Retail merchants who know what their consumers want and are able to bring it to market before the trend hits are able to create a level of respect that brands and consumers revere. And today, the communication between consumers and businesses is so vital that it can allow key decision-makers to listen, digest and stay one step ahead of competitors.
Feedback from consumers, beauty advisors and surveys used to be standby tools that merchants relied on in order to evaluate the potential of a new product or forecast the demand for a particular line. However, consumer feedback research has evolved into consumer data mining. With a plethora of feedback and instantaneous access to such communication, savvy merchants can now harness the power of technology to guide them on the brands they should buy. Consumer reviews and online chatter helps retail merchants fine-tune their buying decisions down to the positioning of a product or the attributes a product should emphasize.
Here’s the new reality: Existing clients are the best influencers. According to an April 2012 Nielsen report:
- Only 47% of consumers around the world say they trust paid media (television, magazine and newspaper ads), a decline of more than 20% since 2009.
- 92% of global consumers say they trust earned media (word-of-mouth and recommendations from friends and family) above all other forms of advertising, an increase of 18% since 2007.
- Online consumer reviews are the second most trusted form of advertising with 70% of global consumers trusting them, an increase of 15% in four years.
Retailers were asked “How much does consumer feedback/research translate into your merchandise assortment and decisions?” The following is their answers.
Claudia Lucas, Director Merchandising for Beauty, QVC – U.S.
Estimated U.S. volume in 2011: approximately $5.4 billion; retail outlets: TV shopping channel, e-commerce platform (QVC.com)
Customer feedback is a critical tool at QVC. We use it not only in how we make product decisions but also in how we present products. We have many customer touch points that we utilize, and we are fortunate to have a very engaged audience.
At QVC, there is more customer feedback on beauty products than on those in any other category. Among the things we look at are customer reviews. These prove to be very helpful in understanding what the customers like, but more importantly they help us see what they do not respond well to. In some instances, we may remove a product from our assortment after further analysis prompted by customer reviews, but in most cases we are able to correct a product based on the insight the feedback offers. In addition, we have a forum on QVC.com where our customers can chat and share what’s on their minds when it comes to beauty. Through this, we are able to assess how well we are meeting their needs when it comes to the beauty shopping experience.
Lella Liuzzi, Vice President, Merchandising, The Shopping Channel (Canada)
Estimated volume: $70 million; retail outlets: TV shopping channel, e-commerce platform (www.theshoppingchannel.com)
Customer feedback plays an immensely large role in our merchandising decisions. With the customers at the forefront of all that we do, we’re always looking to hear about what they liked, loved or loathed, and the advent of social media has made this an ever-important and continuous process.
Before customers were communicating via Facebook, tweeting and pinning, they were telling us about their experiences through online customer reviews and e-mails. Before then, we would get our information through phone calls and even letters. Social media allows for immediate reactions, and we’ve certainly seen our customers embrace this method of information sharing. Whether satisfied or not with a product or brand, they will let us know what they think, and there’s nothing more valuable than that.
In our constant mission to find out who does, who will be and who should be shopping with us, our customer research process is rigorous. A team of analysts compile valuable data that we use when reviewing current vendors and brands or considering new ones. Our goal of maintaining a delicate balance between customer retention and new customer acquisition requires us to anticipate trends while staying true to our steadfast lines; this process is made easier with the help of customer data, allowing us to track tendencies and habits. Whether it be statistical data or a scan of our Facebook or Twitter page, we’re constantly keeping tabs on what our customers are saying, and their feedback is reflected in our merchandise planning and decision-making.
Shawn Tavakoli, Owner, Beauty Collection
Estimated U.S. volume: $10 million; retail outlets: four brick-and-mortars (southern California), e-commerce platform (www.beautycollection.com)
We listen to our customers, both individually and in aggregate, pretty closely. Over time, we discovered that there are really three types of research we need to do on a regular basis. The first is local, with our existing customer base. Our store managers constantly ask our clients what new brands they’re looking for and curate their store’s collection accordingly. We’re [also] voracious readers of the beauty magazines and blogs, and look to them to keep us informed of trends. We started doing this in earnest a few years ago, and it’s led to some great new brand discoveries.
Finally, we spend quite a bit of time analyzing online search data on brands, new categories, beauty trends and more. We’ve found that Google can be helpful in providing a clear view of what’s really happening out there, in addition to strong beauty blogger engagement.
Lotty Eidelman, Commercial Vice President and Board Member, Fedco (Colombia)
Estimated U.S. volume: $73.2 million; retail outlets: 35 brick-and-mortars, e-commerce platform (www.fedco.com.co)
Our focus is always the consumer; we strive to ensure customer satisfaction and loyalty. We have a dedicated customer services team that collects and channels all comments, feedback and requests. We value this information and use it as the basis for future decisions—in particular, decisions around product assortment for individual stores is highly connected to local feedback and demand.
In addition to the incoming consumer feedback, we perform a biannual survey on image and market positioning. The survey has material impact on Fedco’s offering, with as much as 80% of our products being determined by the results of this survey and the overall regular feedback received from consumers. This feedback allows us to provide the right combination of beauty, health and well-being products.
If data is the new resource for merchants, will consumers soon start to demand their share of its value? Already online sites such as beautyhabit.com and totalbeauty.com increase data flow by giving incentives to users. Will such steps translate to retailers? Increasingly, savvy consumers may start to reverse the flow by seeking to own their lifestyle data. They also may turn to companies that use this data to proactively offer help and advice back to consumers.
A word of warning as well—retailers and brands will have to walk a fine line between offering consumers a valuable—and ideally seamless—service and annoying them. Consumers want to feel served, but they don’t like to be infringed upon. It’s important to maintain the balance.
As director of marketing for SoGeCos Americas/Cosmoprof North America, Daniela Ciocan is responsible for keeping this professional trade show fresh. She implemented new initiatives such as Discover Beauty and the International Buyer Program, and selects the brands for Discover Beauty, a testament to her vision for what is hot in the industry. She previously was responsible for Awake Cosmetics’ luxury specialty store distribution launch in the U.S., overseeing all aspects of brand management, and following her success with establishing Kosé in the high-end market, she introduced several other brands, such as Sekkisei and Predia, into the masstige sector. Ciocan, who graduated magna cum laude from FIT, currently serves on the ICMAD advisory board and is chairwoman of the communication committee.