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Analysis: Retailers get personal with loyalty

A new report from Oracle suggests personalization is a major theme for retailers developing loyalty programs.

In “Industry Experts Share Their Predictions for Customer Loyalty,” executives from companies including Oracle, Sony Pictures Entertainment, and several start-ups offer seven predictions for how retailers will build and rebuild their loyalty programs in 2019. Several of the predictions include some aspect of personalization.

Here is a brief summary of the predictions:

1. Loyalty programs to reward for customer advocacy. Retailers are starting to reward actions, such as referring friends, sharing posts, and creating content, in the same way that traditional loyalty programs reward the purchase of products. This is due to the proliferation of mobile devices and social networks making it easier for consumers to influence each other, as well as technology now enabling retailers to accurately track and reward “advocacy actions.”

2. Loyalty will be set free from traditional programs. Retailers will begin thinking about customer loyalty in every interaction. Not simply asking them to sign up for a loyalty program, but doing what is possible to ensure both short and long-term customer retention at any given moment. Direction will need to come from the C-suite. For example, staff may need access to restricted permissions or knowledge to act on instilling loyalty in the moment.

3. WiFi is the new channel for loyalty. WiFi is a seamless way to integrate loyalty schemes into the customer’s journey and the in-store experience by sending targeted content based on profile data and personalized invitations to join the loyalty program. Customers want brands to engage them at the right time, and WiFi is the easiest way to engage customers while they are shopping in a store and to promote customer loyalty on mobile.

4. Exclusive means exclusive. One area that loyalty programs will use to set themselves apart in the coming year is more exclusive and valuable rewards for top customers. Nonpublished, “secret” tiers with highly valued rewards and experiences that are shared by the recipients via social media will be used to drive broader commitment to the brand, as well as to provide an unofficial air of true differentiation from the competition.

5. Loyalty rewards and program types will be reimagined. To meet the growing demand of customers, 2019 will see the growth of companies adding tiered loyalty platforms with some charging for premium or top-tier rewards and services. More loyalty programs will also broaden their loyalty benefits to include related-category rewards in order to increase the experiential quotient. For example, cosmetic brands may start to partner with the fashion category for more robust offerings, or food businesses may collaborate with entertainment content companies.

6. Greater value creation will come with the consolidation of loyalty schemes. Consumers don’t have the storage space on their phones for more loyalty apps. A coalition model will enable consumers to earn points and rewards across a diverse range of participating brands. Consolidation of this nature will create more value for consumers and more engagement for brands in 2019.

7. Subscriptions to become new driver of customer loyalty. As society changes the way in which people consume, subscription models that encourage recurring customer relationships over one-time purchases will become more prevalent. There will be a convergence of subscription and loyalty programs in 2019, which will not only generate greater loyalty but will create a mutual commitment between brands and their customers.
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