This is not loyalty 1.0 – or even 2.0. Retailer loyalty programs are getting major upgrades in the wake of extreme retail competition and more demanding, tech-savvy consumers.
<p>By: Pat Walsh, Chief Business Development Officer, and Vice President of Supply Chain, Food Marketing Institute</p> <p>This is not loyalty 1.0 – or even 2.0.</p> <p>Retailer loyalty programs are getting major upgrades in the wake of extreme retail competition and more demanding, tech-savvy consumers.</p> <ul> <li>These efforts, once focused on direct mail and early card strategies, have evolved into highly sophisticated and multi-dimensional initiatives.</li> <li>Today’s programs account for more diverse customer journeys.</li> <li>Efforts are connecting with websites, apps, social media and in-store merchandising. </li> <li>Companies are pursuing more advanced personalized recommendations.</li> </ul> <p style="text-align: left;">Perhaps most importantly, today’s programs are complex in design but aim for simplicity in customer use.<br /> <br /> Graeme McVie, chief business development officer, Precima, discusses how to earn consumers' loyalty and using commerce to drive loyalty programs.</p> <p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/FpvnxLO10JA" frameborder="0" allow="autoplay; encrypted-media"></iframe> </p> <h5>Multi-Platform Programs</h5> <p>Consider the case of 7-Eleven, the convenience store giant with some 65,000 outlets worldwide. This retailer’s recently upgraded loyalty program has a wide range of elements and layers to ensure it meets the needs of diverse customers.</p> <p>For example, its mobile loyalty app, 7Rewards, has been expanded to allow customers to earn points for the purchase of hundreds of products. A new Facebook Messenger chat bot enables customers to sign up for the program, receive a digital loyalty card, and locate a store.</p> <p>At the heart of the loyalty strategy is the goal of providing an easy and relevant experience for users.</p> <p>“Customers shouldn’t have to do much to join and participate in the program,” said Tarang Sethia, senior director, CRM & Loyalty, 7-Eleven, in a presentation at Grocerytalk. “Our vision is to make every customer visit more valuable, so customers get value for everything they do with us.”</p> <h5>Embracing Digital Mindset</h5> In achieving its loyalty aims, 7-Eleven found it needed to expand its perspectives beyond its iconic role in the physical retail world. <p>“To create engagement, we needed to think more like a digital rather than a brick and mortar company,” he said. “We needed to get into the customer’s ecosystem.”</p> <p>The retailer is introducing new customer experiences that leverage the latest technologies to enhance engagement. Experiences benefit from augmented reality, gaming, artificial intelligence, and machine learning. Not surprisingly, 7-Eleven is targeting the most extreme high-tech experiences for younger generations.</p> <p>Technology at 7-Eleven is also solving age-old retail problems for consumers. These also have an influence on loyalty, such as the consumer’s need to do quick morning coffee runs without hitting long lines.</p> <p>“We are introducing payment methods to make this experience quicker,” he said, including self-checkout using a mobile phone.</p> <h5>Evolving Loyalty Journey</h5> <p><strong></strong>Wakefern Food Corp., the retailer-owned cooperative known for its ShopRite banner in the Northeast, has experienced a decades-long loyalty journey. </p> <ul> <li>Wakefern was an early proponent of frequent shopper cards.</li> <li>It embraced direct mail and later email marketing. </li> <li>The emergence of digital coupons was a milestone that advanced the company’s engagement levels.</li> </ul> <p>“We now have 7 million digital coupons clipped each week,” said Cheryl Williams, Chief Information Officer, Wakefern. “It’s a highly relevant form of marketing that allows for different touchpoints, including mobile, web and in-store kiosks.”</p> <p>Wakefern is known for its progressive ecommerce efforts since 2002, with products, promotions and pricing linked to its frequent shopper program. Loyalty efforts are highly focused on physical stores as well, with a range of new technologies boosting in-store experiences, from AI for replenishment to mobile scan for self- checkout. The retailer is also pursuing personalization efforts, some of which rely on partnerships.</p> <h5>B2B Side of Loyalty</h5> <p>Loyalty concepts aren’t just for consumer-focused companies. They are also relevant on the B2B side, such as for international food wholesaler Metro AG of Germany, which pursues loyalty efforts with professional customers in a range of countries.</p> <p>Metro has moved from paper-based programs to digital and personalized marketing to meet the needs of customers.</p> <p>“Our DNA was biweekly periodicals, but we’re shifting to digital touchpoints,” said Markus Pfruender, global director Data, CRM, and Data-Driven Marketing, Metro AG. “This includes email, but also social media.”</p> <p>Ultimately, an effective way to fuel customer loyalty is to provide a consistent experience across platforms. In this omnichannel era, retailers need to take into account all the ways customers are connecting with a company.</p> <p>“We want consumers to have seamless experiences regardless of the channel in which they are engaging,” emphasized Wakefern’s Williams.</p> <p>Retailers are increasingly aware that loyalty requires different approaches for different generations. Strategies should be based on targeted insights rather than broad-brush assumptions. Food Marketing Institute has collaborated with Precima on a multi-point thought leadership initiative that includes a webinar on the ins and outs of loyalty in the realm of food retailing. <br /> <br /> <a href="https://www.fmi.org/events-education/webinars/webinar-recordings/view/webinar-recordings-public/2018/03/08/next-generation-loyalty-get-it-right-in-food-retailing" class="button">Watch the webinar</a> <br /> <br /> <a href="https://www.fmi.org/industry-topics/technology" class="button-secondary">Download the Reports</a></p>
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