Market Developments

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Retailers focus on service, personalization

By Lucia Moses
October 06, 2009

With the recession lingering, retailers are stepping up customer service and personalized offers as they try to woo shoppers.

Panelists shared those and other observations on Oct. 2 at People StyleWatch's Retail Summit, hosted by the Time Inc. shopping title.

With consumers reluctant to part with their money, value and uniqueness become more important than ever, panelists said.

"Sale is a key word," said Brendan Hoffman, president and CEO, Lord and Taylor, where 20 percent discounts have replaced the old 15 percent off. "They want a key item that has some embellishment."

Hoffman and others also said they're putting greater emphasis on building customer loyalty in the downturn. Lord and Taylor recently launched a new brand campaign to emphasize the store's service and affordability, and is now testing a loyalty card program, per Hoffman.

Elsewhere, TV shopping network HSN has brought its call-center function in-house, which has helped improve its customer service scores, CEO Mindy Grossman said. And luxury brand shopping site Gilt Groupe is trying to strengthen customer loyalty by exploring offering private sales for its top-spending members and creating more targeted sales based on members' spending history and volume, said CEO Susan Lyne.

Lyne said that being transparent is an important way to engender loyalty. "We screw up at times," she said. "I'm as public as I can be with our customers."

The loyalty imperative applies to magazines, too. Susan Kaufman, editor of StyleWatch, said the title goes the extra mile to track down items featured in its pages for readers. "You have to make them believe you're there for them," Kaufman said.

Despite the gloom surrounding retail, high-ticket items haven't ceased to sell, suggesting that the luxury market hasn't completely dried up, according to panelists. Lyne cited items like a crocodile-skin bag that have been in high demand on Gilt Groupe lately.

"Someone bought a $20,000 piece of jewelry--that's huge," Lyne said. "Clearly, people are willing to spend if they actually believe there is real value there."

If any good comes out of the recession, it may be retailers' renewed focus on the customer experience and designers' emphasis on affordable lines, as exemplified by the fall runway shows, panelists agreed.

"It's not just about designers' egos anymore," said Kaufman. "It's a business, and they need to step up to the plate."

--Nielsen Business Media
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