Retail Solution and Technology that recreate ‘Customer Loyalty Programs’

Customer engagement for the Sports garments and athleisure product segment is extremely important for retailers to ride the COVID high tide. Even though its resilience to the scenario, a lot has changed in the consumer front who are considering much more than they previously did while shopping for a product- both online and offline. So, if the retailers didn’t keep pace with it, they would gradually dwindle. While customer loyalty programs continue to be the most favorite spot for buyers, it is not restricted to it. With the outbreak of the pandemic, these loyalty programs are often transaction-focused rather than being just price-focussed.  In other words, it is more about making the buying process easier for the clients- contactless, no returns, free shipping or same-day shipping, extended return periods, and the likes. 

For instance, consider this survey conducted by the Bank of America. It revealed that 64% customers outweigh UX over price, which means people want to be engaged and have a meaningful relationship with their favorite store instead of getting good deals.

Now, the BIG question is how does one make that possible?

Let’s get this right first

Customer loyalty is a part of customer engagement. Simply put, more the engagement, more the sense of belongingness among the customers, which prompts them to purchase even more. Retailers have realized that and focused all their attention on how to increase customer engagement. Customized discounts and offers are merely a case in point. But what’s the algo behind offering that? And how are retailers able to reach a conclusion when it comes to targeting a particular set of customers for a particular offer?

The answer is in the following paragraphs.

Software as a solution in building customer loyalty

The retail software solutions that are fast picking up pace in the Athleisure retail industry all aim at customer retention through customized buying solutions. And to help retailers reach that point are advanced technologies that help:

  • Learn more about customers, thus helping them target the latter directly through loyalty discounts and bonuses
  • Build retail membership programs that boost the debut of an online store. Customized loyalty points and discounts are the best way to advertise the launch of a new store. This helps ensure that customers continue to stick around.

Interestingly, sports garment and leisure product companies are aiming to provide both to their customers and the technologies they deploy include AI, ML, Big Data, and others. In the following sections, we will discuss how these technologies have revolutionized UX and in turn brand reliability and sales.

Technologies in trend for enhancing customer engagement

What is a retail software solution? In this era, it is all about an advanced algorithm that goes into ensuring that customers get what they want. Post-COVID, the emergence of powerful technologies will be in full thrust in the Athleisure industry as it warms up to the “(NEW) CUSTOMER” who is the “KING OF HIS OWN CHOICES”.

The technologies we have listed out below not just enhance data crunching for better customer responsiveness, but have also empowered knowledge-based decision-making on the part of the retailers who wish to give the best to their customers. 

Artificial Intelligence: 

Sports retail has gained from this technology in many ways, especially when consumer behavior demands an enhanced shopping experience sitting at home. It has augmented that, providing a real-time, real-life digital experience of the products people see online, but has also helped in understanding customer behavior and predicting the upcoming trends, helping stores be prepared for a surge in demand. Certainly, walking out of a (physical or virtual) store empty-handed is a thing of the past.

But, that’s not all. Customers can not cite their concerns, grievances, and preferences as easily as they have been doing with a store manager. The only difference is these can now be heard and acted upon online too, engaging customers in the quality control of a retail outlet.

-This is how AI improves customer engagement

-Conversational commerce: 

With the advent of chatbots, AI enables the process of natural language used by users to understand his/her requirements. Coupled with cognitive computing and conversational commerce, it increases retail accessibility, thus driving revenues.

Once the chatbot receives the details of a customer query, it processes it to understand the demand, which is when there’s a need to deploy advanced AI-enabled tools like:

-Predictive Analysis: 

Advanced software recommendations are required to get this implemented for best results. Data Analytics, the algo behind predictive analysis helps in analyzing the patterns of customer behavior with the help of historical data and the conversation that is being carried out between a chatbot and humans. This helps build buying strategies and create opportunities for the organization to address those buying trends well in advance. And if there’s a grievance, that’s responded to as well to make the customer feel heard.

Next comes:

-Advanced Analytics:

 This empowers merchandise production and movement of manufactured goods, that too fully automatically. This not only helps in streamlining the manufacturing line but also frees up the human workforce with the help of automation, thus increasing the time-to-market rate and order-fulfillment rate that are major determinants in customer satisfaction, leading to increased engagement. 

But, AI creates a packages deal here too by:

-Creating basket clusters: 

As a result of AI/ML implementation, baskets are the best way to show that you care. For instance, if the customer is looking for a jogging suit, depending on his budget and choice, retailers can provide them with combination buys they can opt for. A popular practice with Amazon, this trend not just improves sales, but also enhances customer satisfaction when there’s a discount on the cluster. Better still, it tells the customers that “we know who you are and your choices”- make them feel important.

However, all of the above steps would merely be marketing or sales gimmicks if the customer doesn’t feel safe. AI has a solution here too.

-Fraud and Anomaly detection: 

Digital retail security is prone to hacking. With AI-enablement, both the buyer and seller information are secured. As a retail software solution, it can evade several areas of fraud such as money laundering, abuse of returns, and cash anomalies. This is done with ML capabilities that analyze variant data sources.
After all, better reliability is a natural booster for customer retention and increased footfalls. But, let’s go a little further than what we have discussed because life and the times demand that technologies be optimized to the fullest not just for data crunching but also for making customers smile in fun ways.

So, here’s more addition to the list of technologies that have helped retailers done that.

Augmented Reality: 

Ever heard of IKEA giving its customers the experience of walking down the aisles of the physical store, only within the proximities of home? Well, that’s the kind of future we are talking about. Athleisure buyers have already started seeing how this works.  They can now see how stretchable, how comfortable a given pair of sweatpants is, watching it flex, run and jog virtually on a model. From smart fitting rooms to beacons and smart catalogs, customers can now see how the product will be useful for them before buying. 

Isn’t that a great way of engaging customers? This can further be elucidated with the fact that more than 70% of consumers expect retailers to launch an AR app during COVID times to make shopping decisive, safe, and comfortable. The retailers are divided in their practices on this one. While one-third is eager to hear the customers out and implement AR, two-third of them see it as a blind spot because they feel they have to make added investments. It goes unnoticed that the advantages of AR implementation by far exceed the cost involved in the same. 

For instance,

-Reduced returns from customers

Here’s a major difference that AR as a retail software solution can have while shopping online. While it is possible to return or exchange products in real-time in a retail outlet because customers can try out products before buying, there’s hardly that opportunity while buying online. Moreover, returning a product is strenuous for the customer and worth a million buck for the retailer too. Now that figure simply doubles when it is the Athleisure segment, especially because the products once bought in this segment are often non-returnable and non-refundable. With the emergence of Augmented Reality, customers can now just point their smartphones either on the image of the product or on the box and get life-size models to show them how the apparel would look on a given body type. 

That indeed is the next step to customer engagement.

-Enhancing the in-store experience

This is particularly beneficial when stores and customers are practicing social distancing and cashless transactions to avoid exposure to COVID. 61% of consumers prefer shopping in stores that have AR implementation. Going forward, 40% of them would be willing to pay more for products if they have a chance to experience it through AR. 

Lacoste is a case in point. The sports and regular wear brand LCST Lacoste launched the AR Mobile app that customers used to virtually try on shoes. The app also created AR experiences with window displays, in-store signage, and promotional postcards. This got very popular among millennials and close to 30,000 people got engaged with the app. One can only imagine how much the sales figures might have shot up after that experience. 

But what if customers wanted options in the same variant? Here’s what they can count on. 

-Shopping from home gets the sign-‘edge’

A trend that has gained popularity during the COVID era specifically is all about making fashion fast. A shopper could open an app and scan a picture of the signage. The details of the picture, its size, its color variants, and pricing are pulled, along with the customer reviews. 

If that awed you, here’s an emerging technology that will take your imagination even further.

-Mirror mirror on the wall, which is the best of them all

After the COVID outbreak, shoppers now show hesitation to try on clothes because of the infection. AR mirrors can help customers visualize in an outfit of their choice. AR Mirror is all it takes to do a virtual fitting without even touching the apparel or going through the fitting room experience. 

That’s the combined power of technology and the intent of keeping your customers safe. But, should safety mean being bored while on a shopping spree?

-Who says shopping isn’t fun?

Consider this instance by Adidas, the world’s leading sports brand. It launched a line of sneakers that unlocked AR for customers at home. Once bought, customers take it home and display the tongue of the shoe to the computer’s webcam so it could read the embedded code in the tongue. Customers then find themselves in a virtual world which they can navigate by using the sneaker as a controller. 

A fine example of a customer loyalty program, it not just makes buying safe but fun too. 

The invisible store by Airwalk is another case in point of AR-enabled software application targeted for a very niche young audience and earning a revenue of $5million. All it required was geolocation and AR to create a virtual pop-up shop to promote the limited-edition relaunch of the Airwalk Jim. Shoppers had to download the app through which they could locate the pop-up, head there, and buy the product. 

Now, that’s what you call fun-shopping.

3D Printing

A powerful combination of prototyping, machine learning, and data analytics, this is probably the most zing thing in the field of Athleisure retail. 3D printed clothes involve turning movable/flexible material into clothing, whatever the yarn type is. Now how does that bring customer engagement, especially when these pieces of clothing cost more than 4X the most high-end athletic shoes?

If we remember our earlier deduction of customers focusing more on comfortable shopping than discount coupons, this probably fits right in. Popular sportswear Nike has already used this technology for its Zoom Superfly Flyknit sprinting shoe for sports start Allyson Felix. New Balance is not far behind with the 3D printed spike plate “hypercustomized”. Under Armour too released 96 pairs of its Architech Trainers, featuring 3D printed midsoles. Designed for athletes, these products are not for the masses indeed. Companies like Adidas are trying to utilize it to produce midsoles that can be tailored to the exact contours and pressure points of an individual’s foot. In other words, shoes that have auto-customization capacities. The costs, no wonder, are sky-bound.

But there’s something called prototyping that is fast replacing the quintessential luxuriousness of 3D printing, preparing this segment of the Athleisure market for mass production of these customizable products. Why? According to a report by Deloitte, around 41% of UK consumers like to buy products that are customizable, especially clothing and footwear. The same proportion rises to 53% for the age group between 16-24 years. 

The 3D technology is fast catching up with the sports garment industry too, but the head start was given by a start-up retail company ‘Ministry of Supply’ which borrowed the spacesuit technology from NASA to design everyday wearables- Apollo. The products were sweat-proof and regulated the temperature of the body using the mechanisms of thermal technology. 

Sounds sports? 

Well, it’s not far behind in adopting this technology, owing to the plethora of choices it offers its consumers who feel empowered to choose the fabric and the design of their Athleisure garment. That sounds more like the millennials who are dynamic and versatile in their behavior of adopting products. Having said that, they are environmentally conscious too, which makes them the best consumers of the 3D prototype athleisure products. Millennials like to see themselves as contributors to environmental preservation since 3D technology that goes into building the products of their choices helps manufacturers save a lot of water and energy, reduce the usage of dyes and scrap coming out of leftover fabric. This section of buyers are known to stick around such products for a long time. 

Now, that’s some level of customer engagement. 

This brings us to a very crucial point of the entire discussion that governs customer engagement and loyalty. We observe a pattern in the last few paragraphs, especially the way technology is being used as a chain reaction. One action on a given device culminating in a result on another device. If that’s not IoT what is it, demanding our separate attention as an emerging technology in Athleisure retail. 

Internet of Things (IoT)

The fact that Internet of Things (IoT) hardware for retail applications is expected to be worth more than $94 billion by 2025 is evident in the way it is revolutionizing the industry. For this very reason, it is likely to have a great impact on the Athleisure market too because the same comprises 20-30% of the entire retail industry. IoT accounts for emerging technologies across every facet of retail experience from maintaining inventories to self-operating machines. 

We have already established how the retail industry is heavily dependent on data churning for effective customer engagement and designing the right customer loyalty programs. The loyalty programs here mean the experience it bestows on its users. IoT for instance has been a:

-Great partner in calorie burn-out

Multiple fashion-tech solutions are driven by IoT and provide an edge to the membership program. Fitbit is just a case in point. The Sports luxury industry is using this to track customers’ workout progress and create customized solutions for every customer. 

-Smart Tagger

Another great way to read through customer behavior, smart tagging allows companies to insert a small chip inside apparel that can send information every time it is being used. This technology is widely being used because retailers can reward customers based on their activity and also collect important information at the same time. Active T-shirts by Hexoskin is a key case in point. Smart sensors located in the T-shirt track the heart rate and the body temperature, while socks by Sensoria could measure the steps, the calories burnt to check how much weight has the wearer lost. Imagine getting a reading of your vital stats without even going to the doctor!

Enough food for thought for the fitness freaks, but IoT gives a lot to discuss to Athleisure shoppers too who like to get intimated what’s in and what’s out. The following paragraphs will make sense here.

-iBeacons for custom notifications

iBeacons send customers notifications on their smartphones when they are passing by a store.  Although one of the earliest adopters of the Beacon was Macy’s, transmitting Bluetooth signals to send location-based promotions through an app, it is also being used by sports companies like Nike. 

One of its products Nike+ shoes included a sensor that could track the running performance of the customers through an iPod App or iPod. It must be mentioned here that because of the campaign, Nike had a hike in the direct customer percentage by 40%.  The product was an important contributor of $26 million in Q2 of the financial year 2021. 

Market statistics show that push notification or proximity notification is easily acceptable by 57% of customers who are willing to share their location for receiving more notification of customized loyalty programs. 

No wonder, IoT functionalities continue to help the Sports and Athleisure industry in enhancing customer engagement.

The Big Question

Now that we have navigated through the most happening technologies and their practical examples in the Athleisure industry, can we conclude that we have the winning formula of customer loyalty? 

We have understood how retail membership programs are meant to help companies in a high-stakes market environment where competition is fierce. We have also understood how important is a loyalty program to help retailers stand out from the pool of competition and increase revenue in return. 

We have told you of the technologies and their effects on the people using Athleisure goods. We have also told you of the way they have leveraged customer emotion and choices to improve customer loyalty, thus heightening revenues. But, the big and the most primary question remains to be answered: Are you ready to implement these technologies?

Forget the discounts, it’s the customer experience that counts. These perks should be memorable and have a long-lasting impression on the customer’s mind, which is only possible technology is optimized. 

You have great ideas for your customers and your business. That’s amazing! But do you have the right people to analyze your requirements and implement these technologies? 

Time to give that a thought.

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