Paper chasing: Why it’s time store loyalty went digital

Let’s face it, the store has had a rough ride in recent years. The soaring growth of ecommerce, evolving into mobile commerce, has displaced bricks-and-mortar retail in consumers’ hearts. Not only that, but economic austerity has caused shoppers to tighten their belts, driving down retailer margins as they bid to stay competitive.

Gaining and holding onto customers has always been big business, but today it’s make or break. Yet despite this, retailers are trying to entice shoppers using outdated technologies and techniques.

I’ve already touched on this topic in my previous post – how can you nurture customer loyalty in a disloyal world?* – but I think, for this final blog in my mini-series on loyalty, it’s worth exploring the store’s customer retention role in greater depth.

It seems madness that in today’s digitally-driven society, retailers are still using paper vouchers to incentivise offline shoppers. The material itself is not a huge problem (although it’s not the most environmentally friendly approach), it’s the fact that these discounts are handed out in a generic manner, post-purchase, with no personal value attached to them.

I understand the principle of reaching customers at the point of purchase; retail businesses want to give them a reason to come back, and money off is one of the ways to do it. However, we as a society have a very short attention span, so are likely to forget paper vouchers the instant we leave the store.

Many have tried to combat this by turning to a plastic card loyalty scheme, where customers can 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, so 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.