Defining the next generation of retail loyalty
Retailers have always been on a mission to capture consumer loyalty; they have just expressed and measured it in different ways. In the year 2020 as the retail industry prepares to be inspired about the future of retail, Exchange Solutions is focused on defining the next generation of retail loyalty. We believe retailers who find success are those who do the work to transform their loyalty applications from perceived cost centers into profitable loyalty and engagement capabilities. These retailers have adopted the following best practices to do that work:
- Optimizing Platform and Program Operational Excellence for the Best Consumer Experience
- Using the Right Mix of SaaS and Managed Services to Leverage a Vendor as a Strategic Partner
- Targeting Consumers with Personalized Offers for Higher Engagement and Profitability
This next decade, it will be exciting to watch the rest of the industry step to the challenge of ever-evolving “consumer-first” principles. Read on for examples of how future-focused retailers are setting the standard for consumer loyalty across the retail landscape.
1) Optimizing Platform and Program Operational Excellence for the Best Consumer Experience
As an extension of a retailer’s brand experience, the loyalty program needs to integrate with the overall consumer experience easily and seamlessly. Besides being simple to use and understand, it must be available to the consumer in all channels, always.
Maintaining a high standard of excellence in all aspects of the business is the cornerstone for a leading national fuel and convenience retailer. They believe that the value they offer to their consumer starts with delivering the best quality product selection with consistent consumer service across well-stocked locations. They also enhance their value delivery by operating a reliable, secure loyalty program that has scaled with their business.
Their loyalty program easily facilitates new member acquisition and member access to their information and offers online, in-store, in-app and at the pump. It also operates with consistent, real-time access service levels so that members never lose an opportunity to enhance their interactions however they chose to connect.
With dependence on a program that has reliable uptime and is supported on a secure platform, the retailer operates all areas of their business, without risk of negative consumer experiences whether in-store, at pump, online, in-app or through other communication channels. The retailer continuously keeps their consumers’ loyalty to their brand.
2) Using the Right Mix of SaaS and Managed Services to Leverage a Vendor as a Strategic Partner
The benefit to owning a loyalty program is having mastery and control with the flexibility to promptly make informed business decisions and execute quickly against program objectives. However, the future-focused brand will require enablement with the right tools, balanced with the appropriate mix of expert support from a strong team, regardless of if they are internal, a group supplied by a preferred vendor, or both.
In the case of a national health and wellness retailer, the recent transition to their own proprietary program from a 3rd party travel coalition still required a strategic partnership with a loyalty and engagement vendor. While partnership with a vendor was the right decision for their organization, they also knew that maintaining control and access to their consumer data was paramount to their success. Setting up their business users to create and maintain retail campaigns, promotions and manage engagement throughout various consumer journeys was made possible via access to a fully-featured loyalty program console, powered by their vendor.
Creating space to scale for the future and continuously improve their program also meant finding the right blend of supportive managed services from their vendor. Utilizing industry expertise in advanced analytics, offer distribution and strategic consultation, the retailer maintained their focus on core initiatives while leveraging additional resources as an extension of their team. The retailer is committed to learning from their program, iterating with their vendor not only in ways that help their own business but also help their partner build and deliver a better loyalty technology product.
3) Targeting Consumers with Personalized Offers for Higher Engagement and Profitability
Technology should make it easy for retailers to deliver on all promises to their consumers. Those who stay committed to serving their consumers at a 1:1 level are the ones who will succeed long term, regardless of what industry changes come along.
A national home improvement retailer is a prime example of how personalized offers benefit both the consumer and their business. Their desire to optimize engagement with their consumers online meant tapping into their known – and unknown – consumer behavior data. Behavioral data was used to assess what was valuable to their audience and aligned with their business goals in order to find the best practical application on their website. To help reduce the number of abandoned carts they saw on a continuous basis, consumers were targeted with individualized offers that:
- Increased monthly online revenue
- Decreased abandoned carts
- Stretched average basket size; and
- Optimized return on promotional spend
As consumers submit more data in their interactions with brands, retailers like this one will continue to respond with relevant offers that reward consumers with the benefits they actually value instead of simply take advantage of. This practice has helped set this retailer up for the next decade of their own successful transformation.
Tomorrow’s retail loyalty story was written yesterday. It started with getting the fundamentals right; it is powered by the right technology choices and guided by the continued focus on delivering what consumers value. To win consumer loyalty, future-focused retailers will usher in the next generation with best practices that will only enhance their overall relationship with consumers and maximize program value to their business as a whole.