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Building a Retail App That Strengthens Customer Loyalty


By Jim Walz, Alliance Data Retail Services

Consumers continue to engage more deeply with their smartphone… because they value what apps can do for them. They have downloaded more than 75 billion in the seven short years since the first app made its appearance on a smartphone.

Although the original purpose of “application software” was to offer productivity tools and information – email, calendar, contacts, stock market information and weather – developers found consumers would download apps that offered other functionality, from entertainment to gaming to e-commerce.

While the consumer engagement with apps remains strong, the value for a retailer goes beyond the initial download. Retailers must view the app as the most direct customer engagement platform, and they must give customers a reason to visit their apps on a frequent basis, just as much as they want customers to repeatedly visit their stores and websites. An effective app will build a mobile relationship between the consumer and the retailer that leads the retailer to the coveted “mobile loyalists” shopper segment. Mobile loyalists will continue to do business with retailers in and out of the store. They are the adopters, brand believers and the retailer’s best bet for long-term relationships. And all retailers have to do is make the app experience worth their while.

Retailers considering an app should keep in mind five core considerations:

Build it for your best. A retailer’s app should reward loyalty and help customers embrace their passion for the brand. Given that 20% of customers typically account for 80% of a retailer’s business, the app should be built to reward those customers first, with the goal of elevating the brand in their minds in and out of store. The app is the virtual front door that welcomes your best customers into your brand. It lets them begin to take control of the path to purchase in a way that is not possible through a website, using the unique and powerful features of the smartphone hardware and software. Savvy retailers know that the consumer is now driving the path to purchase through their smartphone and apps.

Make it functional, not just fun. Mobile payment options are exciting and convenient, but are just one of the many utilities that customers want at their fingertips. Loyal customers seek greater personalization and interaction, such as the ability to track loyalty points and certificates, as well as the ability to look up account information, so they can see the balance on their credit cards and their available credit. Being able to provide feedback and share via the retail app builds additional engagement. Multiple capabilities of the app can lead shoppers on that path to purchase, engaging them even before the digital wallet is needed.

Take the relationship to the next level. An app gives a retailer the ability to build a one-to-one relationship with customers. With a permission-based framework, a retailer can recognize each customer as they walk in the store, and engage them based on their interests – perhaps with a tailored offer or discount, or information about new products that align with their preferences. By managing their app directly, retailers capture consumer insight, preference, & data that helps them gain even more insights about their customers to better serve them – whether browsing, searching, learning, or shopping … all mobile habits that will enable them to build stronger customer relationships. Better individual consumer insight and data delivers better targeting and segmentation, which leads to better sales. Bottom line … Retailers can build consumer loyalty through their app before the sale, at the sale, and after the sale.

Execute on the experience. An effective app blurs the line between e-commerce and in-store shopping, creating a seamless shopping experience. Again, the goal is to put them in charge of the shopping experience, letting them shop the way they want to, when they want to, where they want to and how they want to … like comparing products online with their smartphone while they’re in-store if that’s what they want to do, and letting them make purchases at home on the couch with their mobile device.

Keep it fresh. In order to keep customers engaged, retailers must continue to innovate through their apps, and keep the app refreshed with new features, new content, or new forms of interaction. For a retailer, ownership of an app provides ownership of a valuable piece of smartphone real estate. And while retailers are making strides in launching apps, a recent study indicates the majority of retailers do not have one, which can leave them vulnerable to competitors who covet their loyal customers.

Ultimately, the app can be the highway on the customer’s path to purchase, and a savvy retailer will populate that path with multiple mobile touch-points to complement the physical touch-points. For retailers, the smartphone offers an engaging platform to satisfy their customers’ appetites for deeper engagement and value, and apps are a smart way to keep, build, and earn the loyalty of their customers.

Jim Walz is director of digital solutions at Alliance Data Retail Services, a leading provider of marketing, loyalty, and credit solutions that uses the power of data to achieve results for its program partners.

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