Edition 111, November 2020

Customer Loyalty & Experience Through RL Retail

By Maria Eisenberg, Marimole LLC

With the ever evolving nature of customer service and loyalty, establishing an environmental policy that encourages customer engagement, influence, and advocacy through customer loyalty programs is key to remaining relevant with key segments of consumers. A brands environmental policy developed around a return and take back program can reflect positively on the brand and company whilst allowing for customer loyalty to be measured and further accelerated.

Win customer loyalty with your environmental policy

Customer loyalty involves a sophisticated method of measurement which accounts for both passive and active customer responses to a brand and company. These responses fall into three behavioral reactions. One, will the client increase their level of engagement with the brand. Two, will the client be influenced by the company in a way that positively impacts the brand or company. And three, will the client promote the company with reviews serving as a steward and participant in engaging with other company and brand clients. These reactions result from a consistent positive emotional experience with the brand’s services and products from purchase to return and beyond.1

Increasingly, consumers expect brands and companies to consider sustainability in their business practices. This has spawned several eco programs. In the last few years many brands and companies have set out to establish eco-friendly initiatives that aim to both consider sustainability and grow customer loyalty. These initiatives do not target a customer’s initial purchase but rather the end of life of the product bought and can result in engagement with the customer months even years after the customer first interacts with the brand or company. Brands that do not offer an end of life customer engagement programs face a missed opportunity for customer expansion, influence, and advocacy.

In Europe, H&M started the first global garment collecting program back in 2013. They recently took another affirmative step towards providing recycling services with their garment-to-garment recycling system called - Looop. H&M has a loyalty club where for 100 Swedish kronor loyalty members can use Looop to transform their old garment into a new piece.2 By adopting green-based strategies to reach their target segments, H&M and other retailers like them seek to both capture and inspire customer loyalty and as these customers re-visit stores.

H&M Looop easily produces two of the three behavioral reactions measured in customer loyalty. The customer can easily expand their level of engagement with the brand when they visit the novel Looop recycling system at an H&M store.

Also customers are positively influenced by the brand as they learn about sustainability and its intricacies and possibilities during their Looop visit and in turn support H&M’s eco friendly programs. Where we may not see immediate and measurable customer loyalty results in H&M’s Looop loyalty program are in customer referrals.

With ecommerce however, the level of customer loyalty and engagement can easily produce customer advocacy through online customer reviews. Ecommerce customer loyalty engagement are more complex considering the many necessary steps involved with returns and reverse logistics but fiscally rewarding as all three customer loyalty metrics can be attained and measured.

E-commerce brands can explore eco-friendly initiatives through an integrated returns strategy which saves money and builds up the brand. First an ecommerce brand must process returns quickly. A speedy return can be quickly rewarded while a cumbersome return policy can be just as quickly admonished in a customer review. By working with their supply chain partners to ensure that returned stock is resold, recycled or bundled efficiently and profitably.

Companies like Marimole also offer third party logistics support with take back programs and offer the added benefit of providing a recycling service and the sustainability metrics to assure materials stay in use. Take back programs result in positive influence over customers and allow for continued customer engagement. Also by controlling their returns a brand can implement forecasting processes and data analytics to determine returned inventory placement. In addition, ecommerce customers can easily supply online reviews which further promotes an e-commerce company’s eco-friendly approach.

Asos.com one of the world’s largest e-commerce companies recently launched its first circular fashion collection with a 29-piece range that adheres to eight principles on sustainability.3 The collection includes articles of clothing that are easily disassembled and recyclable. Unfortunately ASOS could have gone even further to engage with their eco-conscious consumers by either supporting or creating their own take back system which also positively influences their customers after the initial sale of the fashion collection and allows for customer advocacy of the brand with continued expansion.

Other companies can forge stronger customer loyalty when offering a service that a competitor does not. For example, Madewell recycles “pre-loved” denim from any brand with a $20 incentive for customers for future purchases.4 The recycled denim becomes housing insulation for communities in need. Madewell recycling service creates the opportunity for customer loyalty where another brand has not.

And yet some companies and brands even go as far as to support customer engagement and loyalty when the product or service initially purchased by the customer is not one obtained from their brand but rather a similar brand or company competitor. On very rare occasions is customer engagement presented to a different company with a completely different set of offerings than the company where the customer first purchased the service or item. But when the moment arises some brands can make customer loyalty history.

Here we recall one very well known customer service story. Nordstrom which sells mostly apparel, shoes, and accessories accepted tires from a customer that had purchased the tires at the store once occupying the same space prior to Nordstrom. Customers love this story, it illustrates the depths that Nordstrom is willing to go to forge relationships and expand customer loyalty in the returns process, after the initial purchase of the product or service. Although this is not an example of a customer loyalty program that involves a brand’s environmental policy, it encourages brands to consider the range of possibilities that could be explored when brands create customer loyalty out of seemingly unrelated products or services.

Loyal customers conduct themselves in a way that produces positive outcomes for themselves and the brands and companies they support. They stay loyal to a preferred brand despite, for example, price breaks or promotions that competitors offer. Businesses looking to bolster loyalty design ways to encourage specific behaviors. With customers seeking sustainable practices, brands with environmental policies that accept returns and account for a products end of life engage with customers to impact expansion, influence, and advocacy.

Companies that lack a streamlined end of life planned response fall out of favor with customers lacking continued engagement and loyalty. Here all three behavioral reactions to the brand or company that could encourage customer loyalty go missing.

  1. https://hbr.org/2008/04/the-four-things-a-service-business-must-get-right, https://www.qualtrics.com/experience-management/customer/customer-loyalty/
  2. https://about.hm.com/news/general-news-2020/recycling-system--looop--helps-h-m-transform-unwanted-garments-i.html
  3. https://www.independent.co.uk/life-style/fashion/asos-circular-sustainable-fast-fashion-shopping-environment-waste-b602255.html
  4. https://www.madewell.com/inspo-do-well-denim-recycling-landing.html

Maria Eisenberg
Maria Eisenberg is CEO & Founder of Marimole an NYC based textile recycling company. The idea for Marimole was born when Maria saw a need to apply her experience working in electronics recycling and reverse logistics to the under-served area of textile recycling. Maria had long been passionate about environmental protection and conservation, and it was her desire to make a difference as a steward of the environment that led her to work in textile recycling.