How are brands investing in crucial digital tools and traditional methods to reach customers?
During the struggle to secure a dwindling sense of brand loyalty among Millennial and Generation Z consumers, brands must devise a comprehensive strategy to tell their stories. As these companies invest in tools to create more-personalized experiences through forging strong relationships, they are exploring new technologies yet returning to traditional methods of promoting the products they make and sell.
As brands explore the new consumer culture through developing a formula based on a strong e-commerce presence, effectively wielding social-media tools and investing in bricks-and-mortar options such as pop-up shops, we asked financial experts: As brands attempt to evolve by finding ways to attract consumers, what investments are your clients making to promote an effective experiential shopping environment for their customers, and how do they plan to use these tools?
Darrin Beer, Western Regional Manager, Commercial Services, CIT
Experiential shopping is a tremendous opportunity for retailers to reinvigorate the in-store experience and perhaps reclaim market share. People have long regarded shopping as a form of entertainment, and today’s retailers are taking that idea to the next level by offering in-store events, demonstrations, classes, even food-and-beverage service. Many brands and manufacturers are supporting these in-store experiences by providing some of the programming—and, in some cases, the personnel—to make these events possible.
Some of our clients in the activewear sector provide in-store yoga or spin classes as a way to promote the healthy lifestyle associated with their products. Other clients have utilized influencers for in-store appearances as a way of attracting customers to their stores. The stores themselves have been designed with creative and immersive spaces for Instagram postings to inspire social-media sharing. Yet another strategy has been to sponsor in-store charitable events that connect to the brand while promoting community engagement and increasing foot traffic.
In essence, enhancing the in-store experience is limited only by the imagination. Few retailers would turn down the opportunity to make their stores a livelier and more compelling destination for shoppers. Smart brands and manufacturers would do well to collaborate closely with retailers that sell their products in ways that enhance their in-store offerings, displays and demonstrations to pull customers into stores more often and keep them there longer once they arrive.
Mark Bienstock, Managing Director, Express Trade Capital
Between social media and influencers, our clients can reach an extremely large amount of the population more effectively than ever with the swipe of a finger. Social-media platforms are some businesses’ main source of sales. These mobile applications allow consumers to browse and shop anytime, anywhere. Instagram has a “swipe up” feature as well as the ability to tag a product that brings you directly to where you can then complete a purchase. These companies pay influencers to promote their products, and, if the consumer likes what they see, within minutes they can easily own the same products as their favorite influencer. Social-media platforms have become the new way for companies to see a quicker ROI. If a brand pays for a celebrity to wear their product and they have enough of a following it may even be possible for the product to sell out before the end of the day.
Sponsored ads are also an efficient and easy way to promote sales. Sponsored ads are tailored toward specific users while scrolling, offering deals and promotions. Not only do these ads promote sales, but they also increase brand awareness, lead generation and traffic to their website. These types of promoted posts can also be targeted to a specific demographic of people, not just limited to age or location but likes and interests as well.
Those clients that are at the forefront of this ever-changing social-media dynamic will be the true winners, while the companies with their head in the sand will see the opportunities pass them by quickly.
Gino Clark, Executive Vice President, Managing Director, Originations, White Oak Commercial Finance, LLC
As the use of technology increases and consumer access to information grows, the distinction between brand and merchant blurs. Technology has led to the emergence and growth of new distribution channels, and the merging of the physical and virtual worlds places a heightened focus on the overall consumer experience. Author and scholar Barbara Kahn wrote an interesting book, “The Shopping Revolution,” that highlights the importance of incorporating technology to enhance the consumer experience.
Successful companies take control of their brand and messaging by investing in an array of channels including social media as well as the use of strategic partnerships with influencers and retailers. Our clients have capitalized on new online tools such as Instagram’s embedded shopping feature, which helps to reach new customers and to reconnect with existing buyers. They also partner with companies who use varied distribution channels to enhance the overall shopping experience by making it unique and effortless.
No matter the specific tools chosen, it is essential for companies to blend established and new technologies to build their brands by actively engaging the consumer.
Eric Fisch, Senior Vice President, National Sector Head, Retail & Apparel, HSBC Bank USA N.A.
Consumers are constantly exposed to brands across all physical and digital mediums, which makes it harder to maintain brand loyalty. In order to overcome this, I have seen companies refocus and invest in a better client experience that relays the brand ethos. This includes store build-outs with authentic fixtures and décor to evoke the aesthetic of the brand. This is harder from a wholesale perspective, but we have seen brands have success with shop-in-shops and concessions at department stores, where they can better dictate the layout and customer experience. This authenticity is harder to relay to the at-home shopper. This is why many digital, native brands are investing in catalogs and direct mail. It’s a way to allow the client to have a tactile relationship with a brand, despite not visiting the store, and can be targeted to areas and demographics.
Joshua Goodhart, Executive Vice President and National Sales Manager, Merchant Financial Group
Many of our clients are trying to find creative ways to attract new customers. As we all have seen, the traditional wholesale model has been extremely challenging, and many businesses are investing in e-commerce and different retail platforms to increase brand recognition and expand their growth.
Businesses that were predominantly wholesale are now investing their profits and capital into their websites, direct marketing and social-media expansion. We have advised our clients to transition with caution and prudence to avoid burning through monetary resources quickly.
While some of our clients have listened, many others have overexposed themselves, which has generated losses. Merchant has found that the companies who have invested wisely in their direct-to-consumer infrastructure have been far more successful than those who have aggressively attacked this new, unfamiliar platform.
To attract new customers and expand brand awareness, many companies continue to invest strategically in pop-up shops or brand collaborations. We feel this is an intelligent way for brands to dip their toes into the retail climate without the added fixed overhead of contractual expenses. This approach gives the business a short-term “energy shot” of cash and brand awareness.
Merchant always encourages our clients to sit down with us and discuss strategy. To accommodate our clients’ needs, Merchant often expands upon working capital facilities to facilitate the company’s needs. Concurrently, we work with our private-equity and venture partners to ensure success is achieved according to the wholesaler’s investment plan. To adapt successfully to the changing retail climate, it is pertinent for companies to align themselves with experienced partnerships and advisers well versed in the sector.
Rob Greenspan, President and Chief Executive, Greenspan Consult, Inc.
The biggest investment that I see my manufacturing and import apparel clients making to attract customers is on the e-commerce side of their business. The goal is to continue to attract, retain and grow their e-commerce revenues. My clients are investing in improving their e-commerce platforms, technology and visuals to make their customers excited about buying their products and continue to invest in new e-commerce strategies with the goal to add new customers. Some of this requires the use of third parties to do the work, and others are hiring in-house personnel to help this process.
Additionally, my clients are constantly investing in upgrading their technology to make the “buy” as simple and as easy as possible with less keystrokes, increased speed to buy and with no interruptions during the process.
Sunnie Kim, President and CEO, Hana Financial, Inc.
The apparel industry has witnessed the successes of retailers and manufacturers who have integrated consumer data into their corporate strategies. Businesses that have implemented statistical analyses in their nascent stages have proven to be resilient in the turbulent era of e-commerce, utilizing the data not only to guide the business but also to track consumers’ habits and to predict trends moving forward. Computational statistics allow us to determine the average consumer’s spending habits, allowing businesses to keen on consumers’ demands and to better appeal to an audience.
Additionally, a brand must constantly reassess its identity by reviewing the feedback provided by its consumers. This feedback can reveal exactly where the business needs to focus on not only to keep satisfying its current audience but also to appeal to new ones to build. As the science, technology, engineering and math fields begin to permeate more facets of society beyond traditional career paths, statistical analysts are beginning to thrive by incorporating computer science and artificial intelligence into fields where the subjects had been largely ignored before. It is this saturation that will lead to the next wave of entrepreneurship that will utilize not only creative but also analytical strategies to spearhead campaigns to captivate audiences in the dynamic world of consumer tastes.
Robert Meyers, President, Republic Business Credit, LLC
All of our clients are in experimentation mode with the aim of building stronger customer relationships. None of our clients are relying solely on a wholesale strategy to meet their growth needs. Back in the day, your brand strategy could be achieved through a combination of product offerings at distinct price points for a major, independent and possibly some direct-to-consumer offerings. Those days are gone. It is currently about well-intentioned interactions with your customers across several mediums. The desire of brands to provide an omni-channel experience is easy to say but difficult to execute.
Larger brands such as Nike, Levi’s, Ralph Lauren and Budweiser have the resources to provide large-scale experiential-marketing services such as Bud Light providing the city of Cleveland locked coolers that they could only open with a victory by the Browns. Smaller brands do have options in this area, as experiential-marketing and -consulting firms have popped up across the country to help with the creative design and implementation options without having a full-time team. We funded two experiential-marketing companies earlier this year that support the entrepreneur ecosystem.
The most consistent investments are in social media and e-commerce. As we saw with the Fyre Festival, the power of social media is undeniable. Despite the fraudulent side of that event, it revolutionized and confirmed the power of social-media influencers. Some influencers happen to use your product where others are offered free product, perks and benefits to help promote on Snapchat or Instagram to their followers. Using targeted marketing strategies and browser cookies, you will notice that as you switch between social-media apps and websites, the firm you “liked” will follow you around while its rival products will follow you with discounts/ads with the aim to encourage your buying behavior.
Dave Reza, Senior Vice President, Western Region, Milberg Factors
Both clients and prospects alike are crafting, or already have crafted, “customer-experience strategies.” In order to provide customers a unique experience, brands have invested in tools to make sure that customer communication is interactive, simple and flexible across all channels, making sure that there is a convenience factor to the communication and—more importantly—purchasing.
In order to capture and expand their customer base and market share, our clients are performing much more consumer and market research and data gathering. They are utilizing online ads on social media. They are also utilizing influencers and bloggers to promote and track customer preferences, often gifting product and or monetizing their “hits” based on sales data.
Kevin Sullivan, Senior Vice President, Regional Credit Manager, Commercial Services Group, Wells Fargo Capital Finance
Today’s consumer has more choice than at any point in time by virtue of the ability to connect with consumer-product companies located anywhere in the world. Given the exceptional buying options this environment creates for consumers, there is little doubt that the ability to create experiences around product can play an important role in a company’s success. A company’s website needs to do much more than simply illustrate what product they’re selling. Companies now invest heavily in content creation, whether through internal sources or external companies who specialize in it, to create an experience for a visitor to their site. The experience has to be perceived as authentic by the consumer.
We also see companies aligning themselves with influencers who can help further connect them to their target customer base. In some cases, we see companies creating specific lines around the influencers. We’ve seen this work particularly well in the beauty segment, but it’s also become very prevalent in apparel. Consumers have become very accustomed to following specific influencers within various platforms on social media, with key influencers sometimes attracting millions of followers. If an influencer attracts a certain segment of the marketplace that appeals to consumers of a certain product, that can have significant value for a brand. The nature of the relationship between the influencer and a brand can vary widely, with compensation ranging from product to modest monetary compensation to a percentage ownership in the company producing the product.
We’ve also seen apparel brands take a more active role in merchandising their product on a retailer’s floor to create a better story for their customer. This can come in the form of simply having a closer relationship with a major customer who enables the brand to replenish product based upon sell-through or full departments within a retailer that are specific to a given brand, enabling the brand to tell a more complete story around their product.
Ken Wengrod, Co-founder/President, FTC Commercial Corp.
The company or designer needs to truly understand who the ultimate customer is—the consumer and demographics they represent. It is imperative that the targeted consumer is shopping with their emotions instead of their wallets. The platforms need to create an experience for the consumer that is authentic and expresses individuality. Today, consumers contribute to brand loyalty when they are emotionally connected to the legitimate story of the brand, what it stands for and its merchandise—in that order.
Once all this is determined, through proper feedback via focus groups and chatbots, they should develop a multi-channel distribution system, bricks-and-mortar, social media and online to maximize exposure of their merchandise. The consumer-related company should also utilize the Internet of Things, such as employing interconnected devices such as Alexa and Siri.
The ultimate goal of the manufacturer is to develop innovative process flows that will significantly reduce overhead and maximize productivity through automation by utilizing the most efficient data transformation available for this ever-changing technological landscape. They will need to consider using distributed ledgers such as blockchain technology for validation and optimization purposes as well as fuzzy logic for structuring a process flow from conception to market to the consumer. This of course would include the entire supply chain.
Artificial intelligence–based applications adapted to create machine learning will drive business operations for better decision-making. Apparel companies will need to develop programs and properly mine their data so they can maximize predictive analytics. AI should be used to maximize productivity, reduce overhead and provide information to better understand their consumers and reach a wide, targeted consumer audience via IoT and other systems to expand sales.