Recommerce on the surge: Why second-hand stores are booming
Why is recommerce on the rise? and why are marketplaces such as VINTED, thredUP or Poshmark thriving in this business model? Is it just trendy, cost effective, sustainable or a mix of all these that explains the current surge? Tomorrow’s personalization and customer journeys are expected to be even smarter, more immersive, more trust-enabling than they are today. The question is: Are brands and consumers ready? Here is an analysis from Olivier Carrot, Global Business Unit Direct, Retail & E-commerce.
So which are some of the factors that have contributed to this increase?
- Rise in the use of mobile devices. The accessibility of mobile devices globally has essentially contributed to the growth of e-commerce thanks to the increased reach which has consequently increased the sales. According to Aaron Orendorff – Forbes Top 10 B2B Content Marketer, e-commerce has helped businesses launch beyond borders reaching out to millions of new potential customers. By 2023, an increase of 276.9% in the total global sales in retail is projected with APAC taking the lead (source: shopify.com).
The easy accessibility of mobile phones and internet has definitely elevated the demand of recommerce as a service. This surge has seen many start- ups joining the bandwagon to not only meet the growing demand but also to take advantage of the efficiency and scalability that marketplaces provide.
Through the creation of an application that links second-hand products to customers, VINTED has grown from being owned by its two co-founders Milda and Justas to an organization that employs more than 450 people and unites a community of 25 million people.
- Personalized customer experiences. In reference to platforms like VINTED, personalized services that match customers preferences are highly sought after. Customers want to feel valued and there is no better way than to offer a personalized experience. Even though many consumers are in search of products being offered at discounted or affordable prices, they will not compromise on the experience. Brands are thus competing not only on price but also on offering the most memorable experience to their customers.
- Old is new again. Founded in 2009 as a swapping company for men’s shirts’ thredUP is a huge consumer marketplace that flaunts over 35,000 brands. In one of his keynotes, CEO and co-founder James Reinhart forecasts sales of upto $51 billion from the second-hand apparel market by 2023 (source yahoo.com)
In reality, people buy twice as many clothes and wear them half as long. If one can buy a branded item for half the price of the new, why not? There is a growing trend to transform consumption through reuse. And so as to keep up with the changing environment in the retail industry, integrating a resale option in traditional retail outlets is seen to boost the overall sales. Customers are sparked to spend 21% more and visit 70% more frequently. James attributes the massive increase in the visiting percentage to the fact that second hand collection is restocked every two weeks whereas in the traditional format, new collection arrives between four to six times a year (source: www.thredup.com)
- Cost friendly. Pocket friendly purchases is a big driver in the recommerce boom. Customers are increasingly seeing the value in buying recycled brand-name products for huge discounts. “Recommerce has seen a tremendous upsurge” says Steven Bethell, founder of Bank & Vogue – a firm that specializes in the logistics of selling used goods and operates a sister company called Beyond Retro. Prior to making a purchase, many shoppers aquent themselves with the resale possibilities of items they wish to buy with the plan to resell them in the near future. The retail industry is seeing a continued shift with the majority of consumers shopping smarter.
- Sustainability. The new affluent generations like the Gen Z are more environmental and social conscious and as such, they expect brands to be more ethical and sustainable in their production processes. Fashion brands that have this audience as their customer base, are obliged to revamp their business models to be able to not only attract but most definitely also retain this segment.
VINTED is one such brand. By investing on its brand ethos which is providing a platform for purchasing and selling of second-hand clothes. These clothes reduce the environmental impact of Co2 levels that are usually released in the production of new clothes (think water, chemicals, fertilizers and pesticides). In addition, it prolongs the shelf life of clothes that would otherwise head to the dumping sites in one or two years. It’s estimated that 600 kilograms of used clothes would lead to a reduction of 2250 kilograms of Co2 emissions, 3.6 billion liters of water saved, and 144 trees planted. (www.smartgreenpost.com).
At Webhelp, our clients are at the heart and our core objective is to ensure that their customers experience world class service in every touchpoint. The creation and upholding of a sustainable environment also go hand in hand with what our company stands for.
In our endeavor to always provide seamless interactions, we go the extra mile to guarantee that customers’ needs are met. We focus on making the purchase process in the marketplaces as simple and fulfilling as possible.
Our flawless and memorable customer journey from order management to returns and replacements is swiftly executed with our dedicated service specialist who are located globally in the different hubs.
And thanks to the booming second-hand industry, content management and moderation is also on high demand. Ever thought of outsourcing your content moderation? Our highly experienced offshore content moderators ensure that our clients’ brands are duly protected across their target audience. We support our clients’ to not only maintain their brand integrity, but also to shield their customers from inappropriate, aggressive or illegal content.
Are you looking for an experienced partner who will help you take your marketplace to the next level? Get in touch to receive your tailormade solution: Olivier Carrot.
OneShot #5 - Influence
Our 5th edition of OneShot is here!
Following the unprecedented situation of the COVID-19 pandemic, numerous companies have been forced to make vital adjustments to stay afloat and also guarantee business continuity. Our interesting reads also include:
A Word: KOL – Key Opinion Leader
A Number: 10,000 subscribers and no more
Three Opinions: Influence: How to get your messages across?
One News: TikTok supports its position in Europe
A Demo: The dark social
A B-Case: How Webhelp’s KYC participated in securing a platform by Bpifrance
A Hashtag: #TrustYourInfluencer
An Offer: MyStudioFactory
An appointment: Conversation 2020, Paris
A Conversation: How to restore confidence in the time of fake news?
A Story: Santa Claus, citizen of the New World
Read all about these exciting and thought-provoking topics in our 5th edition of OneShot.
Fast Fashion, online retail growth and the future of the high-street
As fast fashion brand Boohoo adds more failing high-street brands to its online portfolio, sector expert Kellyann McCafferty, Account Director for the Webhelp UK Region, takes the retail temperature and considers the way forward for beleaguered high street brands.
It’s no secret that the world of retail has been profoundly affected by the COVID-19 crisis, and the ripples have been felt across the sector with the demise of popular brands like Cath Kidston and Laura Ashley and the high profile store closures of industry stalwarts like Debenhams.
There were shockwaves again this week, with the announcement that digital fast fashion company Boohoo, was to add to its stable of brands with the acquisition of the online divisions of failing high street stores Oasis and Warehouse.
This news illustrates how the gap is quickly widening between traditional brick and mortar retail and the fortunes of purely (or primarily) online services, like Boohoo, Very.com and Freemans Grattan Holdings.
After initial concerns over supply chains, and a dip in March due to the lock down effect, unlike high-street stores, most online brands are now firmly back to business as usual, with Boohoo and The Very Group reporting growth in retail sales overall.
However, this hasn’t come easily, and the hidden building blocks to online success stories (like these) are early adoption of new technology and better business process services; including the creation of smooth customer interactions across all channels and excellent customer service management operations and systems.
At Webhelp, we guide our clients through this transformational journey, and as Webhelp UK CEO David Turner confirms, we believe that:
“Investment in technology infrastructure is absolutely critical. At Webhelp we have already made significant investments in our digital and automation capabilities to help clients improve customer experience and reduce costs using digital self-service, whilst leveraging technologies such as chatbots to reduce volumes of non-complex and low value interactions.”
And retail will have to adapt quickly, as it remains the single largest private sector employer in the UK, with 2.9 million people working the sector, and annual sales totalling a staggering £394bn. In 2019, online retail accounted for less than 20% of these sales, but the next financial year is likely to report a vastly different statistic.
Grocery retail has been cited as one of the big success stories during COVID, with high profile retailer’s like Asda and Sainsbury’s stepping up with feed the nation campaigns, and drastically increasing their online capabilities to support both everyday shoppers and vulnerable customers during the outbreak.
The big players in the consumer electrical markets, like Dixons Carphone, have also witnessed an upswing in online purchases, with everything from Smart TV’s, laptop’s, printers, desks to ovens, fridge freezers and washing machines, becoming hot commodities as people nested into their homes for both work and leisure.
However, the key questions will be, as the world comes out of lockdown, will our shopping behaviours have changed for good? And, what will this mean for both the economy and the future of the high-street? With revenues falling hard in May, the BRC – who are the go-to trade association for all UK retailers - warned that shops face a “fight for survival” in the coming months with tough new physical distancing and health and safety requirements.
It was widely reported in April of this year, that sales had gone from £650m a month to zero for fast fashion brand Primark; however, it seems that we haven’t lost our appetite for a bargain, as huge queues were reported as the stores finally opened their doors again in England this week.
It is my belief that, while COVID-19 may have changed our online behaviour and will increase the amount we buy on line, the experience of shopping in a store environment is something that most people still enjoy. We may yet see a few more casualties, but the high-street will slowly recover.
The concept of experiential retail will continue to grow, with physical shopping becoming more of a leisure activity, like the restaurant industry, a focus for Instagram snaps and social clout.
However, we can’t ignore the fact that this crisis has given a very clear warning to big brands who have not yet embraced an omni-channel approach, as relying on a single channel for sales or customer service is now revealed as a very risky proposition.
At Webhelp we believe that customer experience providers should offer a responsive, flexible and robust approach, safeguarding their client’s business as their own, especially under crisis. Whilst always looking for new ways to use the best technology and people to future proof their operations.
We are working with our clients to share some of our innovative partnership approaches in future blogs, so watch this space for future updates. In the meantime, read our expert insight on the future of travel from international sector expert and Webhelp Global Director Nora Boros, or click here to get an in-depth view of our services.
Sectors impacted by the COVID-19 lockdown
The business landscape is rapidly changing due to the influence of COVID-19. Here we take an at-a-glance look at which sectors have been positively and negatively impacted over the past few months.
Read our blog from Marketing Manager Ewan McKay for more in depth insight and look out for a new Whitepaper exploring the operating models of the future.
CLICK ON IMAGE TO ENLARGE
How COVID-19 will create a revolution in flexible working
As the coronavirus (COVID-19) continues to have an unprecedented impact on business and society across the globe, David Turner, Webhelp Managing Director and CEO for the UK Group, looks at how this unexpected force will drive a revolution in homeworking, and why businesses who struggle to embrace this may be placing themselves at a serious disadvantage.
Preface
01/04/20
Since the time of writing this, just a few weeks ago, the world has changed dramatically, with entire countries entering strict lockdown periods and large regions operating under shelter in place instructions. My thoughts below on the importance of flexibility and looking after our people have become increasingly pertinent, and as a business we have done our best to respond in kind. In 12 short days, more than 6,959 of our employees are now undertaking home based or remote working, and this number will continue to rise as we work with our clients to tackle operational, technical and logistical challenges.
I owe a huge debt of thanks for this incredible feat to our IT and Operations teams who continue to go above and beyond, to our many UK clients for their support in this changing environment and most importantly to all our people for their commitment and dedication.
You can read more about our current position on the Coronavirus and the key areas our people are supporting here.
It is now obvious that a seismic change is being experienced by our industry, the ramifications of which will be felt for years to come. This will alter the customer experience landscape forever, and we must be both responsible and responsive in meeting this challenge.
We are living in astonishing times, and the whole world is watching as Governments and scientists argue over the best approach to safeguard the health of populations, to look after the vulnerable and to keep the global economy stable.
And there is no doubt that related conversations are happening within the worldwide business community, debating the best strategies and most flexible solutions to keep the wheels of work turning and employees safe and well looked after.
At Webhelp, our people are our top priority, and we are reacting quickly, providing daily guidance and working with our clients and community to ensure that everyone across the business is informed and as equipped as possible to face what is likely to be a period of rapid change.
The UK, and the rest of the world, is now facing the biggest economic and social upheaval since the Second World War, and as we did during that challenging period, we must be ready to rise to meet some unprecedented changes in the status quo.
The transformation of the wartime workforce is well documented, with the image of Rosie the Riveter in her coveralls and red bandanna alongside the slogan “We Can Do It!” becoming one of the best-known icons of World War II. Now as then, we need to call upon new ways of thinking and using resources and people that we have in the best, most innovative ways.
It is a time for increased flexibility, and this isn’t something businesses should be afraid of. In fact Forbes studies confirm that increasing flexibility creates significant improvements in morale, productivity, and engagement - especially when employees are given the option to work remotely or to an adaptable schedule.
It has been my experience, which is backed by evidence from The International Journal of Economics, that flexibility in working hours reduces employee work stress, improves their mental and physical stability – which in turn creates greater effectiveness and efficiency, determination and coordination.
I completely understand that some business may be wary of remote working, perhaps due to the feeling that they can no longer control or measure the number of hours their employees are working.
Mark Davidson, Chief Operating Officer at Webhelp, suggests that we can alleviate this concern in the following way:
“When considering remote working, it is important to set clear and consistent goals and maintain a results orientated approach, making sure that employee focus remains firmly on tangible gains and objectives.”
Added to this, actually going into the office creates a less productive environment – as The Wall Street Journal notes: “Office workers are interrupted–or self-interrupted–roughly every three minutes.” And, after interruption it takes almost half an hour to get back on focus to their original task.
There is no doubt that along with COVID-19, a radical change is coming, whether we are ready for it or not - and business that mobilise NOW to embrace this new way of working, will find themselves ahead of the curve in relation to their less adaptable competitors, and way ahead in terms of resilience and productivity.
Remote working is becoming the new normal with CNN Business reporting that companies like Microsoft, Facebook, Google, Twitter and Amazon have already implemented remote working policies for many or all of their employees around the globe.
There is now no time to waste, as reporter Sean Peak for Business News Daily concludes:
“Instead of resisting the change, organizations should improve their remote work policies and capabilities.”
As a people-first business, we are committed to taking a human approach to this crisis and using the technology we have to safeguard all our colleagues, which means rapidly looking at ways to increase our infrastructure to support homeworking where possible.
This isn’t a universal solution, and we know that homeworking won’t be the correct answer for every business objective, including some within our own operations. This will have to be a managed process, which might not be suitable for the full range of employees. Finding the correct balance will be something that will take co-operation, innovation and experience.
Many in the business community think that at, this stage in the game, we can only wait and wonder, however, I firmly believe that brands who use this precious (fast decreasing) window to take decisive action to look after their people, and put strategies and logistics for a degree of homeworking in place, will reap the benefits both in the short term and in the uncertain future.
| Homeworking - the facts! |
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| * Data Airtasker 2019 |
Communications specialist, Rebecca Price, on emotion and customer behaviours
In part 6 of our blog serialisation of the latest Webhelp whitepaper “Emotion: Establishing emotional connections with customers: What brands need to know” Guest writer, Brand and communications specialist, Rebecca Price, Partner, Frank, Bright and Abel talks about how brands can use emotional connection to lead to profitable customer behaviours.
How can brands create emotional connections?
Without a clear brand purpose,that goes beyond practical product or service benefits, customers might not see any reasons to commit to a brand. A brand purpose focuses on the more emotional, social and ethical benefits the company stands for. As new generations become paying customers, we’re seeing brand purpose become increasingly important in terms of creating meaningful emotional connections, as organizational purpose and values are key purchase decision factors.
Customers are self-informed and very savvy when it comes to making brand choices. To compete, brands need to make sure their purpose is compelling, and bring it to life in the competitive landscape and on key issues. Often, apart from the point of sale, customers experience a brand when they have questions or a problem that needs solving. This means that brands should think of their purpose in a wide context of great products, presence in the community, and very importantly, through the customer experience.
Brand purpose strengthens customer connection. When combined with brand values and all the other things that constitute a brand, this connection can be very powerful and lead to profitable customer behaviours.
How do you create a compelling brand purpose?
Core to defining a brand’s purpose is a deep understanding of the customer. Today, that goes beyond traditional demographics and incorporates customer behaviours – and even ideologies. Purpose-driven brands need to have an ideology too.
Before a brand can determine “why” it exists, it needs to determine what it stands for, and what it’s willing to fight for. A strong brand evolves over time, and having a strong ideology provides the compass needed to remain consistent and likeable over time.
Brands and customer relationships are based on emotion. This means that brands need to have authentic, ‘on brand’, two way conversations, and consider how those conversations will impact customer sentiment.
How can brands help their people connect with customers?
To help employees represent the brand effectively to customers, employers are increasingly focusing on benchmarking, enhancing or recalibrating their employer brands. Employees live the brand through their behaviours, so helping them to understand and live the brand’s purpose and values is vital – particularly in customer service environments.
Employees essentially act as brand advocates, so the potential to positively impact customer perceptions through customer engagement is huge.
You can follow blog the serialisation, and join the conversation, on the Webhelp LinkedIn and Twitter sites or read the Whitepaper in full below.
Brand humanity – what it is and why it works!
In part 5 of our blog serialisation of the latest Webhelp whitepaper “Emotion: Establishing emotional connections with customers: What brands need to know” John Leighton Head of Customer Service, easyJet, shares his view on why emotional connection is essential for brands.
Emotional connection is innately important to easyJet’s brand positioning and it’s come naturally. We’re starting to really push the fact that we’re a retailer, not an airline, and we recognise that as a retailer, we’re retailing products that are extremely emotional.
So, as we’ve evolved it’s happened, but our focus continues to strengthen; for instance, it’s a foundation for our relationship with Webhelp.
Measurement of emotional connection isn’t yet ‘on point’ in our industry. In fact, the way the customer service industry measures things – voice of the customer, customer satisfaction, customer effort, etc. – is actually quite linear. We’re doing some interesting work with Webhelp, powered by its business intelligence team, to understand when and how customers are coming in, why they’re calling, what the true behavioural outcomes are – rather than customer-stated outcomes. This will be important in helping us understand the monetary value of emotional connection.
Measuring the monetary impact of emotional connection is much easier for a subscription model when you know your customer base and can see customer reaction to things that you ‘tweak’ – be it service innovation or pricing, for example.
Our own understanding of this will be helped by easyJet’s launch of easyJet Holidays which will give us much greater insights into the links between personal motivators and what products our customers buy. As such, we’ll be able to anticipate what people want from travel and facilitate that need. The product positioning and the sell will be easier as it’s about offering things that will enhance what customers want – and what they’re doing.
There are challenges however. Organisational silos – and even the way companies do things – can get in the way. Despite the industry lamenting it for decades, ‘Service’ is generally still a cost centre, whereas ‘Sales’ is a profit centre.
If you apply that to the airline industry today, this poses challenges. Why is the customer flying? Do they want/need bags? Do they have a new baby? This insight is across marketing, sales, AND customer service…
In terms of the human skills required to build emotional connection, we know that authenticity is key, and we are working internally and with Webhelp on how to make our customer experiences authentic.
We also know that advisor longevity is a key contributor to emotionally connected customers, and Webhelp is a strong force to be reckoned with in this area. For instance, advisor tenure in Cape Town has led to the highest levels of customer satisfaction across the entire company (EasyJet estate).
To conclude, I would be remiss if I didn’t confirm that data is essential to build emotional connections with customers. It’s not just important to have it, but to actually use it purposefully to understand what’s important to customers.
The future is about micro-segmentation based on expert use of data. By understanding who customers are, what pushes their buttons, and what their personal motivations for travel are, and combining this understanding with ‘human’ customer experience, we will be able to create strong bonds with specific customers. For example, at weekends they’re a family customer, but during the week they’re a business customer. Their wants and needs – and expectations – throughout the entire customer journey need to be treated differently.
You can follow blog the serialisation, and join the conversation, on the Webhelp LinkedIn and Twitter sites or read the Whitepaper in full below.
Brand humanity – what it is and why it works!
In part 3 of our blog serialisation of the latest Webhelp whitepaper “Emotion: Establishing emotional connections with customers: What brands need to know” A driving force in the ‘Think Human’ re-brand, Polly Ashdown, Marketing & Communications Director Webhelp UK, India & South Africa, reveals how brand humanity can create positive emotion and prevent disruption in CX.
As the range of digital consumer platforms and devices multiply, customer relationships are increasingly being disrupted by digital communications. Used to getting what they want when they want it, customers now expect brands to interact with them across each touch-point consistently – and in line with their expectations.
The brands that are able to speak with customers – rather than at them – will create and reinforce emotional connection. As our new YouGov consumer research shows, the impact of brand humanity on consumer behaviour cannot be underestimated. And neither can the impact on measurable outcomes including spend, loyalty and advocacy.
But how important is this connection to the customer, and consequentially to brands? Overall, 40% of consumers report feeling an emotional connection to a brand, and this connection makes them behave in different ways towards the brand.
In fact, of those who said they feel an emotional connection to one or more brands, 54% of people are prepared to pay slightly more for products/services, 66% are more loyal to the brand, 55% are likely to purchase other products/services, 63% recommend the brand to family and friends, and 49% share experiences of the brand.
Revealingly, only 4% of customers reported that having an emotional connection to a brand would NOT make them behave in a particular way, when talking to friends and family.
And these results become all the more interesting when we look at the source of emotional connection. The top 5 ways in which people feel emotionally connected to a brand are: The overall customer experience (53%), The brand is easy to deal with (38%), The brand’s values are similar to mine (34%), The quality of interactions with the brand (26%), The brand is ‘human’ (22%).
As we can see, customers reward brands who successfully demonstrate humanity with loyalty, advocacy, and their cash. If brands are perceived as ‘human’, customers are more likely to: Emotionally connect with the brand (net likely 56%), Go back to the brand repeatedly, rather than trying a different brand (net more likely 69%), Spend more money with the brand (net ‘more likely’ 61%), Recommend the brand to other people (net ‘more likely’ 67%). People in the ABC1 (the three higher social and economic groups) bracket are more likely than C2DE (the three lower social and economic groups) respondents to take positive actions towards a brand because it feels ‘human’.
Brands therefore have an opportunity to leverage emotional connection as a powerful driver of positive behaviours with customers with disposable income.
Brands that really ‘get’ the importance of a human angle look at making connection in the most human way possible. They’re less focused on the transaction – i.e. of selling the product, or answering the question – they’re focused on building trust, anticipating customer needs, and giving customers the edge. They know that consistency is key to trust and credibility, and focus on the entire experience, rather than one element of the customer journey.
In a nutshell, brands that are human are good at building relationships. They design customer experience from the customer’s ‘ideal’ of a relationship, and with a good understanding of their motivations. Customer insight and analytics are key to making sure that everything – from messaging, the language and channels used – correspond to the customer’s ‘ideal’.
At Webhelp, we’re using customer insight and analytics to create experiences that are human. While technology is inevitably core to customer experience, we always view technology from the standpoint of how it can augment the end to end experience and bring out the best in people.
Consider emotional connection as a hierarchy. Clearly, there are functional “transactional” things that need to ‘get done’, but there are experiences that need to happen in order to form emotional connection, and achieve the holy grail of loyalty and advocacy.
You can follow blog the serialisation, and join the conversation, on the Webhelp LinkedIn and Twitter sites or read the Whitepaper in full below.
Make ‘Time for a Cuppa!’ with Webhelp and Dementia UK
Webhelp is delighted to be working in partnership with Dementia UK as their corporate charity for 2020. And we’d like to help spread some support for their Time for a Cuppa campaign, which is starting a week of activity, on the 1st to the 8th March. And who better to tell us about this than Admiral Nurse, Wendy, who hosted her own party last year!
We love a brew and a good conversation here at Webhelp, so we think Time for a Cuppa is the perfect occasion to get together with our colleagues (and eat some amazing home baking!) whilst raising money to help dementia specialist nurses to support more families facing dementia.
Our people are getting ready to host their own tea parties, right across the UK, which we will share on social media, and to inspire them we’ve asked Admiral Nurse Wendy Mountford to tell us why her work is so important and how to get involved:
“Throughout my 25 year nursing career, I have always enjoyed working with people living with dementia and their family members.
I became an Admiral Nurse at Douglas Macmillan Hospice in 2017, to ensure that families with dementia are given information and support regarding end of life care. It’s a very difficult time for families, but we can be there for them to make sure the person with dementia is comfortable and not in any pain, and that the family are as well looked after as possible.
Admiral Nurses help families throughout their experience with dementia, and one of the great honours about being one is helping people to cope, while dealing with one of the toughest health conditions out there.
We help people to understand how the person with dementia might be feeling, to help them identify if they are in any pain, and to give them the tools and the confidence to communicate with other healthcare professionals, such as those working in a care home, to make sure that the person’s wellbeing and best interests are always being looked after.
Throughout my role as an Admiral Nurse, Dementia UK has done a huge amount to support me through monthly supervisions and training sessions so it was really important for me to give something back – Time for a Cuppa seemed like an ideal opportunity.
Last year, we held a Time for a Cuppa at the hospice. Each department baked a cake and entered them into our cake competition. The prize was afternoon tea for two at a popular local venue. People made donations for slices and we played games, such as guess the bear’s name and the number of sweets in a jar, to raise funds and to get people chatting.
We invited everybody: hospice staff, patients, visitors and volunteers and many attended; catching up with them all was my favourite part of the day!”
You can hold your Time for a Cuppa anytime of the year, not just in March – and remember every cake you bake, every cuppa you make and every pound you raise can make a huge difference to people with dementia and their families.
We will be supporting Dementia UK throughout the year and posting regular fundraising stories, led by our on-site Engagement Ambassadors at www.webhelp.com. To find out more about the valuable work of Dementia UK visit www.dementiauk.org
Industry expert Scott Logie on why emotional connection works
In part 3 of our blog serialisation of the latest Webhelp whitepaper “Emotion: Establishing emotional connections with customers: What brands need to know” here industry expert Scott Logie, Customer Engagement Director, REaD Group and Chair of the DMA Customer Engagement Committee, shares his view.
For the DMA’s Customer Engagement Committee members, the topic of emotional connection is very important. As consumers we have emotions. We feel strongly about brands. It therefore makes sense that brands build on this.
However, ‘connection’ differs from brand to brand and it’s not always straightforward to pinpoint the drivers.
Take a dating company for example. An emotional connection is actually what their customers are buying. There’s an assumption that openness will be quite high, and that extroversion would be highly correlated with openness. However, in work we did for a leading dating agency, this was not the case for all customer segments. Rather than being driven by traditional demographics (age or gender for example) or personality traits, we found that segments are actually driven by behaviour and life-stage.
Emotional connection is key to loyalty. DMA Research reveals interesting similarities - and differences - regarding brand loyalty. All brands can have a ‘functional loyalty’ that’s based on the right method, the right product or service and the right price. That’s the baseline.
In financial services for example, unless you get the functional stuff right, there’s no point in brands trying to tap into emotions. On the other hand, consumers are increasingly ‘big’ on ethics and morals in certain sectors, and some will actively seek out brands that treat people fairly and are concerned about the environment.
In terms of ‘tactics’, rewards don’t play a big role in terms of loyalty to brands, with the exception of supermarkets, which is hardly surprising as we’re well trained in terms of supermarket rewards.
However, even here there are some interesting findings. Financial services organisations typically don’t offer rewards, yet in our research consumers stated that they would respond favourably to them.
In the YouGov survey for Webhelp: Only 18% of respondents said that they consider things like “if the brand gives me personalised rewards (e.g. birthday vouchers, discount codes, etc.)” when thinking about if they are are emotionally connected to a brand.
By far the biggest complaint in the DMA’s survey was a ‘lack of consistency’. Often consumers will get a campaign they’re interested in, but when they respond it’s a real “oh no” moment when they try to contact the brand via the website, on social, or by telephone and the experience doesn’t follow suit. Customers are more demanding than ever, so ignore consistency at your peril…
It’s worth noting that organisational structure can be a barrier to consistency – with siloed teams being the biggest challenge. Unless there’s an executive sponsor or a key driver to change that, then brands will struggle. Certain companies realise this; Santander, for example, is trying to unify across all their teams and consider the end to end customer journeys. However, by and large, not enough is being done.
To conclude, while it’s possible to measure loyalty, the measurement of emotional connection has some way to go. Many brands don’t know where to start, although some companies we work with analyse demographics and behaviours, overlaying data from Mention Me, a ‘refer a friend’ platform. It’s not highly scientific, but it does give a measure of loyalty and recommendation.
The DMA’s Customer Engagement Committee was put together to help brands reach and engage customers and develop customer loyalty across all channels. Its mantra is to combine data, technology and creativity to help brands dramatically improve their campaign results.
You can follow blog the serialisation, and join the conversation, on the Webhelp LinkedIn and Twitter sites or read the Whitepaper in full below.