The Candid Voice in Retail Technology: Objective Insights, Pragmatic Advice

What Is Loyalty?

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Last Friday, we were having a burger’n’beer dinner at Jernigan’s Tap House & Grill in Nevada City, California (not far from our new home). The place is tiny – six tables and a well-used oak bar with just enough room for eight barstools. But aside from the chalkboard that lists the day’s hoppy brew selections, the biggest wall feature is a giant flat screen TV, that at that time was showing the baseball world’s champion San Francisco Giants playing the Philadelphia Phillies. And every available space (beside the space that we occupied) was occupied by someone wearing a Giants shirt and/or hat, cheering loudly because Giants slugger Buster Posey (if that isn’t a baseball player’s name, I don’t know what is!) had just smacked a line drive over the center field wall to give the Giants the lead.

Watching the whole scene, I was thinking to myself that here in a hole-in-the-wall pub 150 miles from San Francisco, was a demonstration of loyalty that any retailer (or frankly, any business) would envy. Can you imagine that kind of vocal loyalty to anything besides a sports team (okay, Harley Davidson comes to mind…)? But then on the other hand, why not?

Obviously, sports teams give something to their fans beyond the thrill of the occasional demonstration of outstanding athletic skill. It’s something that causes fans to stay fans through good times and bad. Some manufacturers (like the aforementioned Harley Davidson) command that kind of loyalty too. And believe it or not, so do some retailers – and it has nothing to do with a loyalty card or points accumulation scheme.

Identifying

People remain loyal to a Brand because they can identify with it. But it’s a two-way loyalty, reciprocated by the Brand. I was part of a crowdchat hosted by IBM last week, and a question was asked about retailers who do “omni-channel ” well. Immediately, someone offered up “Nordstrom “, just as in nearly any discussion of “great retailers “. It truth, the Nordstrom example is getting a little shopworn – how many times have we all heard it? One might think, based on how far and wide the mentions of the Seattle-based retailer are, that the company is international with thousands of stores. Wrong! The company operates only 115 “Nordstrom ” branded full line stores, and it wasn’t until recently that the company opened stores in Canada. But a whole lot of people know about them.

So what is it about Nordstrom that causes people to “love ” (a pretty strong emotion) the Brand? It may have something to do with the company’s original raison d’etre. I had the opportunity to ask Jim Nordstrom (at the time, co-president of Retail Operations) about that in the 1980’s, during a reception celebrating the opening of a new store in Walnut Creek California. When I asked Mr. Nordstrom why people loved the stores so much, he said (and I paraphrase), “it’s the shoes! The men in my family have big feet, and could never find shoes that fit – so my grandfather decided to solve the problem. “

And there it is – the retailer decided to solve a difficult problem for a specific group of people (men with big feet), and then replicated that over-and-over to more people with more lifestyle challenges, always staying focused on solving the problem.

People DO identify with certain retailers – the ones that identify with them. One of my favorites to mention is Cabela’s, a sporting goods company that operates about 70 stores in the U.S. and Canada. I mention the retailer frequently as an example of how different retailers fulfill different needs. In the case of Cabela’s, it is the need to “belong “. Customers identify themselves as “Cabela ” shoppers, just like certain motorcyclists identify themselves as “Harley Davidson ” people, or some guitar players identify themselves as “Gibson ” or “Fender ” players. And probably the strongest example is Apple- there are “Apple ” people vs. everybody else.

The Secret Sauce

Loyalty works when it goes both ways – customers will be loyal to the Brand when the Brand is loyal to its customers. There is no more powerful indicator of loyalty as when people talk about a Brand as “My <Brand> “, like “my Trader Joe’s ” or “my Target “, or “My Giants “. Whether for the most basic of needs (like putting food on the table), or the most extravagant luxury (like jewelry), when a brand is perfectly aligned to the people it serves, loyalty blossoms.

And that brings me back to the San Francisco Giants. I’ve been an Oakland A’s fan since the team moved to just across the bay from the Giants, in 1968. But the A’s are managed by Billy Bean of Moneyball fame, and it’s all about the numbers for Mr. Bean (I’ll save a discussion of the folly of managing only to numbers for another day). One of the things that Oakland fans have had to get used to is not knowing the names of the players, because the moment a player reaches his market potential, he gets traded for some cash and a new bevy of untested players.

The Giants go the other way; they know that people identify with players for all kinds of reasons, and so they keep them sometimes long after their prime- and then they lionize them in their retirement. And that’s why at Jernigan’s last week there was even someone wearing a “Mays 24 ” jersey, even though the great Willie Mays retired in 1973.

As corny is it sounds, retail brands should aspire to that kind of loyalty.

Newsletter Articles June 9, 2015
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