Retailers Boost Loyalty Programs to Meet Consumer Needs
BOSTON — When it comes to loyalty programs, retailers acknowledge they need to step up their game to win over today's tech-savvy consumer.
According to Boston Retail Partners' new report, The BRP Special Report: Loyalty Programs — Rewarding the Customer Experience, consumers' behaviors and shopping habits have evolved through new technology and expanded channel offerings.
The shift requires loyalty programs to go above and beyond the traditional "earn points and receive rewards" structure to play a key role in enabling the unified commerce experience and reinforcing customer relationships, the retail management consulting firm explained.
And retailers are factoring that challenge into their budgets.
"Retailers recognize the need for structured and meaningful loyalty programs with 62 percent increasing their budgets this year to enhance their loyalty programs and supporting technologies," said Ken Morris, principal, Boston Retail Partners.
The report found the marketing programs need to strengthen interactions with the customer and increase loyalty by enabling enhanced services and rewards, including:
- Real-time customer identification in-store to enable guided selling;
- Customized rewards based on customer preferences;
- Gamification to engage customers and encourage social interaction; and
- Mobile tracking and redemption of rewards and offers.
"One of the best ways to know the customer, reach the customer and deliver the right shopping experience is through a loyalty program," Morris said. "Offering customers exclusive perks, relevant incentives and personalized rewards encourages them to identify themselves while shopping and allows the retailer to further tailor the experience."
Key findings in the report include:
- Loyalty programs are a top priority for 46 percent of retailers.
- More retailers (883 percent) plan to have the ability to identify customers when they walk in the store via their smartphones in five years.
- More retailers (181 percent) plan to use gamification within loyalty programs in five years.
- A majority of retailers (56 percent) plan to participate in mobile loyalty applications in five years.
The BRP Special Report: Loyalty Programs – Rewarding the Customer Experience silver sponsors include Aptos and Enactor.