If there’s one constant in the retail industry, it’s change… and doing retail successfully means understanding the nuanced, sometimes-sudden changes in consumer behavior, and using data insights for business intelligence. Loyalty programs can be instrumental to this purpose.

 NEW LOYALTY MODELS AND EXPERIENCES

There isn’t just one way of “doing” retail any more, and many stores are becoming more adaptable to a variety of engagement strategies that can include product samples and curated box programs, subscription models, store-as-showroom, pop-up stores or member-only products. Loyalty programs have been key to this adaptability because they help personalize strategies for different customer segments.

THE LOYALTY PROGRAM APP AS A CENTRAL HUB

Although shoppers are constantly looking at their phones, retailers have a limited window of opportunity to gain consumers’ attention on the mobile platform. Through dedicated loyalty apps, or hybrid loyalty/ecommerce apps, retailers can earn a permanent presence in shoppers’ “digital space.” In most cases, there is no reason to separate storefront and loyalty apps, since rewards are meant to be earned or redeemed regularly. As such, many loyalty apps are becoming ecommerce apps, and vice versa. This is quite remarkable as it highlights how extensively loyalty programs have penetrated into the public image of retail, and into retailers’ revenue strategies.

The premier example of loyalty as a central hub might be the Starbucks Rewards programs, which does double-duty as a loyalty app and mobile wallet, so every purchase (at any location) is tied to rewards and mobile offers. The key: Data is collected on every purchase, since customers are paying directly through the Starbucks app. This is an ingenious strategy by Starbucks to unite an international brand around a personalized rewards program, adding the convenience of mobile payments, right on the customer’s smartphone. Another coffee brand (illy) has used its digital rewards program to drive product trial and discovery, such as different types of coffee or different lines of their coffeemakers. Both brands understand that digital rewards, offers and content must be front and center in order to retain and engage customers.

REWARDING INFLUENCERS

Retail shoppers are diverse in both their preferences and behaviors, and rewards programs can help get them involved with promoting the brand, in their own unique ways. “Influencers” are people who are knowledgeable or enthusiastic about a category or brand, or who have massive social reach with a specific audience. Influencers can be individuals, such as bloggers, but also communities. Through digital loyalty programs that reward for desired social behaviors (retweeting, for example), brands are investing in influential followers and earning credibility in their communities.

A MORE ACCURATE CUSTOMER VIEW

Loyalty programs are an accurate barometer for the retail sector in general as they are built for direct contact with customers. Program managers can drill down and see what customers are buying and how their purchasing habits have changed, recently and over time. When customers shop and visit more, the program rewards them, and that becomes a powerful incentive to keep shopping. Retailers with loyalty programs can also track long-term changes in shopper behavior, and use those insights plan revenue growth. There is no magic formula for retail loyalty because customers are always growing and changing – pushing retailers to stay one step ahead of the business plan. Loyalty programs help retailers change with the times, and stay relevant with every new generation of shoppers.