What does customer loyalty look like in 2016

Retail loyalty is no longer about giving shoppers a better price than a rival brand. It’s not even about rewarding customers for the things they buy. It’s about complex retailers showing they understand complex consumers in order to nurture long-term relationships.

If the evolution of omnichannel has made retail as a whole more complicated, loyalty has become one of the most difficult elements to get right. Shoppers are given not just a choice of brands to buy from, but channels through which to buy. This has created very real scenarios in which consumers will shop with one retailer in-store, but prefer a competitor online – and both those retailers want their entire spend.

In order to achieve this, retailers need to look at two elements of their offering. First, they need to look at their overall customer experience. Is the customer experience consistent across all channels and touchpoints? Can a customer buy from wherever they want, get their order fulfilled however they want, and if necessary return it wherever they want? This relies on having a single view of the customer and a single view of stock.

Getting the basics right should not be underestimated in the omnichannel retail environment. Too many customers are lost simply because a retailer failed to meet their expectations; expectations that are rising all the time.

Secondly, retail businesses need to focus on making sure their loyalty schemes are relevant. Do they target customers through the channels they are using? Do they provide incentives that are meaningful to each individual shopper’s tastes? Do they connect what the customer is doing digitally and physically? According to recent iVend Retail research, a quarter of consumers would like regular incentives sent to their mobile phone or retail app, allowing them to collect and redeem points holistically in-store and online.

Mobile loyalty is a really interesting point for discussion. In the past, retail has been very much focused on using data to drive customer advocacy, by tailoring promotions through greater insights on regular shoppers. While this still rings true – a greater level of personalization is required in the store environment in particular – this current phase of loyalty, driven by mobile, is about making life more convenient for the consumer.

As we mentioned in a previous blog post on the loyalty roadmap, WPP’s CEO of The Store, David Roth, outlined the changing values that nurture long-term customer relationships. It’s no longer just about budget; health and convenience also rank highly on shoppers’ agendas, and that’s where mobile loyalty schemes such as digital passbooks come into their own.

We’re rapidly moving towards a world (indeed, some technology-forward consumers are already living in it) in which it’s possible to shop, pay and collect loyalty points from a single device. Gone are the needs for wallets stuffed with credit cards and promotional vouchers.

So while customer loyalty might look complex in 2016, the route to success is relatively simple – on paper at least. Retailers need to gain complete customer and stock visibility across their entire estate, and then develop a data-driven loyalty scheme that utilizes technology to reward the customer wherever they shop.

This will not only enable them to customize experiences in a way that adds real value on a personal level; it will ensure ever-rising expectations aren’t disappointed when a loyal customer comes to redeem their points or offers.