Can next generation loyalty programs save traditional retailers?

life-saver-ring

Nearly any product or service is now a mere mobile phone search away. Some products and services require less than four micro swipes on an app before the goods arrive at the customer’s door. What hope do traditional retailers have of remaining relevant?

Fortunately, while many pundits have declared the death of retailing, these predictions may be premature. Brand loyalty hasn’t disappeared completely in light of recent changes in buying habits, and there’s an opportunity for retailers to digitally transform their loyalty programs and shopping experiences to capture a new breed of shopper.

Thanks to their ability to collect reams of data, retailers can now more effectively generate loyalty by creating more engaging and personalised experiences. SAP’s Customer Experience suite, for example, offers a highly scalable platform for capturing a vast number of data points about customer activity in real-time.

Stephanie Waters, global retail industry principal at SAP Customer Experience, recently told Adweek magazine, “Each time a consumer swipes their card or enters their email, data from each touch point aggregates into a singular profile, giving retailers a consistent view of each customer and the ability to deliver contextualised experiences.”

We’re also seeing gamification principles being included in loyalty programs to further collect data and build these experiences. According to JWIntelligence, 51% of consumers say that if a layer of competition were added to their shopping activities, they would pay more attention to their behaviours and actions. Retailers can then use the information they collect through loyalty programs to see which gamified activities motivate customers and incentivise these actions appropriately.

But rather than just reward customers for purchases, we can recognise them for their behaviour, such as their social media sharing, their referrals, and their in-store visits.   In fact, the immersive capabilities of mobile apps provide compelling rewards for retailers looking to engage customers through these means.

For in-store experiences, technologies such as Bluetooth beacon networks and geo-fencing allow retailers to understand exactly where a customer is physically located, and then deliver a personalised experience through an app on their mobile phone.  In Bengaluru, India, a start-up called Interaction One has deployed more than 300 beacons to create an IoT enabled shopping district where retailers send real-time notifications of new products, deals and discounts to customers in the immediate area.

Moving away from points?

Much of the focus of traditional loyalty programs has been on the accumulation of points, but we know that outside of airlines, industries struggle to create a value proposition because customers simply don’t use their points or forget they have them.  In the US, it is estimated there is cumulative value of $100B of unused points.  This can create a significant balance sheet problem as businesses must carry these reward obligations on their books.

A solution could be to use blockchain loyalty programs that reward customer behaviours with crypto tokens that can be readily exchanged into other programs or even cash.

MobileBridge Momentum, a new infrastructure platform for loyalty, allows companies to reward customers for their attention, business, brand advocacy and data insights. Customers can earn tokens by investing their time, attention and good-will to promote the companies they like. The tokens can then either be redeemed in a company reward program, exchanged into real-world money or into other company’s loyalty programs.

What’s important to remember with all of these opportunities is that brand loyalty can no longer be taken for granted when customers have instant access to nearly any product or service at the touch of a button. Loyalty programs need to take into account customer behaviour and leverage big data, mobile apps and location data to provide the fantastic personalised experiences that customers expect today.


Matt Hampshire is Sales Director, DXC Oxygen Digital

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