Nicole Miller Fashions a Rewarding Omnichannel Experience

Charles Darwin could have been writing about the retail industry when he penned his famous quote, “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” In recent years, change has been practically the only constant in an economic and technological climate that has wreaked havoc on — or even eliminated — more than a few longtime retail industry stalwarts.

Many apparel retailers are doubling down their efforts on loyalty as a means of remaining not just relevant to core customers but also competitive in attracting new shoppers. Despite the interest and activity in loyalty, however, a great number of programs remain undifferentiated, uninspired and un- (or under-) productive. According to EKN’s Customer Loyalty in Retail report, the average American household holds memberships in 18 different loyalty programs, in some sense obfuscating the very notion of loyalty itself.

While loyalty is inherently an emotional concept — SAS research shows that 82 percent of consumers are more likely to purchase from a brand for which they feel an emotional connection — a large number of retailers’ loyalty efforts remain by their very nature transactional: you give me your money, and I’ll give you some combination of points, discounts or promotions as a reward. (Yawn.) And with many shoppers pressed for cash these days, it can be difficult for consumers to justify the brand premium attached to, say, their preferred pair of jeans at a favorite retailer, especially when the very same item is available elsewhere for significantly less (ahem, Amazon, eBay, Gilt) according to the EKN report.

It’s fair to say that brands and retailers now are looking to capture and keep their customers by improving the shopping experience across the board, and omnichannel has become a formidable weapon in the customer experience arsenal. “Omnichannel has evolved into being customer-centric versus channel-centric,” Angela Sanfilippo, CMO for multichannel engagement platform PunchTab, said in a recent webinar for Loyalty360. “So it’s really about creating a very relevant and consistent experience across whichever channel a consumer may be engaging with you on.”

Silos, begone
Breaking down silos across the enterprise is one giant leap forward for iconic American fashion brand Nicole Miller, which often dresses celebrities including Jessica Simpson, Angelina Jolie and Halle Berry and operates three boutiques in addition to its wholesale and ecommerce businesses. The company chose the Darwinian route of adapting to today’s shifting times and earlier this year relaunched its ecommerce site, bringing it in-house from a third-party provider to create a more robust and customer-friendly experience.

Nicole Miller also rolled out Capillary Technologies’ CRM platform, which essentially talks to both the Magento ecommerce platform and the boutiques’ Retail Pro store software so that the company has a better view of customer data in its various channels.

With ecommerce now integrated into physical store operations, customers can more easily transact in the channels of their choosing. “The ecommerce business was very disjointed from retail,” says director of ecommerce and retail Andrea Marron. “Our goal is to tie ecommerce and retail closely together, not only in terms of our business strategy but also in terms of data.

“Like so many retailers, our retail stores have one database and ecommerce has a separate database, but we have customers who shop across both,” she continues. “We wanted to make it a seamless experience for our omnichannel customers, whether they shop online or in store.”

Nicole Miller is throwing much of its resources behind ecommerce. “Before we started to focus on our omnichannel strategy, we were shrinking our focus on retail,” explains Marron, adding that the company previously operated a larger fleet of boutiques, shuttering several of them over the years. “But now that we’re wrapping retail into our ecommerce business, the focus on the direct-to-consumer business overall is growing. Now there’s a big focus on our direct omnichannel customer experience — customers interacting directly with the brand instead of going through a wholesale partner.”

Implementing Capillary’s CRM platform was a key step in another big project for Nicole Miller: launching a loyalty program through ecommerce (with a goal of getting it in stores by early 2014, Marron says). “We’re one of the only fashion brands that has a loyalty program on ecommerce,” she claims. “A lot of retailers do it, but we may be the only fashion brand that has a loyalty program online.”

As the customer-facing avatar of retailers’ customer engagement strategies, according to the EKN report, loyalty programs should be the “language of the cross-channel experience.” “Today, retail loyalty programs are guilty of being expense accounts for discounts and promotions,” research director Gaurav Pant writes in the report. “Done right, they can create the sticky differentiation retailers are striving for.”

At Nicole Miller, loyalty is a combined effort between the ecommerce, marketing and public relations teams, although Marron says her group takes the lead. “Our e-comm team is into whatever is new and innovative — that’s what drove our decision to start a loyalty program,” she adds. “The challenge for us was making sure, because we’re a luxury brand, it didn’t sound like, ‘Oh, go over to Duane Reade and use it toward your next toothpaste purchase.’ That’s why we called it VIP Points, to sound a bit more elevated.”

Nicole Miller automatically enrolls shoppers who create an account on the website into the VIP Points program. Customers can use the first batch of freebie points awarded for enrolling — 200, or $20 — right then and there. So far the program has been a success, with “really strong uptake,” according to Marron.

As obvious as it sounds, informing shoppers about the VIP Points program and its benefits has helped enrollment and redemption numbers inch higher. That education component is critical; EKN’s loyalty report shows that a staggering 81 percent of loyalty program members are ignorant about program rewards, or how and when they’ll get to reap said rewards — which begs the question of why consumers bother enrolling in the first place if they’re in the dark about what they’re getting in return for offering up their personal data.

“At first not that many customers were really using their loyalty points because we weren’t educating our customers about it,” Marron says. But a few well-timed email campaigns and more effective promotion on the website has gotten customers’ attention. A VIP Points link in a small, unceremonious font lives at the top left-hand side of the navigation bar on the website, nestled next to the utilitarian store finder link.

“We’re making sure they’re getting regular updates about VIP points,” says Marron. “We're noticing customers coming back for the third and fourth times using those VIP points.”

Checking the boxes to drive loyalty
Retailers responding to the EKN loyalty survey cited customer service (57 percent), product availability (52 percent) and store experience (45 percent) as the top factors that drive loyalty today. With enhanced communication between ecommerce and physical stores, Nicole Miller is in a better position to improve on those three fronts as well.

The brand’s traditional business model emphasized selling apparel that stores have on hand, so if a particular style was out of stock at a boutique, the customer (and the associate, or “stylist,” selling on commission) was simply out of luck. There previously was little to no incentive for the stylist to check inventory on ecommerce and sell an in-store customer whatever was available online. In other words, the brand’s technology, or lack thereof, was getting in the way of the business. Capillary has changed all of that.

“I want our stylists to be incentivized no matter if our customer is shopping with them or online,” explains Marron. “If we don’t have something in the store and the stylist knows we have it online, we want the stylist not to have any hesitancy toward selling it to the customer. Using Capillary will allow us to come up with an incentivization structure for stylists where they can sell products that we have available online.”

Marron points out that the online team faces similar pressures. “Our ecommerce people feel, ‘Why would I send a customer to a store because they should be shopping with me because I need to make my monthly goal?’”

In addition to enhancing the store experience by selling across channels, Nicole Miller can now keep customers happier by accepting ecommerce returns in the store. In the past, when the store and web businesses were siloed, stylists were forced to turn away customers who wanted to return an online purchase at a boutique because they simply could not access ecommerce purchase histories. “That’s a terrible customer experience — to have someone send you back to the ecommerce site,” says Marron.

“Now it’s all going to be integrated, so the stylist can pull up the Capillary system and see the order history.”

What’s more, the stylist can identify whether the shopper is a VIP big spender, a loyal Nicole Miller customer or a new customer and “tailor the way they deal with that customer based on that,” adds Marron. For example, a stylist may be more lenient with policies toward a longtime brand aficionado — accepting a return well past the standard timeframe, perhaps — which can go a long way in cementing customer loyalty.

Nicole Miller has also jumped on the same-day delivery bandwagon as a way to offer a better boutique experience — and increase conversion. “We realized with all these new and innovative retail models out there we should do something, too, to get the product to the customer faster,” Marron adds. The brand’s same-delivery pilot is underway in New York City, which features boutiques in SoHo and on Madison Avenue serviced by a warehouse in Long Island City, Queens.

“Our warehouse staff will be able to deliver something same-day to a customer who, for example, has an event that night,” says Marron. “Having stylists incentivized to also push ecommerce sales helps everybody out because they can get product to customers that same day if the inventory is not available in stores.”

Stylists in the tourist-heavy SoHo boutique were particularly excited for the same-day delivery launch. In the past boutique associates could only offer to have out-of-stock items available a few days later for in-store pick-up, which often wasn’t a viable option for travelers who were scheduled to fly out the next day, Marron explains. The same-day service will be a critical tool in closing sales and ensuring those deep-pocketed shoppers don’t take their business elsewhere or leave disappointed.

Although Nicole Miller has been proactive about emailing customers about their points status, the brand toes the line when it comes to promoting the loyalty program. “Because we’re a luxury brand we don’t want to always be talking about our promotional-type deals on our social channels — we want to be engaging our customers more with content,” Marron says.

The brand uses social media to help steer consumers into the Nicole Miller funnel, and once they’re in, then it’s appropriate to email and educate them about the VIP Points program, explains Marron. “It’s not something we’re constantly pushing. We’re careful about not saying ‘Sale, sale, sale’ or ‘Points, points, points’ all the time in our social channels.

“It’s about the elevated brand image, and it’s an internal struggle — whether or not to promote the loyalty program,” she says.

Aiming for a bullseye every time
Now that Nicole Miller’s systems are synced up thanks to Capillary, the ecommerce team can better target its customers and segment email lists. “If we only look at ecommerce data, it’s probably an incomplete picture of what that customer is purchasing or is interested in — what their behavior is like,” explains Marron.

The brand sells a signature Sandy skirt made from cotton and metallic fibers, for example, that features an easy fit and “kind of wrinkly” design, making it a natural choice for the jetset crowd. “You can throw it in your suitcase and not worry about it,” Marron says. “Some people come back and buy that same skirt in a different color. So if we’re only seeing an incomplete version of their purchase history we might not necessarily know that’s what they’re doing.

“With the Capillary tool we’ve got the complete picture, and next season when the skirt comes in in a different color than they already have, we can send them an email and let them know,” she adds.

That’s just one example of Nicole Miller’s efforts around hypertargeting email campaigns. The ecommerce team conducts a lot of research, looking at each customer and how many orders she’s placing, segmenting accordingly and shooting out a reminder that she has rewards points waiting to be used and maybe she should check out the slinky new arrivals.

“Our newest thing is getting as detailed as possible looking at a specific person, what she has purchased, and how she has arrived at our site,” Marron explains. Some even get a personalized email from a customer service staffer. If an L.A.-based customer bought Nicole Miller beachwear last summer, for example, she may receive an email featuring a similar garment from the current collection.

These hypertargeted efforts are driving serious results. Whereas the usual email click-through rate hovers around 15 percent, says Marron, the rate for highly personalized messages has reached 60 percent.

“People are talking about Big Data and ways to use it — but it’s still about the individual and making that person feel special,” Marron explains. The key to unlocking Big Data is “looking at it in a really detailed way, and then maybe we’ll glean something bigger that we can use on a bigger scale.”

Recently Nicole Miller has had trouble generating foot traffic to the L.A. boutique, in addition to trying to reach a younger demographic. Marron and her team hatched a plan to get traffic up — and move shoppers from one channel to another. “I sat my entire team down in a conference room and we all wrote 200 hand-written notes to all of our ecommerce customers who have shipping zip codes that are near our L.A. boutique,” says Marron. “We wanted to thank them for shopping with us online so we sent them a $50 gift card to our West Hollywood boutique.”

The brand is exploring the possibility of creating a higher VIP Points tier for its highest-spending customers that offers more loyalty points or a greater benefit of some sort. Nicole Miller currently rewards its most valuable shoppers with early access to sales, notes to thank them for their patronage, and occasional gifts with purchase. But Marron says the company can take a cue or two from its pair of licensed stores in Philadelphia (there are two other licensees in Atlanta and San Diego), which are operated by a well-connected style maven prominent on the social scene.
“They will do special shopping events — they bring customers to the showroom and let them preshop the line before it goes in stores,” explains Marron. “Those licensed stores are really great at cultivating their communities. We need to get better at it, and we’re making key hires to start to work on that specific aspect.”

Jessica Binns is a Washington, D.C.-based contributing writer for Apparel.
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