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Pulling another loyalty lever


Taking the long view of what is expected to be moderate consumer demand in the United States, it is apparent the primary sources of growth for retailers are to gain share from competitors and capture a larger share of wallet from existing customers. It’s why there is so much effort expended on the loyalty front, as retailers know success is dependent on keeping existing customers happy and rewarding them ever more generously for their loyalty. Target’s 5% Rewards program is a good example, but it is only one of many, and looking ahead to 2011 and beyond the whole area of loyalty is ripe for the expansion of experimental initiatives and the development of new ones that address deficiencies of the shopping experience.

Target is already experimenting with the Shopkick mobile application that allows users to receive points and other money-saving incentives such as coupons just for entering Target stores. Just last month the company began offering the location-based app at 242 stores in such major markets as Chicago, Dallas, Los Angeles, Miami, Minneapolis, New York and San Francisco. Target has been aggressive on the mobile front and offers a robust app for its tech-savvy shoppers so it would seem likely the company would expand the location based concept after the holidays whether it is with Shopkick or another provider.

But why stop there? Most of the loyalty efforts in the retail world tend to focus on savings incentives, but shopper loyalty is driven by the experience as well. Airlines understand this and offer their most valuable customers preferential treatment in the form of seat selection and check-in. Those concepts would seem to apply well to the retail world as shoppers who achieve elite status based of their volume of spending would have access to a dedicated checkout lane.

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