Download OMNICHANNEL LOYALTY: CRACKING THE CODE

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JUNE 2013
omnichannel loyalty:
Cracking the Code
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RIS RETAIL
MATURITY LADDER
Maturity Ladder:
Omnichannel Loyalty
The RIS News Retail IQ Report Maturity Ladder is a
diagnostic measurement tool for a retailer’s state of
technology advancement in a specific category. There
are four key phases: 1. Basic – minimal capabilities,
2. Intermediate – mostly basic with some advanced
capabilities, 3. Advanced – mostly advanced capabilities with some limitations, and 4. State-of-theArt – comprehensive capabilities are fully integrated
and up to date. Note that it is possible to be on more
than one step of the ladder simultaneously as specific technology components and processes are upgraded in phases
4. STATE-OF-THE-ART
· A complete array of technologies, including databases and
analytics, are fully integrated across channels and transparent
across departments, allowing for unified customer service
· Organizational silos are eliminated, allowing full collaboration
among marketing, IT, logistics, store operations, etc.
· Loyalty program elements and offers are available to
shoppers seamlessly across physical and digital channels,
creating a single omnichannel presentation
· Big data is integrated into marketing plans, allowing for
highly nuanced and targeted offers
· A set of performance metrics is established
to demonstrate ROI
3. ADVANCED
· Downloadable coupons, personalized online fliers, mobile apps linked to the
loyalty programs, and other digital rewards are made available
· Shoppers have real-time access to reward status, with auto-alerts and the
ability to instantly redeem awards
· A robust level of interaction is taking place on social media outlets like
Facebook and Twitter
· Campaign management is integrated across channels
· Big data is captured through multiple digital channels
2. INTERMEDIATE
· Corporate structure is reorganized so that campaign management can be coordinated across departments
· Investments are made in technology upgrades, including databases, analytics and Web platforms, making
use of cloud offerings whenever possible
· A policy is established respecting shoppers’ tolerance for digital promotions as well as their privacy
· Forays are started into mobile marketing (such as text promotions), social media engagement
and website personalization
1. BASIC
· Silos predominate as departments like marketing and IT pursue separate agendas
· Loyalty programs are mostly geared toward financial incentives without an effort to understand shopper tendencies
· Loyalty data is collected but not leveraged for deeper insights
· Websites offer coupons and promotions, but they are not personalized
· Smartphones and social media remain largely untapped
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omnichannel loyalty: Cracking the code
In the retail marketplace of escalating competition and innovative
new concepts that are empowering digital shopping like never before
there is nothing a retailer covets more than loyal customers. Today
three-quarters of U.S. households are enrolled in at least one frequent
customer program. However, just 44% are active. So while technology-based loyalty programs have become ubiquitous, their utility and
appeal to shoppers are not automatic. Too many retail companies have
built loyalty programs that don’t actively engage their customers or
give them compelling reasons to use them. The solution resides in
shifting from loyalty systems that were largely designed in a singlechannel environment dominated by stores to one that seizes the opportunity to engage customers and cultivate loyalty through a fully
integrated omnichannel approach.
39%
Retail
31%
Travel, Hospitality
21%
Financial Services
9%
Other
There is nothing a retailer covets more than loyal customers. These
are shoppers who return again and again despite what the competition offers, who are not just looking for the lowest-priced bargain,
and who recommend their favorite retailers to their friends. They see
enduring value in what a good retailer offers and identify with the retailer’s brand, price image, level of service, quality and ambience.
Shoppers like these are rare and valuable, and the process of
cultivating them is a complicated combination of science
and art. It is one thing to attract a shopper to your store,
but quite another to keep her coming back.
There was a time when merchants used to engender loyalty by getting to know their shoppers personally. Good
ones remembered names, faces, preferences, family
members, birthdays, anniversaries and more. This was
a simpler time. Today, however, large retailers rely on
technology rather than personal contact to build and
nurture relationships with shoppers.
Retailers began to use technology for loyalty marketing
in the late 1980s as grocery chains like Ukrop’s and
Source: Colloquy Loyalty Census 2012
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Jack Kennamer
President,
LOC Enterprises
The industry will
have to flip the current model by letting
the consumer tailor
their engagement
with each merchant.
So I as a consumer
would say I want to
get e-mails from this
merchant, connect
with this one via
Facebook, and that
one via Pinterest.
LOC Enterprises, LLC, based in Cincinnati, Ohio and with offices in Atlanta, Ga. and Wichita, Kan., is the
creator of the LOC Card®, the first
truly universal loyalty enrollment/
engagement system that provides
the most effective, cost-efficient,
customer friendly and privacy-protected solution for connecting consumers with merchants’ rewards
and loyalty programs. LOC Enterprises has teamed with Logicalis,
an international IT solution and
managed services provider, and
VMware, the Palo Alto, Calif.-based
global leader in virtualization and
cloud infrastructure, to create an
IT infrastructure that allows consumers to use the LOC Card all
over the world. Other LOC Enterprises partners include top scanner
manufacturer Motorola, Conductiv
Software, a leading developer of
mobile POS systems; and SHC Direct and rDialogue, loyalty solution
providers. For more information,
visit
www.locenterprisesllc.com
and www.LOCcard.com.
Insights
To Boost Loyalty,
Let Shoppers Tailor
Relationship with Retailer
Q: As retailers have moved toward an omnichannel operating model,
what have been the biggest impacts on their customer loyalty efforts?
JACK KENNAMER: For retailers, ‘consumer-centric’ is a nice way of saying being everywhere your
customer is. But let’s look at this from the customer’s perspective. They don’t necessarily want you to
be everywhere they’re at, such as in their Facebook feed or seemingly everywhere they turn around.
Consumers are entitled to their personal space, and their e-mail address and cellphone is ‘personal
space’ no different from their house or their laptop computer.
Q: How do retailers find the right balance?
KENNAMER: You want to avoid having customers feel that they’re getting pummeled with information. I had a customer say in a focus group that she felt their e-mail address had been ‘compromised’
– that it was a tool she had previously used to communicate with friends and family, but it was now so
swamped with other things that she could no longer find the content that was still important to her.
When customers give retailers their e-mail address or like them on Facebook, they expect them to
be good stewards of that information, and a good steward doesn’t abuse that access. There are good
steward merchants that send relevant content occasionally, and there are other merchants that pummel the consumer with multiple e-mails. The LOC solution, which operates as a single engagement
solution for multiple retailers, is an alternative bridge between the consumer and the merchant. It
operates without encroaching on the customer’s personal space nor leaving the merchant out.
Q: How can retailers make the best use of the analytics insights
they derive from customer data?
KENNAMER: There’s nothing wrong with a merchant using your purchasing habits and other information – that you as a consumer opt in to provide – to offer what they believe is a better experience.
From the retailer side, it also depends on the goals of their loyalty program. Are they seeking hardcore analytics that will allow them to serve up very specific offers and coupons sent directly to the
consumer, or are they just seeking to generally improve engagement?
Q: What do you see as retailers’ biggest loyalty challenges during the next few years?
KENNAMER: Every merchant, from the biggest to the smallest, realizes they need some type of
loyalty or rewards mechanism to communicate and engage with their customer. But if these programs
are going to swamp the customer – and omnichannel multiplies this possibility – the consumer just
won’t have the bandwidth to deal with it. The industry will have to flip the current model by letting
the consumer tailor their engagement with each merchant. So I as a consumer would say I want to
get e-mails from this merchant, connect with this one via Facebook, and that one via Pinterest. They
will need to be able to tailor what they want and how they want it, versus the merchant shoveling
everything at everyone. Give customers the ability to do what they can’t do now, but would do if only
knew it was possible!
There are already some good stewards out there, and there are others that are swamping the boat.
If a merchant lets a consumer tailor the relationship, those retailers will put a firewall between themselves and the other merchants who are not doing what the customer wants.
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omnichannel loyalty: Cracking the code
Vons (now part of Safeway) introduced loyalty-card (frequent shopper) programs. Scanning or swiping a loyalty card at the POS would
deliver points or product discounts not otherwise available. For the
first time, retailers were able to link scanned purchases with the
people making them, filling databases with “shopping basket” data
on individual customers.
The concept quickly caught on, and today three-quarters of U.S.
households are enrolled in at least one frequent customer account,
such as airline miles, hotel points and grocery cards, according to
McKinsey & Co. Colloquy, a Cincinnati-based loyalty organization
and consultancy practice, put the number of U.S. loyalty program
memberships in 2012 at 2.65 billion.
However, just 44% of these memberships are active, according to
Colloquy. So while technology-based loyalty programs have become
ubiquitous, their utility and appeal to shoppers are not automatic.
56%
56% of all customer
interaction happens
during a multi-event,
multi-channel journey.
Source: McKinsey & Co.
“Too many companies have built loyalty programs that don’t actively engage their customers or give them compelling reasons to
want to use them,” writes McKinsey analyst Liz Hilton Segel. She
also questions whether the programs, even when used, are driving
sales or increasing customer satisfaction.
“Fewer than 20% of loyalty members say their memberships are
influential in purchasing decisions,” she notes. In the grocery industry, chains like Albertsons and Shaw’s discontinued their loyalty
programs this year, and overall, 42% of retailers don’t offer a loyalty program, according to the EKN Benchmark Report “The State
of Loyalty in Retail” (2012).
The problem with many loyalty programs, blogged Forrester analyst
Emily Collins, is that they “largely revolve around financial incentives
that drive spikes in short-term behavior but don’t necessarily establish deeper or long-term customer relationships.” This leads to a sea
of sameness among loyalty programs and undifferentiated appeal.
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rajashree r
Global Head,
Retail Solutions group
Tata Consultancy Services
The customer
expects an engaging and seamless
experience across
channels. It is not
about transactions
and instead is about
interactions.
Insights
Loyalty Is Built on Unique
Experiences, Benefits and Rewards
Q: What have been the major impacts of the move to omnichannel retailing
on customer loyalty?
rajashree: In the new world of retail the customer is not looking at channels; she is only looking at a need to be fulfilled. Relationships are becoming increasingly non-linear and rewarding the
customer becomes very different from the traditional loyalty programs. The customer expects an engaging and seamless experience across channels. It is not about transactions and instead is about
interactions, especially unique experiences, appealing benefits and experiential rewards. To make this
happen retailers need a single view of the customer across channels to engage and influence shopping
behavior and create a roadmap for future functionality.
Q: Are there new omnichannel metrics that can measure a customer’s value to the retailer?
rajashree: Retailers have had standard metrics in place to determine their relative success within a specific channel. However, as new channels emerge and the shopping experience continues to
evolve, retailers are re-thinking how they measure success. Establishing omnichannel performance
metrics is crucial for retailers. Leaders in this area are establishing new ways to gauge the overall
shopping experience by combining traditional metrics with emerging omnichannel metrics, which
include net promoter scores, customer satisfaction, percentage of business from repeat customers,
cross-sell and up-sell, customer profitability, number of repeat visitors, and dollar value influenced by
brand advocates.
Q: What are some recommendations for making more productive use of data gathered via
loyalty programs?
rajashree: Customers expect loyalty offers to be consistent across all channels from an offer creation, delivery and redemption standpoint. Key recommendations include implementing an effective
and centralized cross-channel customer loyalty platform that delivers a single view of the customer.
Another recommendation is incorporating uniform data collection guidelines across channels for developing personalized loyalty offers based on customer profiles and preferences. And, finally, two key
recommendations: Adopt mobile technology to reach a target audience on the go and embrace social
media to engage customers in a two-way dialogue.
Rajashree R is the global head
of the Retail Solutions Group at
TCS. She has spent over 15 years
engaging with leading retailers in
driving their transformation and innovation programs. She has over
15 years’ experience in retail, with
expertise in the areas of Customer
Experience, Retail Merchandising
Operations and Innovation. At TCS
she led the creation of the Retail
Solutions group which has incubated innovative solutions in the areas
of the POS, Loyalty and Big Data
based Merchandise Optimization.
She also conceptualized the Retail
Innovation Lab which researches
and experiments
with new technology innovations in retail.
Q: In the next few years, what do you see as the biggest challenges for retailers in building
and maintaining customer loyalty?
rajashree: Customer expectations are at all-time highs and brand loyalty is at risk from competitive and marketplace pressures. So, retailers must devise new strategies to keep their valuable customers coming back. The shift to digital media, which enables retailers to listen and respond to customers, presents businesses with vast opportunities as well as challenges. Social media offers retailers a
method to be part of the conversation rather than pushing one-way communication. It has also given
the customer significant power to influence the purchase behavior of others and many retailers are flying without a cohesive social media plan in a rush to join the conversation, which could end up creating
brand confusion. The era of big data has given us the opportunity to collect and store massive amounts
of information about our customers, but harnessing that information across the organization is difficult. Many organizations lack the tools, technology and infrastructure necessary to create an effective
customer information strategy. Another big challenge is to build brand evangelists and not bargain
shoppers. If a loyalty program centers on offering customers special deals it trains them to wait for the
discount. Companies need to shift their focus to deepening the relationship with the customer and building evangelists that are less price-sensitive and more resistant to competitive overtures.
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omnichannel loyalty: Cracking the code
The solution to this problem resides in developing creative strategies from the voluminous shopper data collected via the loyalty
programs. “Customer intelligence helps marketers create customer
insights that improve their strategy and programs through targeting, segmentation and customized offers,” notes Collins.
Indeed, loyalty data has long been viewed as the key to unlocking
shoppers’ hidden wants and needs, especially when the emphasis
is placed on high-value and high-potential shoppers who could be
engaged through personalized offers tailored to their preferences.
However, as appealing as this potential was in theory, many retailers struggled to achieve measurable gains from their loyalty programs in the early years of adoption.
Ultimately, smart retailers began to crack the code and figured out
how to convert the data into personalized marketing initiatives that
did indeed keep shoppers coming back for more. Customer analytics specialist dunnhumby, for example, worked some magic for
Tesco, which became the U.K.’s largest food retailer, and it later
joined forces with Kroger, which has since become famous in the
grocery industry for targeted direct-mail campaigns.
In recent years, as more technology consultants and vendors have
entered the loyalty marketing space, a growing number of retailers
have been able to extract marketing nuggets from their loyalty data.
Growth in loyalty membership from 2010 to 2012
70%
45%
26%
Specialty Store
Source: Colloquy Loyalty Census 2012
-1.0%
Department Store
Grocery Store
8%
Drug Store
Mass Merchant
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Insights
Mike Burge
Chairman & CEO,
MI9
By having a
centralized customer
database complete
with the details of all
sales transactions
in all channels,
a retailer can
develop a full
customer profile
and purchase
history that better
serves his customer
and himself.
MI9 develops and supports a revolutionary retail platform that seamlessly integrates all store and ERP
functions and provides users with
information in real time anywhere
in the enterprise. Differentiated by
its elegantly streamlined architecture and lightning-fast processing
speeds, this system is ideal for
retailers seeking to provide a consistent shopping experience to customers and unified management
and reporting to personnel.
For more information visit
www.mi9retail.com.
Preventing the Information
Gaps that Erode Loyalty
Q: What are the biggest challenges to building/maintaining customer loyalty
that are specific to an omnichannel retailing environment?
Mike burge: The most difficult challenge is to create a pleasant and seamless experience every
time the customer shops, no matter how she interacts with the chain. Every time a customer changes
channels in a transaction, there is an opportunity for errors that can erode loyalty – an item is not
reserved for pickup, a send sale is overlooked or delayed, a return can’t be matched to the original
purchase, a loyalty award is withheld, an inventory lookup provides erroneous info, Web pricing isn’t
being honored in the store, etc. Controlling all these variables is a daunting task unless retail systems
connect in real time and all channels share the same central database.
Q: Are there new, more omnichannel-friendly metrics available for measuring a customer’s
value to the retailer? What do you see as some of the most important (or most promising)
metrics emerging?
burge: RFM (recency/frequency/monetary value) is still a valuable tool, but omnichannel adds complexity. By having a centralized customer database complete with the details of all sales transactions
in all channels, a retailer can develop a full customer profile and purchase history that better serves
his customer and himself.
Through analysis of this database, a marketer can redefine what constitutes ‘best’ customers or
establish multiple categories of ‘best’ customers. For example, a store shopper may seem to be of low
value because she makes a lot of returns to the store. Using omnichannel analysis, however, she may
emerge as a much higher value customer because she purchases a lot online and returns only a small
fraction of her total purchases to her local store.
Buyers will also have the granular information they need to forecast demand for each item at each
fulfillment point, thus satisfying customers and avoiding excessive overhead.
Q: Which tools/technologies are going to be most valuable
in creating customer loyalty going forward?
burge: The key to building true loyalty is having the right merchandise at the right price and making
the purchasing process easy, be it in the store, online or using one’s iPhone. Unless the retailer wants
to carry a large overhead, reliable item forecasting and intelligent allocation is critical. In this scenario
real time data and information access go hand-in-hand.
In addition, customer information, loyalty profiles and rewards need to be available in all channels. This is best handled using a centralized customer database. MI9 has built such a system. The
Intelligent Retail System delivers a complete merchandising system fitted with a data warehouse and
business intelligence at the center of its architectural framework, a robust store system with a built-in
loyalty program for field deployment, and then connecting them all with real time data communications through the MI9 Retail Hub. A store-level transaction takes less than two seconds to update
information and make it available to the entire enterprise. This is truly real time retailing and provides
the immediacy customers expect.
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omnichannel loyalty: Cracking the code
But the development of today’s successful loyalty systems took
place largely while retailing was virtually a single-channel environment dominated by sales through physical stores. Over the past
half-decade, however, retailing has morphed into an omnichannel
world in which physical stores have joined forces with websites,
social media and mobile technology to radically expand and complicate the retailing landscape.
As shoppers explore new shopping vistas, retailers have found
themselves with new opportunities to engage customers and cultivate their loyalty, and, in the process, have finally begun to realize
the broad potential of these programs.
“If Loyalty 1.0 was all about discounts, points and miles, Loyalty
2.0 is all about differentiation and engagement,” observes Forrester’s Collins.
New Connections
For starters, digital options – websites, social media and smartphones – provide retailers with new vehicles to recognize and reward loyal shoppers beyond the POS or direct mail. Shoppers can
now be contacted via text, e-mail, social media and mobile apps,
among a growing number of digital touchpoints.
2.65
BILLION
loyalty memberships in 2012
Source: Colloquy Loyalty Census 2012
Moreover, the variety of offers retailers can deliver through digital
media is much richer than ever before as they leverage new sources
of data about their shoppers as well as the technological power of
these channels. Retailers can also give loyal shoppers access to
an unprecedented level of information about products, particularly
the ones they are most interested in, and also use this information
to ratchet up important customer services.
Consumers increasingly rely on mobile devices “as companions to
their interactions with a brand” and generate behavioral, transactional and location data in the process, notes Forrester’s Col9
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omnichannel loyalty: Cracking the code
lins. Since mobile channels are highly trackable, loyalty programs
that collect mobile information “can create deep customer insights that drive personalized communications, experiences and
offers,” she adds.
For example, a retailer might use geolocation data combined with
preference and transaction history to recognize and remind a toptier loyalty member that she has “points to burn” when she enters
a store, suggests Collins. Or shoppers can receive offers on their
smartphones as they are returning from work and thinking about
what to have for dinner.
Do you Shop,
browse, research
or purchase online
with your mobile
device with
any retailer?
29%
Yes, excluding purchase
Mobile phones can also be used as a source for displaying loyalty
membership IDs, a method for points redemption, or an instant
program update channel, according to loyalty expert Colloquy.
Social media has become an entirely new playing field in which retailers and shoppers can interact with each other, expanding loyalty
from a transactional to a more emotional type of engagement.
“The big change in the loyalty business has been the emergence
of social media to engage and bond with customers in a truly personalized, relevant and emotional way at scale,” says McKinsey
analyst Marc Singer.
45%
No
Source: Forrester Research, The State of Retailing Online 2012
Shoppers can demonstrate their loyalty by “liking” a retailer on
Facebook or commenting on how they feel about a particular product or promotion (good or bad). Shoppers who are influential in the
social world can become a “net promoter” who blogs about a retailer’s products and services. BzzAgent, a subsidiary of dunnhumby,
gives sample products to such shoppers so they can share their
opinions via Facebook posts, photos, videos and blogs.
Public recognition – such as Foursquare members who compete to
become the “mayor” of a local retailer – is another way retailers
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omnichannel loyalty: Cracking the code
can form an emotional connection via digital means, notes Singer.
It’s about “highlighting a customer’s loyalty and value in front of
their friends, family and peers to create a multiplier effect on top
of the emotional connection,” he says. Social recognition also enables companies to tap into the powerful competitive nature of
their customers. Moreover, a badges-and-benefits approach yields
a data bonanza.
The flip side of the digital revolution is that if retailers thought they
could opt out of developing a loyalty program in the past that is no
longer a viable strategy today. Shoppers have become so empowered
through the use of digital platforms that they are increasingly able to
dictate the terms of their shopping experience. It is now necessary
for retailers to meet shoppers where they live digitally and constantly
figure out ways to attract their business and loyalty.
Moreover, the omnichannel world represents a quantum leap in
the complexity of loyalty marketing. Shopper databases, which
used to be limited to what was collected at the POS in the physical store, have exploded with new information from a wide variety
of Web and mobile sources. Retailers realize that this data offers
unprecedented insights into their shoppers, and thus greater potential to turn more of them into loyal customers.
“The trick is to use the incentive to ask and gather information
about their needs,” writes Gartner analyst Adam Sarner in a recent
blog. “Do they prefer self-checkout? Which channels of communication do they prefer? Do they go on holiday the same time each
year? Now’s the time to ask for that information.”
Along with aggregating and possessing new sources of information,
the world of omnichannel loyalty also brings with it a host of new
obligations. On a broad level, retailers must be wary of overloading
shoppers with too many communications or, worse, impinging on
their privacy. Shoppers must always be able to opt in or out of any
digital loyalty program.
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omnichannel loyalty: Cracking the code
Operationally, there are other caveats. For example, shoppers
should have real-time access to point totals and reward status,
with auto-alerts and the ability to instantly redeem awards. Store
associates and call center agents should be able to easily access
a unified, centralized loyalty program database to discover individuals’ purchase histories, along with their history of redemptions,
product returns, complaints and resolutions.
Fundamentally, the omnichannel loyalty experience needs to be
uniform, with all of the channels meshing into a seamless whole.
For that to happen, retailers may need to reorganize their companies so that departments like marketing and IT are working in sync.
But this scenario is far from the norm, as only 30% of respondents
to the 2012 RIS News Cross-Channel Benchmark Study study said
they are currently consistent across channels.
Takeaway:
If Loyalty 1.0
was all about
discounts, points
and miles Loyalty
2.0 is all about
differentiation
and engagement.
Omnichannel loyalty also requires tracking a new set of performance metrics that combine old and new KPIs, such as frequency
of visits, average basket size for loyal customers, cross-sell, up-sell,
use of multiple channels, brand awareness, the quality of customer
insights, and value of brand advocates.
These KPIs will be important factors in assessing the ROI for the
investment in an omnichannel loyalty program, which can represent a significant percentage of top-line sales.
Omnichannel Loyalty Leaders
Among the retailers who have been able to create a successful
omnichannel loyalty program, Seattle-based Starbucks has been
one of the leaders. The coffee purveyor became the first national
retailer to offer its own mobile payment technology combined with
its My Starbucks Rewards program, and the company now generates over three million mobile transactions each week in the U.S.,
accounting for approximately 10% of total U.S. sales.
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omnichannel loyalty: Cracking the code
Other elements of the Starbucks program include allowing users to
track their loyalty status on mobile devices and become involved in
the online community My Starbucks Idea, which encourages customers to have a voice in shaping the company’s future.
This year, Starbucks rolled out a way for shoppers to earn My Starbucks Rewards Stars for purchases of Starbucks packaged coffee in
grocery stores. The program is expected to be expanded to include
other Starbucks products sold through supermarkets this fall. The
Stars can be redeemed for free food or beverages in Starbucks
retail stores. This kind of multi-retailer loyalty program, known as
a “loyalty coalition,” can be found in several global markets but is
not yet common in the U.S.
Stop & Shop, based in Quincy, Massachusetts, has been a pioneer
in merging loyalty with mobile applications. For example, the chain
offers loyalty-card shoppers an in-store scanner device dubbed Scan
It! that they use to scan products as they shop, expediting checkout at
the front-end. The devices also display offers tailored to the shopper’s
purchase history and based on her location in the store. Last year, Stop
& Shop ported the functionality to a mobile app, enabling shoppers to
scan and receive offers on their smartphones.
Stop & Shop offers a separate app that allows loyalty shoppers to
receive targeted offers on their phones, which can be loaded onto
their loyalty cards for redemption. It also enables customers to
track gas points, look at the weekly ads, prepare a shopping list (in
beta) and order groceries via Peapod home delivery.
Percentage of Active Loyalty Memberships
2006
Source: Colloquy Loyalty Census 2012
46%
43.8%
39.5%
2008
2010
44%
2012
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Takeaway:
The big change
in the loyalty
business has
been the emergence of social
media to engage
and bond with
customers in a
truly personalized, relevant
and emotional
way at scale.
omnichannel loyalty: Cracking the code
Kohl’s also stepped up its omnichannel loyalty efforts this year, revamping its e-commerce platform and mobile technologies to support its loyalty program. The program has been tested in Texas and
is being expanded into 300 stores in California, with a decision to
implement it chainwide coming next year.
Smartphones and tablets will play an increasingly important role
in Kohl’s customer engagement efforts, according to CEO Kevin
Mansell, adding that “the program continues to provide significant
insight into how our customer shops, and more importantly, how
we are better able to influence her shopping behavior.”
Multichannel apparel retailer Coldwater Creek is enhancing its loyalty program by combining it with new private label credit cards.
“We believe that the best way to strengthen brand loyalty and provide an improved shopping experience across all of our channels
is to offer our customers a choice of credit card options, both of
which will be fully implemented with our rewards program,” says
Coldwater Creek president and CEO Jill Dean.
And finally, regional grocer Giant Eagle, recently enhanced its online and in-store experiences to increase engagement by offering
personalized toolsets such as digital weekly circulars, shopping
lists, menu planning and digital coupons that can be downloaded
to shoppers’ loyalty cards. Since launching the revamped site this
year, the chain has increased impressions by more than 40% and
boosted overall site engagement.
The development of today’s successful loyalty marketing systems
reaplaces old programs that were dominated by a single-channel
approach. The new loyalty paradigm offers retailers an opportunity
to leverage new media and new soures of data to produce an unprecedented level of relevancy and engagement.
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omnichannel loyalty: Cracking the code
Loyalty program memberships by industry
39%
Retail
31%
Travel, Hospitality
21%
Financial Services
9%
Other
Source: Colloquy Loyalty Census 2012
2.65
56%
of all customer
interaction happens
during a multi-event,
multi-channel journey.
BILLION
loyalty memberships in 2012
Source: McKinsey & Co.
Source: Colloquy Loyalty Census 2012
Loyalty growth
from 2010 to 2012
Do you Shop online with your
mobile device with any retailer?
Source: Colloquy Loyalty Census 2012
Source: Forrester Research, The State of Retailing Online 2012
Active loyalty memberships
Source: Colloquy Loyalty Census 2012