Are stand-alone loyalty approaches anachronistic?
Through a special arrangement, presented here for discussion is a summary of a current article from the Mark Heckman Consulting blog.
Well over 20 years ago, the first "electronic" card based loyalty programs arrived to help retailers build further rapport with the most valuable shoppers (the 80:20 rule) and promote less often or differently to those outside that group.
With the limited technology of the day and inherent expense, retailers quickly gave up on the promise of targeted deals despite having mounds of customer data to smartly do so.
Today, shopping technology is exploding. Apps are so abundant and present so many functions that shoppers can be overwhelmed with choice — couple that with every major retailer having their own proprietary app, each with their own version of loyalty points or rewards.
Shoppers want automation, simplicity and consolidation of the many offers and rewards from each retailer, both online and in the physical store. Consequently, while loyalty cards live on, they are gradually giving way to shopping apps, wireless chips and other technologies that identify the shopper both online and in the store.
Further, options are emerging for shoppers to manage their own loyalty. Shopping sites such as retailmenot.com, allyou.com and others aggregate offers from multiple retailers for the shopper to access in one consolidated place. But these popular sites often lack full retailer participation, meaning they work independently from the retailer’s own website or shopping app.
Solutions like LOC (www.locenterprisesllc.com) enlist retailers to participate both in-store and online to extend the reach of their current loyalty program, by creating a consolidated online "shopping mall" where shoppers can access the full compliment of their favorite retailers’ offers and rewards. In-store, the LOC card or app either replaces or augments the retailer’s own mechanism of shopper identification and engagement.
Shoppers naturally love the idea, and yet many retailers remain deeply vested in their own websites apps, even though LOC and others in their space have heeded all the precautions of not accessing or sharing retailer’s proprietary shopper databases with other retailers or content providers.
Technology has accelerated shopper expectations and put the onus directly on retailers to elevate their loyalty game. A retailer, no matter how big, is just one piece of the shopper’s loyalty environment — not the alpha and the omega of the shopper’s needs, as many have viewed it in the past.
Concurrently, technology companies understand that working with (not around) the retailer is optimal, as it provides the most holistic shopper solution. On the other hand, if retailers remain guarded and over protective of their programs, ignoring the increasingly loud voices of their customers to become more holistic in their approach to building relationships, even their best efforts of offering stand-alone loyalty will miss the mark with the shopper.
Do you agree that retailers need to shift away from proprietary or stand-alone approaches to their loyalty programs? What pros and cons do you see in linking a store’s mobile app and its loyalty rewards to many of the popular shopping apps?