The Future of Retail Loyalty

2012: The Year of Engagement

It is no longer just about enrolling customers and getting their email address:• Programs will have to find innovative ways to

engage with all members, both new and existing• Engagement will move beyond the store and

successful programs will integrate into our daily routines

• Companies that do well will have made a human connection with their customer base - creating a lasting relationship

• New channels for earning and redemption will create opportunities to monetize retail loyalty programs

One of the biggest future changes for retail loyalty programs will be an increased focus on member engagement – interacting in ways we

have never seen before.

One of the biggest future changes for retail loyalty programs will be an increased focus on member engagement – interacting in ways we

have never seen before.

“This is the Dawn of the Relationship Era”*

*AdAge Magazine, 2012

Three Key Themes of Greater Engagement

Alternative Distribution

Increased Utility

Program Monetization

Movements towards greater engagement can be categorized in three main themes:

Movements towards greater engagement can be categorized in three main themes:

Alternative Distribution

SoLoMo = Social, Location and Mobile

Social Media • Retail loyalty programs will learn to leverage brand promoters• Use of social media will become more creative – not just pages and posts• Social media as an extension of customer service channel

Location Based Marketing• Leverages member location to push relevant offers through mobile• Retail programs will integrate with LBS for instant member acquisition

Mobile • Mobile wallets and mobile coupons will create instant gratification• Applications will provide greater access, connecting members with loyalty

programs and stores • Use of new mobile tracking solutions, in-store customer analytics and insights

Retail loyalty programs will acknowledge that consumers are now in charge of when, where and how they want to receive content.

Retail loyalty programs will acknowledge that consumers are now in charge of when, where and how they want to receive content.

Alternative Distribution

“A customer’s mobile number

will become more valuable

than an email or a phone number”

John Orlando, EVP Worldwide Marketing and Business Development, Sixth Sense Media*

*Loyalty 360 Survey “Where is Loyalty Marketing Headed in 2012”

Alternative Distribution

Daily Deals• Intelligent use of and collaboration with Daily Deal sites• Not just for customer acquisition but targeting existing customers to get

them more engaged• Integrated with SoLoMo strategies for increased social ROI

Partnerships • Retail loyalty programs will partner with other programs and retailers to

enable earning and redemption outside of the store• Creates new ways for members to engage in the program and earn faster• Feed into Program Monetization

Increased Utility

More Relevant Communication • More intelligent data will allow programs to deliver more effective and

relevant messaging - enhance member’s lives at each touchpoint

Instant Gratification• Create utility through automatic earning and redemption opportunities

creating a frictionless experience

Perceived Value of Retail Currency• Programs will address the retail challenge of transparent currency value by

creating more redemption options that are not just cash-back, but will include unique experiential rewards

Gamification• Use of game thinking and mechanics to acquire and engage members

Everything a retail loyalty program does, should create utility and enhance the member’s experience in-store and in every day life.

Everything a retail loyalty program does, should create utility and enhance the member’s experience in-store and in every day life.

Program Monetization

Partnerships With Everyday Merchants • Gas, Grocery, subscription services - new earning

and redemption opportunities outside the store

Partnerships With Other Loyalty Programs • Mutual exchanges between programs E.g. My Coke

Rewards and Best Buy

“Coalition” Style Offers • For consumers or for employee recognition

Gamification• Retail points for online/social gaming

Retail loyalty programs will move towards becoming a profit center and not an expense.

Retail loyalty programs will move towards becoming a profit center and not an expense.

Retail loyalty programs will start to generate revenue through the sale of their currency to other loyalty programs and businesses.

Other Changes to the Future of Retail Loyalty

New Industries in the Retail Loyalty Space• Utilities like cable companies, telecom

companies with retail outlets• Restaurants

Cause Related Redemption Options• Options to use retail currencies to donate to

social causes and charities

Greater Segmentation of Member Base• More like airlines, retail loyalty programs will

start rewarding best customers by creating tiers within the program

Questions?