one of our favorite customer loyalty programs to really understand the non-negotiables that you should include – Federation +.
New Zealand streetwear company, Federation + has mastered their loyalty program through understanding their customers and creating a program that represents data like average purchase value and customer lifetime value.
Federation + generously awards customers three loyalty points for every $1 they spend, which means that to redeem the first reward of free shipping, customers need to spend a little over $160 NZD. With products ranging from around $50 on average, to a few hundred dollars, it's not hard to see how customers quickly earn enough points to redeem a reward just by shopping, but they also earn generous point totals from simple actions like creating an account and having a birthday. In fact, by just completing those two actions alone, customers earn 600 points – enough to redeem Federation +'s first two reward options while still leaving enough points to encourage more customer engagement down the line.
💡 Retailer tip: by understanding your profit margins, average purchase value, average cart size, and customer lifetime value, you'll be able to create earing opportunities and rewards that delight your customers enough to encourage repeat purchases — all while protecting your return on investment.
Notice that Federation + makes sure to stay relevant through updating the widget on their website? At the time of writing, this widget displayed an image for Spring/Summer (which in New Zealand, falls between September and February). Federation + kept their widget seasonally relevant to capture shoppers' attention and encourage engagement.
And that's not all they do to help increase customer engagement. By adding tiers to their loyalty program, Federation + can turn long-term customers into brand ambassadors by rewarding consistent loyalty. Once a loyalty member reaches 5000 points, they enter Federation's 'Gold' tier, and at 15000 points, they become a 'Platinum' member. Each tier offers more and more perks tied to engagement, including 5 points for every $ spent when shoppers reach the 'Platinum' tier.
A tiered loyalty program provides continuous opportunities to reward loyalty with increased value, creating a value exchange. By rewarding your best customers with exclusive deals and better incentives, you'll see returns far greater than if you were to treat all customers the same.
"For the most profitable customers, retailers should be willing to provide even stronger incentives to encourage specific customer behaviors such as referring other customers, buying items not ordinarily purchased (or private-label items with higher margins), or paying full price rather than waiting for end-of-season markdowns."
This brings us to our final point about loyalty program strategies: referral programs. You'll notice that Federation + offers customers 100 points for successful friend referrals. This is a proven and powerful tactic for building your marketing lists and growing your business, as referral customers are much more likely to shop than 'cold' acquisitions.
According to research by the Wharton School of the University of Pennsylvania, "Referred customers are, on average, 4.5 cents per day more profitable than other customers."
💡 Retailer tip: By building your customer referral program into your loyalty program, you create clear incentives while automating the process. Offer incentives for friend referrals, as well as engagement like social media shares or, follows so that you build credibility and brand authority while also growing a team of brand advocates through your loyalty program.
Another excellent example of loyalty marketing in action comes from ALPHA60. This apparel retailer's approach focuses on simplicity and customer-centricity. They opted for a no-frills customer approach in which customers who spend a thousand dollars automatically get a $50 voucher.
"We try not to complicate it too much and add different things in, and that really works for us. I think it's because it's simple for people. It's easy for customers to understand," says Brand Strategist Kelvin Janissen.
2. Consider one-to-one campaigns
One-to-one campaigns are about more than just creating email or SMS campaigns to send to your customers. One-to-one marketing is a pillar of customer relationship management in that it's about sending personalized campaigns based on your customers' specific data and key information. But to do it well, you need to understand your customer database.
A simple way to look at this would be clever marketing. Whether you're adding data-driven product recommendations and merge tags for a touch of personalization, or you're making use of intricate customer segmentation tools, by adding personalized one-off campaigns to your POS and eCommerce email marketing strategy, you're helping your customers to feel special and appreciated, thereby strengthening their bond with your store.
T.C. Elli's does a wonderful job of adding personalization to a myriad of their one-to-one campaigns.
To promote one of their recent sales, the T.C. Elli's team sent the above SMS to a selection of customer segments that were most likely to return and make a purchase. Those segments included:
❇️ Best
❇️ Loyal
❇️ Promising
❇️ New
❇️ At-Risk
T.C. Elli's created an exclusive campaign for their customers who are known to keep coming back and only sent it to the customer they knew would be likely to make a purchase! Did you notice that T.C. Elli's also made sure to include their 'At-Risk' customer segment (made up of customers who hadn't made a purchase within the last 60 days)? By encouraging at-risk customers to shop, the T.C.E team is able to leverage that contact and create long-lasting bonds with customers who may have otherwise disappeared.
They don't stop there either! T.C. Elli's have used Marsello's customer segmentation tool (also known as 'Marketing Lists') to create customer segments specific to their loyalty program, helping them to create tailored one-off campaigns just for their most loyal fans.
Data-driven campaigns are about more than just sending an email and hoping to see consistent open rates. Instead, you're sending emails and text message campaigns to select groups of customers to draw them in with personalization so accurate that they can't help but make a purchase. At the end of the day, data and personalization will help you to create campaigns that delight your recipients to the extent that they look forward to receiving your communications and make them feel thrilled to be on your marketing lists – strengthening customer relationships and boosting LTV.
Just ask Super Butcher, an Aussie-based chain of butcher shops. They send about half a million text messages every month, but rather than using the "spray and pray" approach, they have a targeted SMS strategy that allows them to tailor their messaging to specific customer segments. They even localized their promotions for each store.
Because of their laser-focused approach, Super Butcher is able to effectively drive in-store traffic and online sales on a regular basis.
💡 Retailer tip: Aim to create personalized email campaigns that stand out, while also representing your brand. By adding your brand colors, logo, product images, and using data to feed-in customer information, you're already creating a much more memorable experience. If you're new to creating email campaigns, Marsello's email templates library is a great place to source inspiration while quickly creating memorable email campaigns.
3. Use automations
Automated campaigns are powerful retention tools that help you communicate with customers during key milestones without having to manually track those milestones.
Think of it this way: if your repeat customers spend 33% more than new customers, then setting up automated campaigns to engage them at every stage of their lifecycle is a win-win tactic that's sure to see results. When you pair automated campaigns with customer segmentation, you can create targeted campaigns that send the right message to the right customers at the right time.
But first, what exactly is an automated campaign?
Simply put, an automated campaign is an email and/or SMS campaign that is sent automatically to a specified customer group. Often, there are two or more emails within an automated campaign, referred to as a 'flow' and each individual email or SMS is triggered by an event, such as a customer signing up to your loyalty program or a customer not making a purchase within the last 60 days.
To break down a great automated campaign, let's look at Merrell NZ's abandoned cart automation.
When a member of Merrell NZ's customer database abandons their shopping cart without making a purchase, they automatically receive a reminder email with the products dropped into the email contents to encourage the customer to finalize their purchase. And if the customer hasn't opened the email within 24 hours, they receive the second email with a freebie thrown in to encourage customer engagement.
By targeting customers who've abandoned their cart, Merrell are able to reclaim revenue on sales that may not have gone through while also strengthing customer relationships and loyalty by offering incentives. They had this to say about their Marsello-powered marketing strategy that incorporates everything from a loyalty program with VIP tiers, to automated and one-to-one campaign strategies:
"[...] the Merrell Rewards program powered by Marsello means a lot to us – it gives us the opportunity to link customers from our retail and web stores, work around customer retention and automate email marketing flows in a really clever way."
"Welcome" messages to new customers are another popular automation. Here's how it works: when a new customer makes a purchase or signs up, an automated message is triggered to greet them, provide important information about your brand, and offer a special incentive to encourage their next purchase.
Scotty's Makeup & Beauty leverages this automation quite well. They send a welcome email to new customers and offer 10% off on their first purchase. This email alone brings in 16% of all revenue generated from marketing activity.
To find the best email automation platform for your business, you want to find a service that not only allows you to create your own automated campaigns but also customize and enable pre-built campaigns. Thankfully, you can do this easily with Marsello! Enable pre-built automations to:
❇️ Win-back customers who haven't shopped in a set period of time.
❇️ Recover abandoned carts.
❇️ Welcome first-time customers
❇️ Send a happy birthday email
❇️ Reward your best customers
❇️ and various options for customizing your automated campaigns.
💡 Retailer tip: Just as with one-off email campaigns, remember that personalization is essential to helping you stand out to your recipients. Use tools like merge tags (to automatically populate the email with customer information like their name), product content blocks, and catchy subject lines to capture your customers' attention. Adding discount codes will also help to sweeten the deal and encourage sales.
4. Scheduled emails and newsletters
A great way to stay top of mind (in addition to personalization and triggered automations) is to create an email marketing calendar that's populated with targeted campaigns and seasonal events.
Doing so helps ensure that a) you're consistently sending content to your audience and b) the content you're sending is relevant.
Take for example, HobbyTech Toys, a mass-market hobby store in Western Australia. Jordan Hepburn, the business owner, says that this approach has been essential to their marketing strategy.
Jordan says, "We have a marketing calendar where we've marked down targeted campaigns for each day. For example, on Monday, we'll send out a campaign for model trains, on Tuesday, for Lego, and we continue through the week that way. These are our rostered campaigns, but we also base them on events. For instance, for Mother's Day, Father's Day, Easter, Black Friday, and around 20 other events throughout the year, we tailor our campaigns accordingly."
HobbyTech Toys even goes a step further by using customer data to enhance their targeting efforts.
"For Mother's Day, we don't send emails to the women on our marketing list; we target men instead and focus on products that women typically buy in our store. We send newsletters to their partners or husbands."
He continues, "The same approach applies to seasonal events. In winter, we promote items like board games and other indoor hobbies instead of kites or radio-controlled cars, which can't be used in the rain. This data-driven approach helps us segment our customers and tailor our strategies, making planning and execution easier and more effective."
5. Collect customer feedback and reviews
Customer feedback provides valuable insights into your customers' individual actions with your brand, allowing you to act fast and either improve processes or create positive changes to further delight customers.
Source: Nodo.
Ivory Boutique does a wonderful job of this through their' points earn' loyalty notification email.
When loyalty program members earn points through Ivory Boutique's loyalty program, they receive a notification email encouraging customers to review their experience. This creates a private, honest communication channel where the Ivory Boutique team can gather direct feedback from customers who engage with their loyalty program, which in turn helps IB to address any issues and celebrate successes.
Private customer feedback is a powerful source of truth that helps to improve trust and encourages engagement from shoppers. But what about business and product reviews?
A Brightlocal survey found that "84% of people trust online reviews as much as a personal recommendation from someone they know – a stat that has increased every year the survey has been conducted". Given that we know how valuable a referred customer is (which can equate to a personal recommendation), it should come as no surprise that business and product reviews also play a huge role in customer loyalty and even buying behavior.
In fact, the same survey found that:
"74% of people said they would take the next step in the customer journey (pursue purchase) after seeing user reviews on a product or landing page. Including reviews vs not including reviews on a product page increases the likelihood of the customer taking the next step to pursue purchase by 17%".
The team behind Ivory Boutique understands the power of a positive Google Review, and their loyal customers love to leave glowing feedback. From boosting SEO and ranking higher in search results (which benefits customer acquisition efforts in turn) to growing a loyal customer database that praises your efforts wherever possible, customer reviews are a sound way to increase customer engagement and boost relationships.
How to get more product or business reviews:
The best way to get more business reviews is to automate your review requests. That way, you ensure that every customer is prompted to leave feedback without manual effort. Marsello's Google Reviews capability makes this super easy. You can send review requests via email and SMS to your newest customers, increasing your likelihood of receiving timely and relevant reviews.
The fashion retailer Harry & Her is an excellent example of how effective this strategy can be. They use Marsello to put review collection on autopilot and have seen a significant increase in positive feedback from their customers.
"We use Marsello's Google Reviews feature to encourage customer reviews after they buy something from one of our stores. First, we send an automated SMS; then we follow that up with an email to those who have not seen the SMS campaign. It's also been exciting to see our customers respond with so many positive reviews – we now have a 5-star average across our stores!"
💡 Retailer tip: Once you gather customer feedback and reviews, you open the floor for negative or constructive criticism. Knowing how to respond to your customers in every situation will go a long way in gaining trust. Make the effort to respond to customers whenever they interact with your business, no matter what kind of feedback you receive – just remember that your response has the power to shed a positive light on any situation.
6. Make sure your marketing channels work together
Your marketing initiatives shouldn't operate in silos. If you have marketing campaigns on Google, social media, email, and SMS, see to it that data flows seamlessly across these channels so that you can create a cohesive and targeted customer experience.
This is precisely what HobbyTech Toys are doing to optimize their marketing.
"Most of our campaigns are through our newsletter emails, but we also integrate our customer data into Facebook and Instagram for targeted ads, and then use remarketing through Google Ad campaigns," remarks Jordan.
"Having customer data allows us to leverage it across different channels, which is very important."
Another benefit of integrating your marketing and sales channels is that you can provide a true omnichannel experience. The baked goods brand Nodo uses Marsello to do exactly that.
Nodo seamlessly integrates Marsello with their Shopify, Lightspeed, and Bopple systems to unify customer data and create a consistent experience across all touchpoints. This integration enables Nodo to run personalized marketing campaigns and loyalty programs across their in-store, online, and app-based channels. That way, they can reward customers no matter where or how they're shopping.
"What people expect of us as a brand at the moment, they want to be able to use a unified system across everything. And that's where Marsello came in," says Rhys, CEO at Nodo.
7. Leverage customer data, retail analytics, and marketing reports
We talk about the importance of data quite a bit, and for good reason: it's the very thing that fuels your retail marketing campaigns. As Rory aptly puts it, "Your database is a real business asset."
And like any asset, you need to manage it well and keep it up to date.
🌟 Clean up your database
Proper data management starts with a clean database. When your data is squeaky clean, you benefit from more accurate targeting, higher engagement rates, and lower marketing costs. Talk about a win-win-win.
"You need clean and structured data to provide as much information about your customer at a profile level. This helps keep your marketing cost per acquisition low because you'll be able to target those segments better," explains Rory.
"Additionally, you'll be able to run more effective remarketing ads if you have clean data sets from your customers. Knowing what they're buying, who they are, where they shop, and how they behave allows you to use that information to create better remarketing campaigns."
Jordan agrees, and adds that a clean database should consist of active customers who are receptive to your messages.
"The first step is to clean your database. You can do this by running a win-back campaign, checking who's still active, and then cleaning up your current database. This way, you have only relevant customers who engage with your brand or emails. After that, segment your customers so you're not spamming them with general information they don't care about. If you don't do this, your open and click rates will suffer."
🌟 Integrate your data sources
Remember when we said about how your marketing campaigns shouldn't take place in silos? Well, the same advice applies to your data sources. See to it that your systems are seamlessly integrated.
"You want to make sure that all your systems are connected and communicating with each other," says Rory. "Is your point of sale connected to your loyalty program? Is that data feeding into your marketing stack? It should be relatively easy nowadays, thanks to cloud technologies. There are integration services, both native and third-party solutions, that can help you bridge any gaps."
Remember, the more tightly integrated your data sources are, the more effectively you can market to your customers.
🌟 Be aware of under-leveraged and over-leveraged databases
Some businesses make the mistake of not fully leveraging their data, meaning they collect customer information without using it.
That being said, other companies can also overuse the database and inundate customers with messages.
That's why Rory emphasizes the importance of striking the right balance between the two. You can do this by implementing a thoughtful and strategic approach to data usage. For instance, you can implement RFM (Recency, Frequency, Monetary) segmentation to target customers more effectively based on their purchasing behavior and engagement levels.
In doing so, you can deliver more personalized and relevant messages and hit the sweet spot regarding when and how you contact your customers.
🌟 Build your database
We talked about cleaning up your data, but of course, let's not forget the importance of building your database. Growing your list isn't a one-and-done activity, nor should it be treated like a time-bound campaign. It should be a constant effort, so growing your database must be top of mind.
Source: Bakers Delight
Need inspiration for how to do just that? TennisGear uses Marsello's in-store POS Prompts for Lightspeed to remind their staff to add new customers, update their details, and tell customers about their rewards. These simple prompts enabled them to capture more customer data efficiently, leading to a 2.5% increase in TennisGear's marketable database.
🌟 Recognize the power of customer data, retail analytics, and marketing reports
Do you know your customer lifetime value, average cart size, average purchase total, or even the total number of customers who are 'at-risk'? Closed-loop data reporting presents you with key metrics and data that provide essential insight into your marketing success.
If you have a complete understanding of your customer data and reporting, you'll be in a much better position to iterate on your marketing, test new campaigns or tools, and create a retail marketing strategy that adapts to work for all your customers.
Merrell NZ have used their customer data and retail reporting to create their outstanding omnichannel marketing strategy (learn more about Omnichannel Marketing), and they've seen remarkable results with the help of data-driven testing. They had this to say about their experience of testing marketing tools and campaigns with Marsello:
"Marsello is a platform that provides you with a lot of solutions that you can test step-by-step while looking at the results. It's not an expensive tool so it makes sense to test it for a couple of months."
Customer data and purchase patterns are also essential in populating automated tools such as product recommendations and automated email campaigns. With accurate customer data, you can confidently suggest and upsell new products to customers no matter where they shop, enabling you to create more profit during each sale.
And all of this should come as no surprise. Accurate data and reporting have long been a 'must-have' for marketing tools. A survey by Alteryx and RetailWire found that 81% of respondents (who were retailers and brand manufacturers) gather customer insights and 76% of respondents stated that insights are essential for business performance. But this is where the survey findings get a little more tricky – shockingly, only 16% of respondents consider themselves to be experts in utilizing customer data, while between 24% and 60% reported that they are 'newbies' or 'getting there'.
Just how many of these retailers would be seeing remarkably improve results with a better understanding of their reporting resources?
💡 Retailer tip: Take the time to familiarize yourself with all the reports available to you. Understand your product margins, sales patterns, customer data, and marketing successes by becoming familiar with the trends. Then, set yourself achievable goals and make decisions that will help you meet them! Start small, for example: 'Improve email open rates by 5% in 3 months' and then create tests for subject lines, content, regularity, and more!
Final words on creating a retail marketing strategy that will boost sales
There are countless ways to approach retail marketing. But one key principle that, when done right, will see consistent results is creating a marketing strategy designed to keep customers coming back. Whether it's a customer loyalty program, data-driven marketing like at-POS product recommendations, or simply promoting an in-store sale through SMS, there are a myriad of tools you can use to ensure customers are so delighted they become brand ambassadors.
We've touched on the following tools, all available with Marsello:
❇️ Loyalty and referral programs
❇️ One-off, personalized email and SMS campaigns
❇️ Automated campaigns
❇️ Customer feedback collection and reviews
❇️ Closed-loop data and analytics displays.
These are just a handful of the tools available to delight your customers, help attract new customers, and supercharge your business growth.
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