Article

Merchants shift priorities to better serve today's consumers

London-based multinational retailer Marks and Spencer describes how it created a new loyalty program.

January 25, 2016 by Will Hernandez — Editor, NetWorld Media Group

Marks and Spencer, a London-based multinational retailer, last year decided to give its customers a say in how the company revamped the its loyalty program.

Marks and Spencer recruited some 100,000 of its customers to help craft the new program, called Sparks. In the end, the retailer created a new customer-centric membership club that it hopes will change how Marks and Spencer engages with its most important asset — the customer.

"Customers are no longer kings; they're omnipresent gods," Patrick Bousquet-Chavanne, chief marketing officer for Marks and Spencer, said during a keynote session last Monday at the National Retail Federation Big Show in New York City.

"Consumer empowerment is not a trend. It's a tectonic shift in the business," he said.

Bousquet-Chavanne believes that consumers today exhibit several key characteristics that retailers cannot afford to ignore.

Today's consumers are technology empowered; they want to be part of something bigger; they're fatigued by irrelevant offers and discounts; they want a choice in how they engage with retailers; and they have hightened expectations of brands and services.

Marks and Spencer's response to this was to create Sparks to convert the occasional customer into a "member."

"As a member, we know you much better as a customer, and you get two-way communication from us," Bousquet-Chavanne said. "It's a relationship with engagement, and members enjoy more choice and interactivity."

But Bousquet-Chavanne said that such an effort did come at a price for the company.

Marks and Spencer realized that it had a "one-time chance" to reevaluate its loyalty program — and that infrastructure improvements would be required in order to better serve customers.

"What was important to us was to put into place a system to be more agile and future-proof the business," Bousquet-Chavanne said. "The way the consumers are moving, it's worth it."

Because this change happens as quickly as it does, some of the world's largest brands have come together to provide a set of guidelines and best practices for navigating the shift.

During the same keynote session, Kees Jacobs from Capgemini introduced the Consumers Goods Forum to the audience. The organization's goal is to "bring together consumer goods manufacturers and retailers in pursuit of business practices for efficiency and positive change across our industry benefiting shoppers, consumers and the world — without impeding competition."

Jacobs said the organization recently published a code of conduct for customer engagement. He believes such an effort was needed as data breaches and privacy concerns continue to be top-of-mind with consumers.

And if consumers have all the power with retailers, it's best for the industry to do what it can to foster a good relationship.

"At an industry level, it's important to take action," Jacobs said. "Retailers are falling short with consumer engagement and trust is at stake."

About Will Hernandez

Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of MobilePaymentsToday.com, he spent two years as the content manager for PaymentsJournal.com, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago.

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