Episode 18

Phy-gital Customer Engagement Strategies

In this episode of Good Data Better Marketing podcast, Julie Roy, Senior Vice President and Chief Marketing Officer at DSW discuss the phy-gital customer experience, building loyalty through content and communities, and balancing brandformance

 

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Guest speaker: Julie Roy

Julie Roy leads brand and product marketing for DSW, a leading omni-channel footwear retailer.  After having spent much of her career in the customer analytics, CRM, and loyalty space, Julie is now responsible for leading the development, activation, and continued growth of DSW’s cross-channel marketing campaigns and media programs, with the objective of improving brand awareness, customer acquisition, and brand engagement & loyalty.

 

Episode summary

This episode features an interview with Julie Roy, Senior Vice President and Chief Marketing Officer at DSW. Julie has devoted 15 years of her career at DSW in the customer analytics, CRM, and loyalty space. Now, she is responsible for leading the development, activation, and continued growth of DSW’s cross-channel campaigns.

In this episode, Kailey and Julie discuss the phy-gital customer experience, building loyalty through content and communities, and balancing brandformance.

 

Key takeaways

  • The best customer experience in retail revolves around convenience, relevance, and value. By bridging the digital and physical experience, customers can conveniently shop across channels. Relevance happens by positioning your brand to align with customer values and their personalization needs. And finally, value is created through content and communities that connect customers.

  • In this current economic climate, CMOs are tasked with making every dollar work harder. This requires constant testing and optimization of tactics, channels, and content to better serve customers.

  • Customer loyalty should be thought of as a business strategy, not a marketing program. Everyone across the organization is responsible for creating brand stickiness and customer retention.

     

Speaker quotes

“The focus now will be on bridging and integrating the digital and physical retail experience for consumers. I like to call that the ‘phy-gital’ experience. [...] You get the full sensory experience of a brand and the physical experience. [...] Then you couple that with the endless choices of a vast assortment, as well as the expanded content and rich information that you're able to provide with the digital experience.” – Julie Roy

 

Episode timestamps

*(02:51) - Julie’s background

*(06:16) - Industry trends in customer engagement in retail

*(13:37) - Changes in consumer behavior in retail

*(17:04) - Challenges in the customer engagement journey

*(19:13) - How Julie defines “good data”

*(31:52) - Changes in customer engagement in the next 6-12 months

‍*(34:14) - An example of another company doing it right with customer engagement (hint: it’s beauty brands and Apple)

*(35:57) - Julie’s recommendations for up-leveling customer engagement

 

Connect with Julie on LinkedIn

Connect with Kailey on LinkedIn

 

Read the transcript

 

Julie Roy: The focus now will be on bridging and integrating the digital and physical retail experience for consumers. I like to call that the phygital experience. You get the full sensory experience of a brand and the physical experience, then you couple that with the endless choices of a vast assortment as well as the expanded content and rich information that you're able to provide with the digital experience.

Producer 1: Hello and welcome to Good Data, Better Marketing, The Ultimate Guide to Driving Customer Engagement. Today's episode features an interview with Julie Roy, Senior Vice President and Chief Marketing Officer at DSW. But first, a word from our sponsors.

Producer 2: This podcast is brought to you by Twilio Segment. Looking for clean, reliable data that you can trust? Segment collects, cleans, and allows you to activate your data in real time across hundreds of applications and channels. Learn about how Segment can help you personalize customer experiences by visiting segment.com.

Kailey Raymond: Providing a best in class customer experience revolves around convenience. It should be easy for customers to fluidly shop across channels by bridging the physical and digital, or as retailers call it the phygital landscape. By giving shoppers an in-store sensory experience and meeting them where they are across the wide array of digital options, retailers are satisfying the customer's demand for convenience, all while collecting invaluable customer data to create even better personalized journeys. Today, we're diving into the phygital world and building brand loyalty with Julie Roy, SVP and CMO of DSW.

Kailey Raymond: Welcome to Good Data, Better Marketing, the podcast where we speak with influential marketers and digital innovators and learn their tricks of the trade. They help us understand exactly what good data is and share stories about how they've created digital first customer experiences that stick. I'm Kailey Raymond, I lead enterprise marketing here at Twilio Segment. I'm your host, and with me today, I have Julie Roy, that's SVP and Chief marketing officer of DSW. Welcome to the show. Thanks so much for being here.

Julie Roy: Hi Kailey. Thanks so much for having me. I'm excited to be here to discuss data and how we're using that to create better marketing and better customer experiences.

Kailey Raymond: I love it. I wanted to start off by getting to know you and your career journey a little bit more deeply. Prior to CMO, I know you held various roles across DSW over the past 15 or more years; analytics, customer marketing, strategies. So I'm really excited to dive into how all of those well-rounded experiences have led you to be the leader that you are today in driving customer experience. But before we get there, I wanna learn about you a little bit further back. What was your first job?

Julie Roy: So my first job was a bit non-traditional for marketing. I was actually a public accountant at Ernst & Young, which is now known as EY. So I was a CPA, working with several clients across many industries. A few of my clients were actually retail companies, which is where I discovered my love of retail.

Kailey Raymond: Okay. CPA, CMO, just out here collecting acronyms. Love it. We have a little bit in common. I almost went into Deloitte Risk. I ended up at a startup instead, but apparently, we're making moves from accounting into marketing and entrepreneurship. So, okay. We know at a high level, you've had a lot of different roles at DSW, but in your own words, how did you get to where you are today?

Julie Roy: Yeah, so about three years into my career in public accounting, I realized that I just was not engaged and motivated by what I was doing anymore and I really wanted to make the transition client side, in particular to a finance planning and analytics role. I'm very specific to a retail organization. As I mentioned, I knew my love of it. And so through that journey, I discovered DSW and that they were growing. They had just recently gone public, looking to expand their talent. I had been a big fan personally of DSW for many years, and so it was just the right time. So I started in finance at DSW, which is where I further learned the retail business. So sales and margin forecasting, inventory management. But I also started to learn the impact of marketing on sales and how interconnected what we were doing from a customer-facing perspective impacted the overall business performance and financials.

Julie Roy: That was also at the time where, in the industry, digital was just starting to rise and evolve and industry was moving from what was traditionally called advertising to marketing. And my personal passion is really about helping businesses drive more value and I love continued optimization, and so marketing was just kind of a natural progression in my career, where I was able to take my strong financial acumen, but apply that to marketing trends and customer behaviors, understanding what makes customers tick and how we make it stickier and get them to do more of what we need them to do. So pretty quickly moved into marketing analytics at DSW and then just kinda naturally grew from there into CRM and loyalty strategy and execution, customer insights, media operations, brand strategy, product marketing, and then I'm more recently in creative too. So it's been a really fun journey and I've truly been able to experience the full spectrum of the art and the science aspects of marketing.

Kailey Raymond: I love that. It's like left brain, right brain, certainly I'm highlighting the fact that I like that you're calling out the art and the science. That's exactly what marketing allows you to do. I don't think I ever thought about that when I was growing up. I always thought it was more of perhaps a creative career, but it's so analytical as well.

Julie Roy: So true.

Kailey Raymond: And so it sounds like you've kind of basically created your own rotation program of sorts where you've seen lots of different sides of the business, which is really cool. I also love that you highlighted the beginning of your career of seeing the start of digital and the transition from advertising to what we now know is more of a modern marketing with all of these different niche roles and functions. So those were kind of the trends, as you were starting your career. What about now, any industry trends that you are currently seeing and following related to customer engagement and retail?

Julie Roy: Sure. There's lots of new emerging trends and it will always evolve, but I sometimes like to simplify and take a step back. And at the end of the day, customer engagement and retail has always been, and will continue to be, about making shopping easy and fun. Sometimes customers just need what's easy, right? They're in a rush, they're trying to get something immediately.

Kailey Raymond: Totally.

Julie Roy: It's, yes, all about easy, but sometimes they look to be inspired and have fun. And retail is, they call it retail therapy for a reason, right? So it depends on the mood, the circumstance, the end use. But with that, customer engagement trends in retail have really been focused on, will continue to be focused on convenience, relevance, and value. So I'll start by touching on convenience a bit. So this is all about making the customer experience fast and frictionless. This has been a big focus for digital commerce over the last several years and will continue to be. It's table stakes. But the focus now will be on bridging and integrating the digital and physical retail experience for consumers. I like to call that the phygital experience. So customers can shop fluidly across channels, reaping the unique benefits that come with each. You get the full sensory experience of a brand and the physical experience, including touching and feeling the product, which is incredibly important, especially for shoes, but then you couple that with the endless choices of vast assortment as well as the expanded content and rich information that you're able to provide with the digital experience.

Kailey Raymond: This term phygital, I've heard this a couple of times now. I need to know who coined it. It's brilliant. I've been saying hybrid. I feel like I've been missing out for a really long time. Phygital is just like, there's something about it. It sounds like a Pokemon or something. Just hits different. I also think that it's really important to kind of double click on this because it really speaks to a larger trend, which was, of course, accelerated by COVID. We all know the story. It's been three years. But the investment in digital transformation has really changed the way a lot of businesses think about how digital and physical interact. And for retailers, I know that one of those examples of phygital is BOPUS, right? So it really just highlights how intertwined all of the engagement channels have become.

Kailey Raymond: And we recently did a report, the State of Customer Engagement, and it worked to actually calculate some of the revenue impact of transitioning to digital, and found that among customer engagement leaders, investment in digital increased revenue by an average of 123%, and 27% said these investments tripled their revenue. So this is just to kind of double click again on your point of convenience that the customer is always right and the customer is demanding channel of choice, and right now, a personalized experience for them means it's likely, at least in part, a digital experience. So you mentioned two other trends. I didn't wanna stop you, but what's your next one?

Julie Roy: Yeah, well you touched on personal experience. So my next trend was relevance, which those two are very related. So you have to be relevant as a brand throughout the customer journey and experience. Over the last few years, with the rise in digitally native brands, coupled with consumers gravitating to brands and retailers that share their value, there's been an increased focus on purpose-driven brands. So the importance of brand positioning and brand building will continue. Brands will not win if they haven't defined who they're serving and how they're uniquely positioned to serve those customers. Also with relevance, it'll continue to be all about reaching your customers where they are, right? With the continued expansion of social, video, audio platforms, brands must keep evaluating and growing where it makes sense for them, and the focus here will continue to be on content, content, content.

Julie Roy: It needs to be rich, relevant content that feels platform endemic, authentic and culturally relevant, and leveraging celebs, influencers, creators will continue to be critical as part of that, but we'll be seeing more of the shift to longer term partnerships that foster that trust and authenticity with consumers. And then finally going back to your point around personal experience, is around personalization, which is a critical element of relevance, right? We need our customers to feel like our brand is a brand for them and their unique needs, and that means catering the experience accordingly, to best serve those unique needs and wants and making it easier for them to get inspired and then ultimately convert and buy.

Kailey Raymond: A 100%. I love that you're bringing personalization into this. It's something, of course, that we track really, really closely here at Twilio. And there's a couple of stats from that report that I just mentioned that I think touch on this really nicely, which is that among consumers that are spending 21% more on brands that personalize, right? So if you are actually making these experiences really relevant, you're going to expect a little bit more revenue coming your way from those same exact customers. So those conversions, that loyalty is really building, and so that's not stating the obvious, but you're leaving money on the table if you're not making relevant experiences and if you're not personalizing. And the most interesting thing, I think, is we found that there's a really big perception gap. And so amongst brands and customers, there's complete differences in what they believe as it relates to personalization.

Kailey Raymond: So 91% of brands report that they often or always personalize engagement with customers, and just 56% of customers say the same. And so it's just saying that in order to deliver that experience, you need to work really hard to bridge that gap and make sure that that perception gap is closed, which is going to lead to more engagement, and yes, of course, more revenue. So I'm off my soapbox, but you mentioned one last trend.

Julie Roy: Yeah. So last trend was around value, and by that I don't just mean pricing value. Of course, price is something that retailers will continue to focus on, given the criticality to business performance. But when I say value, I'm talking about value that you provide to consumers' lives. So the last several years have included a huge focus on loyalty programs; launches, re-launches, refreshes. I think every retailer has done it over the last five years. The trend now will be on retailers building in experiential elements to their loyalty strategies, to more deeply engage customers beyond those transactional benefits that are standard in a loyalty program. And then the other part of evolving value is going to be around content and communities. So adding value to customers and deepening their engagement with your brand by connecting them with like-minded individuals. We like to call these their tribes. And providing customers with that expanded content to inspire, educate, and give them confidence in their purchases.

Kailey Raymond: I love that you're bringing up loyalty and a community because, especially now, it feels like those tactics are what companies are really honing in on in the economic climate. And so, I'm gonna ask you about that later on. Right now, I'm gonna try as best as I can to keep on topic, which is trends. And so I wanted to learn a little bit about consumer behavior. Are there any changes in consumer behavior that you wanna take note of in the past couple of years?

Julie Roy: Yeah, I mean, customers always keep us guessing, right? It's why we...

Kailey Raymond: Absolutely.

Julie Roy: Why we sign up for retail in the crazy world of marketing, 'cause there's never a dull moment. But I think probably the most explosive change over the last few years has just been the expansion of customer touch-points. 10 years ago we were primarily focused on, 15 years ago, primarily focused on stores, and then we started focusing on digital and then CRM channels like email, and then apps started getting out there and SMS. And then with the media channels, how many social platforms do you, Kailey, have on your phone? I know I have too many that I have time too many for.

Kailey Raymond: Too many.

Julie Roy: Yeah. And then video and TV and audio. So it's just expanding so much. And so where customers are spending their time and how they're engaging in shopping is so fragmented now, that us as brands and retailers have to be in so many places, in the right ways, to reach them and cut through. And so with that, the growth in data and content has grown astronomically, both in terms of volume but also complexity and uniqueness.

Kailey Raymond: You're telling me last year Segment processed somewhere close to 12 trillion API calls, unbelievable amount of data, and we have over 400 downstream destinations, which is to say that customers are just piping their data, to your point, and to a lot of different places. So you mentioned a few trends; convenience, relevance, value, and now you're noting this proliferation of channels, and of data. So in your seat, as CMO, over the past couple of years, you're just watching this complexity grow and grow. So what's different now, in 2023? How is this economic climate changing your strategies and tactics? Anything you wanted to to share?

Julie Roy: Yeah, I mean, retail's always required perseverance and agility. This has been especially true over the last few years, with a pandemic and a very volatile market landscape and consumer environment. And with the current economic climate, all CMOs are being challenged to make every dollar work harder. And so this will just result in an incessant focus on testing and optimization of tactics, of channels and content for marketers. And I think, I like to sometimes think of CMOs as the chief connection officer, and while we've had strong partnerships with our stores and digital experience and operations partners and in the last few years, and how it'll continue with the economic climate is building those and ensuring those strong partnerships with merchandise planning and finance for truly integrated business planning and adjustments, and agility and flexibility will continue to be key.

Kailey Raymond: I really like that, the chief connection officer, that is something that I'm going to remember. This sentiment of building these cross-functional relationships and making sure that you are in lockstep, and that's, I think, the real starting place of driving great customer experience, customer engagement, is that internal alignment. Your customers feel when you're internally aligned and they feel when you're not, frankly, and they know when you're putting the customer first, and you're all kind of unifying all those insights together to make better decisions. Not an easy task, by any means, but the chief connection officer, I think, is kind of a great one to call out. What are some of the biggest challenges related to customer engagement that you're facing at DSW?

Julie Roy: I like to think of challenges is opportunities. So I would say our biggest opportunity is really about integrating that phygital experience for customers that I touched on earlier. And for us in particular, that's about improving our customers' in-store experience by leveraging the digital experiences to better inspire and serve, both our customers as well as our associates that are engaging with our customers. And so that requires good data for both customer data as well as product data, and requires that strong supporting data and technology architecture. For DSW specifically, over a third of our customers have been shopping with us for 10 plus years, which...

Kailey Raymond: That's amazing.

Julie Roy: Almost before we had a website, just to put it in context. And so a lot of them, most of them are actually store only shoppers and we know that we could better serve their needs both in the moment as well as long-term with their future shoe needs by leveraging and integrating our digital experience.

Kailey Raymond: Yeah, I definitely have been shopping at DSW for a very long time. It's very interesting that the vast majority are loyal 10 plus your customers. That is the thing that most brands would say, yes, that's the most amazing thing ever, so that's very cool.

[music]

Kailey Raymond: I love that you're talking about this, bringing together data from all of your channels; physical, digital, creating those complete customer profiles to ensure that you have that 360 degree view of what your customer is, and then, to your point, activating some of those profiles into meaningful and engaging moments. Incredibly challenging. I can't imagine that you're alone in creating this opportunity of blending phygital channels together. You mentioned it requires good data and strong architecture. So how would you define good data?

Julie Roy: Good question. So, obviously, good data needs to be high quality, which they usually define as accurate, complete, reliable, relevant, and timely. But I think more than that, good data is insightful and actionable. Like there is no shortage of data to look at, to dig into, and so it really requires that discipline to be incredibly focused on the right data and avoid common pitfalls like analysis paralysis, as I like to call it. So good data really starts with strong business questions, needs or hypotheses. And then it's really important to evaluate both quantitative and qualitative data as part of that. So you need the quantitative to identify the what oftentimes, but to supplement that with qualitative to better answer the why. And so good data is not just interesting. How many times have we been in a meeting and someone's presented something and you're like, "Oh, that's interesting."?

Kailey Raymond: A lot.

Julie Roy: But It's gotta be...

Kailey Raymond: Too many.

Julie Roy: Right, you're right, it's gotta be insightful that leads to action. It's not valuable if it's just interesting. It's gotta be insightful, providing the insights that drive actions to really create value for an organization. And also, as part of actionability, comes putting data in the right hands of the relevant business users. It needs to be accessible and structured in a way that enables that activation by the business.

Kailey Raymond: I love this answer. I think you're calling out all of the really critical parts of this. A lot of great takeaways too that I wanna focus on. The first is it needs to be the right data. Everybody can collect data. It's not that hard nowadays to collect an insane amount of data that you're not using and that you are having all of these insightful but not actionable kind of conversations about. So starting with your unique use cases, every business is different, and getting down to what you need as a business is incredibly important as a starting place so that you are collecting, again, the right data. And second, I love, of course, as a marketer, you're calling out actionable. That's exactly what data needs to be, and it all, again, starts with your unique use cases, working backwards from there and being able to collect the right information, not all of the information, because, frankly, you're probably collecting and paying for a lot of storage that you don't necessarily need. Talked about good data. How are you using it? Just a couple of tactics or programs that you wanna share.

Julie Roy: Yeah, one of the biggest ways, most recently, that we've been using both quantitative and qualitative data is in how we think about the continued evolution of our store experience. So last year we launched a new store experience in one of our Texas stores, which included changes to the assortment, the store layout, fixtures, visual, you name it, all of it. And from the onset, we said we were going to learn and iterate based on what the customer did and what the customer told us. And so we had key performance metrics that we evaluated that align to those customer behaviors and expected outcomes, so starting with like the business problem or hypothesis. And we also supplemented that with some robust customer insights work, more of that qualitative that included everything from post-purchase surveys to shop-alongs. And so with that intentional customer data program, we were able to really quickly gather insights that turned into actions even as much as like immediate adjustments to the store environment so we could listen, learn, react, and then listen, learn, react again. And it resulted in a significant improvement in the store performance, but also the refinement of our go forward store revitalization format.

Kailey Raymond: That's so cool. And I really appreciate your use of the word intentional. I think that that's, again, what we've been talking about, like the foundation is knowing where you're starting and why you're doing it. You're also speaking to something that's really, really hard to do, which is bringing together different data sets. So how do you think about bringing together that quantitative and that qualitative data to drive better strategies and campaigns?

Julie Roy: Yeah, I think the best is accomplished when focused on key strategic efforts and priorities of the business. So I gave an example of that as it pertains to the store experience, but that approach also applies to marketing strategies and campaigns. So obviously, quantitative data is just more robust in accessibility, especially with the rise of testing and realtime optimization and machine learning, and has been much easier to apply quantitative results into immediate actions across many marketing platforms and customer touch points. And so we're doing so in terms of targeting, content, formats, and that's been critical to ensure we're driving that effectiveness with customers, but also the efficiencies in our investments for the business, going back to, I think, every CMO has been challenged with making every dollar work harder. And then from there, it's identifying where qualitative can add increased insight. So let's use email as an example. We all I think are recipients of email.

Kailey Raymond: A lot of it.

Julie Roy: It's totally very relatable, yes. So we use quantitative data to determine subject lines, messaging storylines and our content. But occasionally, we need to supplement that with why and how do customers engage with email in the way that they do? And that really yields further insights for continued optimization, exploration and testing.

Kailey Raymond: Test and learn, so important to remain agile, and to your point, stay relevant, kind of harkening back to the trends that you were talking about. A fun email strategy, I was talking to the Chief Strategy Officer of Bloomingdale's and I don't know why I didn't know that this is what brands do, but it makes perfect sense, is personalizing send time for customers based off of their previous open and behavior data. I'm like, "Yeah, of course you should do that." But I don't know. I never really thought about it before. I'm not an email person.

Julie Roy: It's crazy, right?

Kailey Raymond: Absolutely wild. My mind was just like, "What? You're doing that?" So there's a ton of different ways to make things really relevant and interesting and they can be as boring as send time, but they work. They increase conversions. So earlier you talked about evolving in-store experience and I'm wondering how you're bringing together that online and offline data to marry that into one seamless customer experience. How are you personalizing omni channel?

Julie Roy: Yeah, so, so far we've seen the most significant impact with personalization as it relates to content, and most specifically, product content. So at DSW, we have a wide consumer base. We used to joke that it was 8-80, but then we entered kids a few years ago, so now it's like 8 weeks to 80 years old, I don't know, but wide consumer base and every customer has their own unique style. So we really need to curate our vast product assortment to make their experience more convenient, more relevant, and showing them the shoes that we know they'll love the most. And we still have a lot of opportunity here, including kind of bridging that phydgital connected experience I mentioned before. So personalizing the omni channel experience across product, offers, touch points, throughout the customer journey and life cycle is a top priority for us in the coming years.

Kailey Raymond: That's great. Yeah, so using customer data to personalize products on your homepage, or to infer what color somebody really likes because they keep looking at things that are blue and in highlighting those products first. It's subtle, but it really works because it increases those conversions, and customers barely even know that it's happening in the background. And to the point of the macro environment, all of those dollars count, so those conversions really, really matter. I'm thinking about, in tech right now, at the very least, in terms of conversions, and what we're thinking about with macro is going back into the base, and I think that retailers do this really, really well. Whenever I'm thinking about how to create a loyalty or retention program, I'm trying to think about retailers and find some inspiration there. So I know you mentioned community and loyalty a little bit earlier. I'm gonna bring it back. How do you think about it at DSW? Any programs you would wanna highlight related to retention and loyalty?

Julie Roy: Yeah, so I would say we think about loyalty as a business strategy, not just a marketing program. So customer loyalty is something that we earn, build and foster based on the customer's total experience with our brand. So our entire organization is responsible for creating that brand stickiness with our customers, and we share that goal and motivation. As part of that, we've had a loyalty program for decades now. DSW was actually one of the early adopters in retail with the loyalty program, and we've also had retention and reactivation programs for a long, long time, and we continue to be focused on evolving and optimizing those programs. But one of the newer programs that we just launched within loyalty is called Big Moments. It just launched in mid-March, and this gives our customers the opportunity to share their key life milestones with us. So new baby, a career accomplishment, a wellness goal, a new home, an upcoming wedding.

Julie Roy: And with that, they receive a special incentive so that they can buy new shoes to put their best foot forward with that milestone. And this was really born from quantitative insights around, why are customers buying new shoes? Occasion is a big one with that, and as well as the qualitative, like yeah, customers really resonated with this idea. But more importantly when you talk about shoes with with customers, they have that one pair of shoes that they remember from one key milestone in their life. So it was a great opportunity to not only help serve their needs as it relates to shoes, but also drive that deeper engagement with our brand, and it gives us additional information around what's going on in their life to help us personalize the DSW experience. So we first piloted this program about a year ago and saw some great success in terms of customer engagement and subsequent purchasing, which encouraged us to launch for all.

Kailey Raymond: That's amazing. I love that. I think that this is what's super cool about retail and certain industries as well, is like you can latch on to some incredibly big life moments. So a new job, new baby, wedding, big marathon somebody's training for. You get that to build that sense of trust, which is just so critical for brands, and you do it with this intrinsic emotional connection and that that's just so valuable, to be able to do that as a brand. Do you have an example of something that you found within data that might have surprised you? Anything that data helped you to surface that would've surprised you?

Julie Roy: I have lots of examples, but one that I will point out was that when we relaunched our loyalty program in 2018, obviously you don't take that lightly, right? So there was some robust quantitative and qualitative analytics and insights work that went into that, particularly with an existing strong loyalty program like ours, and it warranted some robust data and analysis to support. So in our qualitative research, we found that the number one proposed new benefit that customers responded to was earning points for donating shoes.

Kailey Raymond: That makes sense.

Julie Roy: More than... I know, right? I mean, more than a bonus reward, more than unlimited returns, more than a mani/pedi party. I mean, we had some robust things out there, one hour delivery, but customers wanted to donate shoes and earn rewards, and it then launched as one of our new loyalty benefits for DSW VIP in 2018.

Kailey Raymond: That's so cool, and I totally get that. It's also also a really interesting ESG strategy for you too. It all works very well together. I have a few pairs of shoes that I could actually stand and donate and I happen to have a DSW like 12 minute walk from my house, so we'll see what we end up doing next weekend.

Julie Roy: Now you know. Go get some new shoes and give some to those that need it.

Kailey Raymond: I love it. The more you know.

[music]

Kailey Raymond: So we started our conversation with trends. I'm gonna bring it back to that, but more future looking. So what changes do you see on the horizon for customer engagement in the next 6-12 months?

Julie Roy: Yeah, so I think, over the next several months, you'll continue to see retailers and brands focus on brandformance. So brand coupled with performance.

Kailey Raymond: These Words that you're blending together, this phygital, the brandformance, taking note.

Julie Roy: I know. I'm sorry, I'm giving you more acronyms and made up words. But to be successful you have to carefully balance that brand building with performance, and the best brands and content will bridge both. So the importance and focus on first party data will continue to grow as data privacy regulations and changes continue. I also foresee Creative AI and ChatGPT gaining some significant steam in the next 12 months. And I think this has the opportunity to really dramatically change how brands use creative resources, shifting them more to like editors and curators versus designers and copywriters. But beyond that, businesses need to continue to focus on delivering the convenience, relevance, and value that I mentioned earlier to their customers. How they do that will differ based on their own unique models and needs. But through that, I'm quite certain that data, content and personalization will remain top priorities for most organizations.

Kailey Raymond: Yeah, I think that it's hard to have a conversation about the future without talking about AI, especially at this exact moment when it seems like ChatGPT is a part of everybody's feeds all day, every day. In tech right now, so many people are leveraging it for so many cool different use cases. And on my team, we're starting to create a verticalised content. So we'll take an asset, which could be for anybody, and then we'll start writing intros that are personalized to different verticals, and then, to your point, edit instead of write from scratch. So I think that the time savings there are really, really cool and it allows you to just scale your team. And for y'all, like product descriptions, email, subject lines, you could do all of that in in truly seconds, I am sure. I was talking to somebody in the housing space the other day, in real estate, and he was like, "Yeah, we could could probably write all of our house descriptions in like 30 seconds." I was like, "That's a game changer."

Julie Roy: That's game changer, no doubt.

Kailey Raymond: So who do you think is doing it right? Customer engagement, customer experience, anybody that you look to for inspiration?

Julie Roy: Yeah, I think doing it right means what's right for your customer and what's right for your brand. I think it's really important to maintain those two filters. Some that I'm inspired by, I think beauty brands have done a great job expanding their product lines and offerings to better meet their customers diverse needs, evolving their phygital experiences to better curate the assortments for their customers and driving that omni channel engagement, including how-to videos, which is critical within beauty, quizzes, FAQs, reviews, all of those kind of creating loyalty through those expanded experiences and benefits as well. And then I don't think you can talk about a brand doing it right without mentioning Apple. They have very clearly defined who they are and what they're about, and they ensure that they are always serving their customers needs and pushing them forward to what's next.

Kailey Raymond: I love that, in particular, actually you might be the first person that's ever brought up Apple, which is surprising, but it's really an incredible example. The thing that I think is cool is it's also bringing it back to serving the customer's needs, specifically as it relates to privacy. They've been a massive change agent related to privacy in the industry and what consumers are demanding, really in the forefront of that change. So it's cool to see how them being these people that are inspiring as it relates to customer engagement, is tying directly back to really listening to what their customers are saying and and making those changes accordingly. Okay. Last question of the day for you and then you're off the hook. What's a piece of advice that you would give somebody who's trying to up-level their customer engagement strategies?

Julie Roy: Ooh, good question. My piece of advice is, like I said before, focus on what's right for your customer and what's right for your brand. Look for inspiration everywhere, but make sure you apply that to what makes sense for your unique customer's needs and your brand's position. And then secondly, I know you asked for one piece of advice, but I'm giving two.

Kailey Raymond: I Love it, I'll take it.

Julie Roy: Secondly, I would say have a relentless focus on optimization. You should be in a continuous cycle of tests, learn, iterate and scale. And if you're comfortable, probably means you're not challenging enough. I think customer behavior, by nature, will keep us on our toes 'cause it's always evolving, but that's what makes data and what makes marketing fun.

Kailey Raymond: I really like this, that if you're comfortable, it means you're not challenging enough. That is very insightful. I so appreciate you being here, Julie. It was really great to learn from you and hear some of the ways that you're approaching data-driven customer engagement marketing at DSW. Thanks so much.

Julie Roy: Thank you, Kailey. Appreciate it.

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