loyalty economics for retailers

7/26/2019 Loyalty Economics for Retailers

1/16

LOYALTY

ECONOMICS

FOR RETAILERS

MOVING FROM OPAQUE COSTSTO CLEAR PROFIT

Manu Sarna, Vice President,

Loyalty Strategy & Analytics

RETAILBRIEF


2/16

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Loyalty Economics for Retailers /

2015 Aimia Inc. All Rights Reserved

INTRODUCTION

2 Side by Side: Three Marketing Cost Categories3 Evaluating Marketing Tactics4 The New Data-Driven Dawn, a New Targeted Tomorrow5 Benefits to Using Nanotargeting: A Weekend

Shopping Trip6 Managing Retailer Confidence and Risk

8 Loyalty and Measuring ROI9 Retail Dynamics Know No Border10 Loyalty-Enabled Nanotargeting Takes Centre Stage12 Conclusion: Data-Driven Loyalty is the Future of

Personalization and Retail Economic Success13 About the Author

Table of Contents

Receiving deals on your smartphone.Researching products on yourdesktop and buying them via amobile app. Scanning a QR codein the store, then checking onlinereviews when you return home.These examples certainly dontrepresent your Grandmas shopping

journey: In her day, she waited untilher local store opened, then traveledthere, hoping what she neededwas on the shelf. Today, of course,the path to purchase is radically

different. Consumers shop wherethey want, how they want and whenthey want, often with mobile devicefirmly in hand. In fact, a recentCatapult Marketing study found that44 percent of surveyed shoppershold their smartphone while theywalk the aisles. And 37 percentof customers use a PC/laptop,smartphone or tablet to performshopping activities for pet, alcohol,baby or grocery items.

The new empowered, distractedshopper navigates a fragmented,

multi-channel universe where thejourney to checkout is complexand winding. This has created a seachange for marketers, who have beenforced to re-evaluate the money theyspend on traditional tools to win

consumers over, includingmass-distributed circulars andone-size-fits-all discountsand promotions.

At the same time, Canadas retaillandscape has drastically shifted.New entrants such as Nordstromhave set up shop, and old names likeShoppers Drug Mart and Safewayhave consolidated. As marginsshrink, retailers are combing theirbooks and eyeing their supply chain,

looking for every cost-saving measurethey can find. The fight for theconsumers share-of-wallet has neverbeen greater.

To meet the needs of shoppers andstay ahead in a competitive landscape,retailers realize they must presentshoppers with the right offer, at theright time and in the right channel that is, nanotargeting, wheremessages are customized and tailoredto meet a single consumers needs.

Retailers are trying harder to

retain the customers they have,says Jennifer Steckel Elliott, aToronto-based marketing strategyconsultant. They really need to bedoing analysis to be sure they targetthe right customer segment withthe right offers.

While the technology and skill setsare still evolving thanks to theintersection of smart data andadvanced loyalty programming, thenotion of the one-to-one marketingof nanotargeting is finally becominga reality. Ultimately, we believenanotargeting will become thecornerstone of future marketing

efforts and retailers will leave masspromotional campaigns, such asflyers, circulars and discounts, behindEnabled by well-analyzed loyaltydata, nanotargeting will become anattractive alternative that increasessales and improves ROI.

Several forward-thinking Canadianretailers are hard at work figuringout how to deliver this data-driven,loyalty-boosting vision, but areenjoying varying degrees of success

due to different capability levelsand the overall complexity of theseefforts which, far from an IT projectis a company-wide endeavour.

One challenge most companiesmust immediately overcome is theassumption that CRM and loyaltyare interchangeable. CRM, whichmanages interactions with currentand future customers, is actually

just a small component of loyalty,which uses currency and smartdata to have conversations withcustomers and nudge individuals to

change their behaviour for a mutualreward. To rev the full CRM engine,companies leverage those customerdatabases and combine them withadditional demographic and shoppinginformation to get a 360-degree viewof their consumer.

This is where the future economicsof loyalty marketing and ultimately,nanotargeting comes in. Withshopper information gatheredthrough well-run loyalty programs,retailers can implement bettertargeting and glean importantinsights that dramatically affecttheir own bottom line.


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2 / Loyalty Economics for Retailers


SIDE BY SIDE: THREE MARKETINGCOST CATEGORIES

Currently, most retailers typicallydivide their marketing budgetinto three cost-driver buckets:Promotional discounts andflyers/circulars receive the biggestbucks, while loyalty programs comein a distant third. But while all threerequire some form of consumerengagement and include hard costs,CMOs often consider the first two,while enormously expensive, to besimply part of the cost of doingbusiness. Some companies evenhold the erroneous opinion thatflyers are profit centres and thecost of discounts and promotionsare born by vendors, so loyaltyprograms are the most expensiveof the three. Nothing could befurther from the truth.

For example, the costs associatedwith flyers and promotions arestaggering typically $15M to$90M alone for an annual print runof a national Canadian retail flyerprogram (based on 2010 data of twomajor Canadian general merchandiseretailers). And yet, many CMOs

consider them simply the cost ofdoing business, a necessity they muststick with because their competitorsalso use a similar tool.

Certainly there are other largemarketing costs, including creativeand mass media but we haveleft these out of this discussionsince they are typically less than0.2 percent of sales. Mass marketingdoes play an essential role tocomplement the three marketingcost drivers listed above, as theypassively reach those consumers

who have zero percent share ofwallet with the retailer today.These efforts build awareness andconsideration for non-shoppersof a retailer. On the other hand,discounts/promotions, flyers andloyalty all require some current levelof engagement by the consumerwith the retailer.

But marketers must measurethe true cost of these three costcategories. Some insist that vendorsfund discounts and promotions,so therefore the cost is theirs(the vendors) and not ours (theretailers). Some go even further tosay that since vendors fund the costof the promotion and buy space inthe flyer, it is actually a profit centre.This may be the most expensive,mistaken claim in retail today.

Keep in mind, money spent onflyers means profit is drained awaywithin the consumer-vendor-retailerecosystem. The point is, flyers arenot cost-effective and dollars arebeing spent inefficiently.1All of thesecosts are potentially dilutive andwhile there is some upside to eachof these levers, there is also a cost.

The obvious question: Will Canadianretailers abandon costly, inefficientflyer programs and shift moremarketing resources to loyalty?Experts agree that many retailers willtry, but we are still a long time away

from replacing the mass-market flyer.

Canadian consumers are veryconscious of price and value1, saysKen Keelor, retail industry expert andChief Executive Officer at CalgaryCo-op, who says many Canadianconsumers are still devoted to theirflyers and retailers dont want torisk losing them. The majority stillpore over their flyers every Thursdayevening, and it would take a lot ofcourage and huge financial risk for aretailer to cancel it, he explains.

In addition, retailers dont yet seeloyalty as a replaceable alternative toflyers, according to Dave Mazzone,who has held senior marketingroles at Marks and Canadian Tire:Everybody talks about wanting tokill their flyer programs, he says.Theyre hugely expensive, theyre ahuge time suck, and they take lotsof effort and lots of margin dollarsthat you know are just being thrownaway. But the reality, he adds, is

that companies get nervous aboutstopping. They dont have a goodalternative to replace the sales theyget from the flyer sell-throughs,he says.

The Power of ROIOn the other hand, Mazzone adds,there is a tremendous pressure tobe more competitive and meet thechallenge of price compression.Vendor dollars cant be looked atas free money anymore, he says.

Perhaps that will play into loyaltysfavour if vendors start balking atcostly flyer promotions, and loyaltyenthusiasts can persuade CMOsthat the ROI is there to justifynanotargeting efforts. Lets takea look at the numbers:

Measuring net sales:Clearly there are a number ofdifficult-to-quantify downsides forthe three main marketing buckets.What is easy to quantify is the totalcost for a given retailer. Take thissimplified profit and loss example

for a hypothetical national Canadianchain lets call it National Arco:

Net sales $518M

Gross profit(before all marketing costs) $212M

In-store discounts ($93M)

Flyer ($15M)

Loyalty program ($6M)

Gross profit(after marketing expenses) $98M

The magnitude of the marketingcosts is clear, especially thehigh costs of in-store discountsand flyers. The question becomes:given the potential upsides anddownsides of each cost category,what can be done to grow sales andreduce these potentially dilutivemarketing costs? We believethe answer is data-informed,loyalty-driven nanotargeting.

1 Kenric Tyghe, Raymond James, via The Globe and Mail


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2015 Aimia Inc. All Rights Reserve

DRIVER OFMARKETINGCOSTS

APPROX.COST AS %OF SALES DETAILS

DISCOUNTS/PROMOTIONS

Up to 28%2 Highly variable

by retailer, particularlywithin hi/lo retailing

Discount is onlyactivated if apurchase is made(i.e. fully variable)

Proportion ofcustomers wouldhave paid full pricefor discounted SKUor competitiveSKU but then

switched

FLYERS 0.5%-1.6%2 National retailers

with between

2052 weeksin time and between

420+ pagesin length

Typically

1-5 productsrequired to drivenew traffic

Up to

50% of flyersnever read

As many as 80%of flyer pages readare not relevant

LOYALTY 0.3%-2.3% Dependent onrewards issuance(lowest in gas, highestin pharma)

Loyalty is onlyactivated ifpurchase is made(i.e. fully variable)

Cost of loyaltyis fixed relativeto sales

Proportion ofcustomers wouldhave paid full pricefor basket

SALE

EVALUATING MARKETING TACTICS

2 Corresponding annual sales from public records


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THE NEW DATA-DRIVEN DAWN,A NEW TARGETED TOMORROW

The next step towards nanotargetingsuccess will be for retailers toexplicitly generate store traffic not just reward towards drivingsales. Personalized offers andrewards just for checking inwill mark the new dawn of loyaltymarketing. Rewarding shoppersfor simply showing up requiresconfidence among store ownersthat the retail experience oncethe consumer enters the storesambience, item presentation,layout, etc. will drive sales.And personalized offers offer theopportunity for a multitude ofvariables to drive the points offering,from frequency of visits to seasonalbehaviour, distance from the storeand social network influence.

Today, retailers offer a variety ofincentives to come to their store,usually on the condition of buyingand often in the form of flyers withcoupons. However, retailers shouldconsider what they would pay to havea new customer visit the store once,and what they would pay to have anexisting customer enter the store oncemore than they originally planned?Most retailers would answer, Itdepends on how much they spend.

However, most retailers have agood idea of how large a basketan intermittent extra visit wouldgenerate. According to an Aimiainterview with a major Canadiangrocer, often it is 30-60 percent ofthe value of a regular customersbasket. For example, lets takeour National Arco example: Withan average (regular) basket sizeof $45 and a conversion rate ofapproximately 30 percentof customers, the value of anincremental visit is clear (see Fig. A).

Keep in mind, this does not include a

lifetime value calculation; that would

overstate the impact of just one visit.

However, it does very simply illustrate

the break-even value up to which can

be given away to gain one extra visit

per person. So, there are significant

benefits to using nanotargeting by

encouraging mobile check-ins with

points to drive traffic compared to the

traditional flyer/coupon to drive traffic

only on the condition of a sale.

To be part of the consideration set

for a weekend shopping trip, points

to check-in should be delivered

both when competitor flyers are

read (typically Thursday night/Friday

morning) and when shoppers are

within physical proximity to your store

or your competitors. Segmentation

based on behaviour can be further

incorporated to optimize the

profitability based, in the case

of National Arco, up to $1.40.

The next phase ofnanotargeting will beexplicitly to generate

store traffic.

XX X =

Regularbasket

$45

Adjustment to regularbasket size

Value ofincremental visit

45%Margin

23%Conversion

30% $1.40

VALUE OFINCREMENTAL

VISIT

Figure A


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BENEFITS TO USING NANOTARGETING:A WEEKEND SHOPPING TRIP

CONSIDERATIONSET FOR WEEKEND

SHOPPING TRIP

RETAILER VISITSON WEEKEND

INCREMENTALREPEAT VISITS

In Canada, data from 5.2 million active members of the Aeroplan program provide fruitful sources ofinsight for Aeroplan partners. Whether your goal is to acquire, lift, shift, or retain, customer-centricdata allows you to design offers and campaigns that work.

PROOF POINT AROUND THE VALUE OF CUSTOMER-CENTRIC DATA

Partner 1 Partner 4

Source: Aimia client and coalition partner data

Partner 2 Partner 3

5.2MILLION

Active Aeroplan

members

Increase in

customeracquisition

Lift in basket

spend vs.non-members

Share-of-wallet

increase

Two-year increase

in retentionrates

6X +50% +56% +7.6%

SALE


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MANAGING RETAILER CONFIDENCEAND RISK

How can retailers move away from

focusing solely on transactional

behaviour and towards loyalty-based

nanotargeting, which may include

giving points to customers just for

visiting the store? The challenge

for retailers is confidence. Most

will feel compelled to engage

in cost recovery, e.g., visit this

weekend and get X points if you

spend Y dollars.

We believe, however, that this isa serious mistake: Not only will itradically reduce potential traffic,but it will skew towards self-selectingthose who were planning to purchaseanyway. Retailers must have theconfidence to believe that the storelayout, ambience, selection, service,quality etc. will be enough to getconsumers to spend with them.

According to Ken Keelor, the strongeryour offer, your in-store experienceand your relationship with customers,the more you can count on focusingon loyalty rather than prospecting.Loyalty can increase the customersbasket size or encourage them tocome in more often, he explains.Prospecting is important in bringingin incremental customer traffic on aweekly basis.

On the other hand, rewardingonly for showing up at the store isrisky, he adds: You are making anassumption that by showing up theywill actually buy something. I thinkconsumers shop very item-specificon a weekly basis.

However, we believe this model canwork given the conversion formulaoutlined above.

But its important for retailers to startwith simple traffic-driving loyalty

offers, and increase sophisticationover time. There are a multitude ofvariables that can be used to establishthe right points offer for any givenpotential consumer. These include:

Frequency of visits(easy to segment)

Basket size and profitability(easy to segment)

Distance from store(easy to segment)

Seasonal behaviour(medium to segment)

Social network influence(difficult to segment)

Its important to start simple for instance, with the value of anincremental visit as per the example

above, with variables added overtime. The tradeoff for retailers willbe when the incremental complexityof creating and managing a highlycomplex traffic algorithm andsegments outweighs the incrementalprofit optimization of altering thenumber of loyalty points.

Loyalty on the other

hand is the use ofcurrency and smart data to

nudge individuals to changingtheir behavior for a

mutual reward.


9/16 2015 Aimia Inc. All Rights Reserve

Loyaltys Economics for Retailers /

2015 Aimia Inc. All Rights Reserved

Retailersshould no

longer view

loyalty programmesas a quantitative in-house

currency; rather they could bea qualitative tool to influencecustomer behaviour, putting

the customer at thecentre of the

strategy3

66percent

of American

companies statedthat they already have amultichannel customer

experiencestrategy in

place4

The retail

environment ishugely competitive, and

brands who are generouslyloyal to their customers will have

significant advantages within theirmarkets. We already see big retailers like

Nike, Walgreens, Nordstrom, and Starbucksdoubling down on their loyalty building

goals by putting customers atthe center of their loyalty

programs, campaigns,

and rewards.4

In an increasingly competitive anchanging retail landscape, Canadia

retailers will need to keep up with thbest tactics and strategies in orde

to compete with their Americacounterparts. This means having

multichannel strategy and puttincustomers in the centre oloyalty program

3The Future of Retail Loyalty, Capgemini Consulting42014 Retail Trends & What They Mean for Loyalty, Big Door


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LOYALTY AND MEASURING ROI

A defining moment in successfulrelationship-building happens whena consumer, the deal hunter,formerly in search of the greatestbargain fast becomes a dealtaker and is presumably moresatisfied, shops faster and is quickerto make decisions because of moretargeted offers. For retailers, thismeans higher sales, higher marketshare and a higher profit mix. Forinstance, a Harvard Business Reviewstudy revealed that personalizedoffers have five to eight timeshigher ROI than traditional offers.5

For retailers, trading loyalty points anddiscounts for data and a more holisticview of customer spend means:

>More multi-buys of existingcustomer basket products, therebystealing share from competitors

>More incremental purchases fromrelevant adjacent products

>More high-margin, premiumproducts substituted forlower-margin products

To demonstrate this, we can examinethe National Arco profit and lossexample. Imagine smartphonepenetration is at 98 percent (todayit is more than 60%, according tocomScore). Imagine a mother of onewalks into National Arco, a place shevisits once every couple of monthsif shes passing by, but definitely asecond favourite to its competitor inher eyes. She walks into a beautifullycrisp store clearly labeled aisleswith no discount shelf-barkersand barely a shopper in sight. Asshe enters the store her large-screensmartphone buzzes with nine offers,three of which come up on thehome screen:

>Buy a second XXXX and get150 bonus points

>Try YYYY with a 50 percentdiscount today and 50 bonus points

>Buy ZZZZ best and get $2.50 offand 75 bonus points

Immediately, she engages with herphone and is interested in the second

and third promotions (she still hasa little of the first product-offer left

over from the last time she visited, butmight get it anyway). As she walks

the aisles, she knows the prices arevery good perhaps not the verylowest, but close enough. Today,

she earns only one point for every$10 spent, but the bonuses are thecompelling piece. When she used to

come to National Arco many yearsago, she earned 10 points for every

$10 spent on everything she bought.There were extra points on certainitems, but often they werent of

interest to her.

The biggest change for this shopper?The feeling that she is no longer

a deal hunter, but a deal taker.Consequently, she has a moresatisfied feeling and is able to shop

quicker in addition, she even buysmore items and spends more because

her emotions spring from gettinga deal on things that matter to her.After all, paying less for things you

dont care about is not a deal.

The curiousthing is that theconsumer views herselfas a deal taker, while

buying more items andspending more.

5Know Your Customers Wherever They Are, via Harvard Business Review Blog Network


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RETAIL DYNAMICS KNOW NO BORDER

Aimias 2014 Loyalty Lens research surveyed over 16,000 consumers in 10 markets worldwide, including the US andCanada, to explore trends around consumer loyalty, engagement with technology and attitudes towards data privacy.The results reveal that these issues for Canadian consumers are not that different from those of their neighbours acrosthe border.

55% 60%

42% 42%

42% 21%

28% 33%

45% 48%

Loyalty card penetration varies across sectors. Consumers comfort level with companies handling theirpersonal data also varies across sectors. (1 being thesector you feel least comfortable with and 10 being thesector you feel most comfortable with)

6.7

7.1

6.2

6.3

5.7

5.7

4.9

5.5

CANADA US

Consumers are more willing to share certain pieces of personal information with companies than others.

42% 52% 23% 33% 14% 20%

The majority of consumers are unlikely to use a digitalwallet. Those who are unlikely to use a digital wallet:

Consumers are more likely to download coupons on theirmobile device when they are at home. Of those whodownload coupons on their mobile device, the location

where they are likely to do so:

69%74%81%

68%

14%

23%

4%

8%

Supermarketsand Grocery

Pharmacy andBeauty

Fuel

DepartmentStores

Credit cardproviders

Supermarketsand Grocery

Telecoms/Mobile

LoyaltyPrograms

Online Retail

Home

In-Store

On-the-move

Email Address Mobile phonenumber


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LOYALTY-ENABLED NANOTARGETINGTAKES CENTRE STAGE

The loyalty times are definitelychanging: Loblaw Canadaslargest grocer launched apersonalized loyalty programand has publicly stated that in thefuture they hope to eliminate all oftheir paper flyers. Base loyalty pointsbecome the reason to collect dataon consumer purchases, and retailersare launching multiple loyaltyprograms to gather more data,including Esso Extra and Aeroplan,and Loblaws PC Plus andShoppers Optimum.

On the retailers end, there areobviously lower labour costs andlower inventory management costs,since discount price shelf-barkersand power-aisle busting promotionsbecome less necessary. There are alsohigher sales, higher market share, anda higher profit mix.

The financial model below showsthe difference between retailingtoday and retailing withloyalty-enabled nanotargeting:

Net sales $555M

Gross profit(before all marketing costs) $227M

Loyalty driven discounts ($42M)

Gross profit aftermarketing expenses $185M

Not only has the top line increasedby seven percent, but also the bottomline has increased by an eye-popping90 percent. ROI has increasedfive-fold, since marketing costs havebeen reduced to $42 million from$124 million (a two-thirds reduction)and profit has nearly doubled.

But retailers still face many challengesbefore they can declare loyalty-drivennanotargeting success. First, areretailers prepared for the dataonslaught that is necessary to drivean effective loyalty program that

can drive personalized campaigns?And, can they effectively drivenanotargeting to the SKU level?

According to Steckel Elliott,personalized offers drilled downto the individual customer areeffective as long as it is the rightitem or right reward but it takesa tremendous effort to do it right.Not everyone is taking the time todo the appropriate analysis, askingthe right questions for the rightinsight, and driving true businessrecommendations for results,Steckel Elliott notes. You reallyhave to spend the time up front.

Retailers should make sure not toget caught up in drilling downto a granular level to personalize toprospects, experts warn. You haveto look at how many variables makesense, says Steckel Elliott. Youhave to think about all your teams from operations to strategizing,marketing, communications andmake sure not to confuse them aswell as your customer.

Personalized offershave five to eight

times higher ROI thantraditional offers.5

5Know Your Customers Wherever They Are, via Harvard Business Review Blog Network

LOYALTYELEMENT

LOYALTY TODAYIN RETAIL

NANOTARGETINGIN RETAIL

BASE POINTSEARN RATE

>High earn rate(up to 2.3% value)

>General reason tovisit retailer

>Vendor-funded forspecific SKUs

>Consumer-agnostic

>Low earn rate(Reason to collect data

>Retailer-funded forspecific SKUs

> Consumer-specific


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Loyalty Economics for Retailers / 1


CONCLUSION: DATA-DRIVEN LOYALTY IS THEFUTURE OF PERSONALIZATION AND RETAILECONOMIC SUCCESS

Retailers have more access tocustomer information than everbefore. But to turn that data intodollar-driven insights that helpprepare for the new marketingworld of personalized offers, theyneed to have a solid foundation ofdetailed demographic informationabout each individual as well as acurrency proposition that triggersan emotional connection forconsumers. That is the power ofdata-driven loyalty programs thatgo far beyond simple CRM.

Todays smartphone-carrying,omnichannel consumers offertremendous opportunities forretailers, who can take the explosionof Big Data and turn it into valuableinsights that make offers moretargeted and relevant. But a CRMdatabase is not enough to make thishappen. For example, many nationalCanadian retailers have a database ofbetween 10,000 and 850,000 emailaddresses and believe that if they

can just grow this to a million or so,that they will have what it takes todeliver great offers to most of theircustomer base, according to an Aimiainterview with a major Canadian DIYchain. However, email is just the verybeginning of nanotargeting. Andloyalty cannot be easily evolved out ofthat kind of old-school CRM strategy.

Today, those retailers sitting on theiremail databases are facing severalfundamental hurdles:

>How do I acquire more insight towho this person is? Their age, theirgender, their income, their latestaddress, etc.?

>How do I ensure more consumersare subscribing to hear from methan are unsubscribing or labelingme as spam?

>How do I have a meaningful enoughnumber of core and marginalcustomers that I can communicatewith to move the needle in sales?

>How do I motivate consumers

beyond just price discounts,which are easy to replicateand expensive?

The bottom line is that the futureeconomics of loyalty in retail dependon a variety of factors: allocating theright budget to fuel a forward-thinkingprogram; looking beyondacross-the-board discounts andpromotions towards personalizedoffers and rewards simply forchecking-in; going beyondtransactional data towardsgathering appropriate drilled-down

demographic information; andproviding a value proposition thatdrives repeat visits and a long-termrelationship with todays consumers.

To focus your efforts, consider rallyingaround these simple principles:

>Place all your data efforts in serviceof customers.If you live by thisprinciple, customers will rewardyou for it. Serving customers withyour data efforts means seekingpermission, using data transparently,and rewarding them for voluntarily

sharing personal information. Eventhe largest social and search giantswill live or die on their willingness toserve their customers, rather thanabuse their trust.

>Start with transactions; addinteractions.If youre unsure whereto start your data journey, beginwith the transaction. Connecting apurchase to an individual customeropens up tangible and immediatebenefits you can devise offersthat increase lift, gain wallet share,and reduce churn, and you canmeasure the impact of each one.As your analytical ability grows,start connecting the dots from thetransaction to interactions throughsocial, mobile, or web channels tobuild a robust view of customervalue and potential.

>Build relationships based on trust,commitment, and reciprocity.Information is useful only ifit provides insight that helpsyou strengthen relationshipvalue. Customers are fickle andpromiscuous, but they are loyal

to brands that build trust throughtransparency, demonstratecommitment through recognition,and deliver reciprocity throughrewards. Data collected in service orelationships will pay dividends onthe investment.

>Treat data as a renewable resourceData has been called the new oil,but leveraging data to createlong-term enterprise value meansthinking of data less as a fossil fuelto be extracted and consumed,and more as a sustainable, renewal

resource. Treat your data as acapital asset rather than as amarketing expense, and use thatasset to collaborate with partnerswho possess the expertise to helpyou build real relationships withyour best customers.

If we rally around these principlesas marketers, we will ensure abright future in which technology,data collection, and marketingcommunications serve their properplace in building a future ofreal relationships.


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ABOUT THE AUTHOR

About Aimia

Aimia Inc. (TSX: AIM) is a data-driven marketing and loyalty analytics company. Weprovide our clients with the customer insights they need to make smarter businessdecisions and build relevant, rewarding and long-term one-to-one relationships,evolving the value exchange to the mutual benefit of both our clients and consumers.

With close to 4,000 employees in 20 countries, Aimia partners with groups ofcompanies (coalitions) and individual companies to help generate, collect and analyze

customer data and build actionable insights.

We do this through our own coalition loyalty programs such as Aeroplan in Canadaand Nectar in the UK, and through provision of loyalty strategy, program development,implementation and management services underpinned by leading products andtechnology platforms such as the Aimia Loyalty Platform and SmartButton, andthrough our analytics and insights business, including Intelligent Shopper Solutions.In other markets, we own stakes in loyalty programs, such as Club Premier in Mexico,Air Miles Middle East and Think Big, a partnership with Air Asia and Tune Group. Ourclients are diverse, and we have industry-leading expertise in the fast-moving consumergoods, retail, financial services, and travel and airline industries globally to deliver againsttheir unique needs.

For a full list of our partnerships and investments, and more information about Aimia,visit aimia.com.

Manu Sarna, Vice President,Loyalty Strategy & Analytics

Manu Sarna leads the US Loyalty Strategy &Analytics group. In 2014 alone his team hasdesigned loyalty programs for an airline, ahotel/gaming company, a specialty retailer,a healthcare company, a personal wellnesscompany and more. He brings over a decade

of consulting experience, having workedextensively with both Walmart and Tesco inthe UK on sales and category optimization. Helearned his strategic consulting craft with TheBoston Consulting Group, which he left to builda large retail analytics consulting firm before

joining Aimia in 2011 to lead the Canadianretail loyalty business for Aeroplan,Aimias coalition.


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Loyalty Economics for Retailers / 1


YOUR DATA

OUR INSIGHTS

RETAILCONNECTIONS


aimia.com

With more than 4,300 talented professionals in 20 countries, we can deliver results

for your business using our loyalty insights. We see relationships differently.

To see how our loyalty insights can deliver results for your business, visit us at aimia.com.


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SHOWROOMING AND

THE RISE OF THE

MOBILE-ASSISTED

SHOPPERSEPTEMBER 2013

MatthewQuintandDavidRogers

ColumbiaBusinessSchool

RickFerguson

Aimia

FEATUREDWHITEPAPERSHOWROOMING ANDTHE RISE OF THE MOBILE-ASSISTED SHOPPER

What causes consumers towalk into a store>>>

CONTENT

Perspective oncurrent business issuesthrough a loyalty lens

COMMUNITYEstablished to generate

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