Shoe retailer boosts marketing efforts and sales results

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In today’s competitive retailing landscape, “mass-market communication, or the ‘batch-and-blast’ approach, really has gone by the wayside,” says Scott Baldt, senior director of omnichannel with Rack Room Shoes and Off Broadway Shoe Warehouse.

“Consumers want targeted, relevant communication,” Baldt says. “They don’t want an inbox that’s full of information that either doesn’t pertain to them or isn’t accurate.”

Rack Room and Off Broadway are both part of Deichmann SE. Headquartered in Essen, Germany, the company is a leader in the European retail shoe market. The U.S. divisions are based in Charlotte, N.C., and together have about 500 stores.

By working with Salesforce, a provider of customer relationship marketing systems, Rack Room and Off Broadway have customized and enhanced marketing messages, streamlined marketing processes, cut expenses for outside vendors and boosted the revenue coming from their most loyal customers.

The right content

Rack Room launched its loyalty program in 2013 with “mediocre” results, Baldt says. Because the customer data captured by Rack Room and Off Broadway was scattered across disparate systems, it was difficult to use effectively. While the company was capturing many customer emails, they were using them inefficiently, such as batch-and-blast emails, he says.

The companies had previously worked with outside vendors, which made it a challenge to craft tailored marketing messages. Not only that, the partnership accounted for a growing portion of the overall marketing budget. “As our loyalty program and email base grew, our year-over-year email marketing expense was increasing by nearly 40 percent,” Baldt says.

After looking at multiple software systems, Rack Room turned to Salesforce Marketing Cloud for its scalability, level of automation and ability to send similar communications across multiple channels, including email, text or push notification for those who have downloaded the mobile app.

“We’re able to not only send more regular campaign communications, but we’re able to include individual customer information. That’s more emails we can send with more accurate and relevant information to consumers.”
— Scott Baldt, Rack Room Shoes and Off Broadway Shoe Warehouse

Through its powerful data management capabilities, Marketing Cloud allows marketers to know more about their customers, so they can engage them across channels and personalize their experiences, says Shelley Bransten, senior vice president of retail and consumer goods industry solutions. “They can power one-to-one consumer journeys across email, mobile, social and advertising, uniting marketing, sales, commerce and service,” she says.

Because consumers use so many touchpoints now, retail marketers find it difficult to reach each shopper with the right content at the right time, Bransten says. With Marketing Cloud, retailers have visibility into each shopper’s entire journey, whether it occurs on the web, mobile devices, social media or in-store. They’re able to tailor their communication based on these interactions.

Rack Room began implementing Salesforce in July 2015 and sent its first emails through the platform by October. “It was a surprisingly quick process,” Baldt says. The team hit all milestones, with few delays.

During the implementation, two full-time customer relationship management employees were dedicated to the project, as well as a part-time IT employee and several outside partners. One outside agency, Digital Fusion, also provided a nominal amount of training. Other than the Salesforce system, no additional software or hardware was required, Baldt says.

Benefits

Another Salesforce system, Journey Builder, enables Rack Room and Off Broadway to automate marketing communications. Journey Builder allows retailers to map a customer’s path, starting with a click on an online ad, to purchase, to engaging in future purchases. Salesforce is cloud-based, and integrates with most major enterprise resource planning, inventory and point-of-sale systems.

The automation provided by Salesforce has been key, Baldt says. Previously the many manual processes limited the ability of Rack Room and Off Broadway to tailor and target their marketing communications. Now, however, the brands have more than 30 different “journeys” running through Journey Builder.

Within the communications, the companies can include information about their rewards program. Customers earn a reward after a certain number of accumulated points and can apply it to their next purchase within 90 days. When customers are 60, 30, 15 and seven days from the expiration of their rewards, they receive automated reminder messages.

The ability to include rewards messaging as a part of the regular communications raised awareness of the program and allowed it to grow much faster than anticipated.

“We’re able to not only send more regular campaign communications, but we’re able to include individual customer information about their point totals, their near-threshold level and their earned rewards,” Baldt says. “So, that’s more emails we can send with more accurate and relevant information to consumers.”

Customers who redeem their rewards are automatically removed from the data set that triggers the next communication in the series. “These messages have helped increase reward redemptions and driven engagement with our loyalty program,” Baldt says.

The automation available through the software also reduced the time required to build and issue various marketing communications by about 40 percent, Baldt says, or almost two days. This covers the time required for the marketing team to deliver the assets, and the time required to create, target and code the email so that it renders appropriately on all devices, as well as the quality assurance process that ensures the message is correct.

“We were able to increase the frequency of our communication with more relevant information,” he says.
In addition, prior to the implementation, Rack Room and Off Broadway each had separate email platforms. Employees working with both brands would have to log into and out of each system. Now, they can easily switch from one to the other.

Because the two can now capture mobile numbers much faster at the point of sale, their loyalty program capture rates increased significantly. “With use of Journey Builder, we were able to send SMS messages to capture emails from consumers. Not only did our total member base start to climb fairly dramatically, but the number of emails we’re capturing climbed as well,” Baldt says.

Raising awareness

On average, companies that deploy Marketing Cloud see a 27 percent increase in campaign effectiveness and a 26 percent increase in the return on investment from their marketing efforts, Bransten says, citing the Salesforce Customer Success Metrics Survey conducted between 2015 and 2017 on 7,000 randomly selected customers.

At the start of implementation at Rack Room and Off Broadway, the percentage of business coming from rewards members was about 50 percent. It has since jumped to more than 70 percent, Baldt says. The ability to include rewards messaging as a part of the regular communications raised awareness of the program and allowed it to grow much faster than anticipated, he says.

Rack Room also reported an online revenue increase of 160 percent for email and 450 percent for text, while Off Broasdway reported a jump in online revenue of 44 percent for email and 290 percent for text. “The platform has and continues to allow us to leverage customer data to drive measurable results,” Baldt says. “Automation has allowed us to scale the impact.”

Going forward, Rack Room and Off Broadway are looking at ways to leverage consumer data across additional channels, including digital marketing and social media channels. “We are continuing to explore additional ways to employ the platform and the approach to impact our business,” Baldt says.

Karen M. Kroll is a business writer based in Minnetonka, Minn.

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