Member Article

Paper chase: It’s time store loyalty went digital

Bricks and mortar retail has had a rough ride in recent years. The soaring growth of ecommerce, which has given rise to mobile commerce, has displaced the store in the hearts of consumers. Not only that, but economic austerity has caused shoppers to tighten their spending, driving down retailer margins in a bid to stay competitive.

Gaining - and retaining - customers has always been big business. However, in today’s retail environment, it’s ‘make or break’. Yet, despite this, retailers are trying to entice shoppers using outdated technologies and techniques.

In today’s digitally-driven society, retailers who are still using paper vouchers to incentivise offline shoppers risk losing out in the customer retention battle. While the material itself is not a huge problem, it’s the fact that these discounts are handed out in a generic manner, following a purchase, with no personal value attached to them which presents the challenge. Retail businesses want to give them a reason to come back, and money off vouchers given at the point of sale, is one of the ways to do this. However, in a fast-paced society full of shoppers with very short attention spans, we are likely to forget paper vouchers as soon as we leave the store.

Many brands have tried to combat this by turning to plastic card loyalty schemes, allowing consumers to collect points by swiping before they pay. This is clever in that it allows retailers to synchronise bricks-and-mortar activity with what’s going online. Though it often relies on redemption becoming an independent activity, in which the shopper logs onto their website to choose their prize.

Where retailers are missing a trick is mobile loyalty.

The average smartphone user picks up their device around 1,500 times each day – they are ready and raring to use it, as long as there’s value in it for them. By tailoring loyalty schemes around a portable device, retailers can move that value away from the end of the purchase and move it into real-time. The latest mobile devices are equipped with an NFC chip, enabling companies to target their customers’ phones based on their location.

Therefore, we now have the possibility of a shopper walking around the store and being offered limited edition mustard as they glide through the sauce aisle, or a 2-for-1 offer on vanilla ice cream as they reach the frozen section. Regular shoppers can even be identified by their device, to track and tailor offers based on previous behaviour.

What retailers need to do to close the gap on loyalty in the physical shopping environment is to make sure they channel as much activity as possible through a single device: the smartphone.

Apple’s Passbook is a prime example of an application that is changing the face of store loyalty. Users can collect points, spend electronic gift cards and redeem digital vouchers through the one piece of technology that they won’t leave the house without.

It’s time the store started embracing these new online capabilities, to make their loyalty offering more timely and convenient for shoppers. Then they will start seeing similar success rates to their online scheme, which is already much more personalised.

This was posted in Bdaily's Members' News section by Richard Kolodynski .