Despite the promise of ‘big data’ and the revolutionary impact of the internet on retail, the business of communicating with your customers at the point of sale and rewarding them for their loyalty is all too often still stuck in the 20th century. With new options and tools now emerging that benefit both customers and retailers, Ecrebo’s Dr Hassan Hajji says the loyalty sector may now finally be changing to give customers an experience that’s both stress-free and rewarding.
Retail has changed in extraordinary ways over the last 20 years. The internet has revolutionised shopping, bringing convenience, speed and an experience consumers not only want, but have come to expect, every time they shop. This has coincided with the era of ‘big data’ which promised to deliver great value to both customers and retailers. Yet loyalty schemes often seem to be lagging behind, with many having barely changed since their widespread emergence in the early 90’s. All too often loyalty schemes can detract from, not add to, the customer experience.
Despite the hopes that ‘big data’ would lead to smarter schemes, in many cases customers are still being bombarded with offers that are irrelevant to them, that are inconvenient to access, or through channels they don’t use. Rather than rewarding loyalty, these ‘offers’ can do quite the opposite and push people away.
A recent report found that for one in three shoppers, loyalty schemes are a key component of their relationships with brands. Yet the vast majority of schemes surveyed in the report weren’t seen to deliver what people actually want: namely, being easy to use and offering them a personalised experience.
Part of the problem is the hassle that is often associated with loyalty schemes. Filling out forms, having plastic cards which you never have on you when you need them, and offers that aren’t relevant, all add up to an experience that can be unnecessarily tedious. But at a time when nearly 90% of sales still come through bricks and mortar stores, loyalty schemes are still essential for driving long-term loyalty and defining how customers experience your brand.
It’s not all gloom and doom, however, and the tide now seems to be finally turning as the loyalty sector catches up with the rest of retail. There are now more avenues, channels and formats available to retailers and customers to engage with loyalty schemes than ever before. It’s no longer solely through loyalty cards or mobile apps : even existing point of sale technology, for example, can now be used by retailers to create offers and messages that can be tailored to in-store customers based on their basket contents or purchase history and delivered as a coupon or digitally at till. It will also soon be possible to recognise customers through their payment cards, meaning plastic loyalty cards are no longer essential, making it even more convenient for customers and adding up to a better experience.
M&S is just one of the many retailers that have taken advantage of the growing trends in targeting and personalisation. They are offering customers real-time money-saving coupons at the point of sale which are personalised to individual tastes. What enables these personalised offers is better understanding of their customers’ habits, tastes and interests.
By effectively understanding and identifying customers, M&S have benefitted from better targeting through the ability to dial up or down the segmentation of consumers and rewards. They have for example, both ‘broad brush’ offers that reward customers with money off based on regularity and size of spend; as well as highly targeted offers such as a recent deal that gave those buying high-value wines the opportunity to join the M&S Wine Club. This means better, more relevant offers that more accurately reflect their customers’ preferences and enhance loyalty, whilst delivering significant financial benefits to M&S at the same time. Because of the better targeting, M&S are seeing double digit redemption rates. They’ve also seen increased trip frequency, greater basket size, and increased cross-category engagement. It’s a win-win for customers and retailers.
So how can you make loyalty a positive, not negative experience for customers? The key is giving customers offers they will value. This can be achieved, quite simply, by understanding your customers better. With the multitude of customer touch-points and channels, it can be difficult to track how your customers like to shop. But if you can join-up customer touch-points and interactions you can build a holistic view of their preferences. Once you have it – you can give your customers the offers and experience they’ll truly value.
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