“Putting the customer first” is not just rhetoric, but part of the Macy’s DNA. Keeping loyal customers happy is a main focus of its customer-centric strategy, and data plays an important role in understanding how to maintain and grow loyals.
At the D2 Digital Dialogue Conference in Cincinnati on Sept. 11, Julie Bernard, Macy’s SVP of Customer Strategy, Marketing, and Advertising, said that Macy’s saw a huge opportunity to retain and grow loyal customers after deciding to tap into its immense shopper database.
About six years ago, Macy’s conducted large-scale primary and secondary research to better understand customers, but was left feeling it still wasn’t completely connecting with and driving sales from its core customers. The retailer decided to leverage its enormous customer database of 33 million active U.S. households to glean insights about Macy’s core customer and develop a strategic customer focus.
The database had been developed, perfectly organized, augmented and maintained for over 20 years, but had historically been used almost exclusively for direct mail and email. The database had been used to “abuse the American public,” according to Bernard, but hadn’t been used to better understand and market to customers.
Macy’s wondered “what can we do to tap into this data asset in a much more strategic way?” said Bernard.
“How can we glean insights about who the core customer is by really looking at her behavior with us over time, across channels and understand how we can improve service, product, price, and marketing,” Bernard explained.
From those questions, Macy’s landed on “Love the Ones You Are With” as its customer strategy – which focuses on retaining and growing the loyals who are already shopping with Macy’s.
“We saw that seven out of 10 American households come into Macy’s on an annual basis,” Bernard explained, “yet only five out of the seven are making a purchase. Of the five out of the seven that are making a purchase, only a handful of them are loyal to Macy’s. Of those that were loyal, they were still only giving us a little less than a third of their share of wallet. So there was a huge opportunity to drive one extra visit with our loyal customers.”
Macy’s had vast information on loyal customers – including interactions that they have with Macy’s, including in-store and online. Bernard explained that Macy’s puts priority on making loyal shoppers happy with their customer experience, but believes if they get it right with loyals, then non-loyals and non-purchasers will naturally follow. “When we do that, we then have opportunity to develop the non-loyals and convert the non-purchasers that come into our store,” said Bernard. “There is a halo effect of doing the right thing really well for loyal customers” and subsequently, she said, “developing non-loyals.”
A key pillar of Macy’s customer strategy is delivering messages that are relevant to customers. Macy’s taps into its database to understand how, where, and when to deliver messages and appropriate content. For example, it’s common for Macy’s to create and deliver thousands of variations of the same mailings to customers, based on their shopping and browsing histories.
Another pillar of the strategy is to “liberate the data and socialize the insights.” Bernard explained that a common trap some big brands experience is keeping insights siloed within teams or stuck in the customer insights department. She advised that marketers need to think about the cumulative impact of thousands of employees making better decisions because of those customer insights.