Fact: retailers aren’t doing enough to keep their customers engaged.

Although many businesses have taken huge strides towards optimising their appearance and sales channels for omnichannel retail, when it comes to customer retention, their strategies are still behind the curve.

Before we start talking about what organisations should be doing, I think it’s important to acknowledge some ‘home truths’ about today’s retail environment:

  • Customer expectations are higher than ever, and shoppers will vote with their feet if these expectations are not met
  • Competition is rife, particularly in the online environment where business rivalry is not restricted by geographical location
  • 80% of adults in the developed world now own a smartphone, which makes it incredibly easy for shoppers to compare offerings – and go elsewhere

This (understandably) makes it difficult to connect with consumers in the first place, let alone build on that initial interaction to foster a long-term relationship.

And herein lies the problem; shoppers just aren’t turned on by current loyalty programmes. According to Loyalty360 research, most retailers experience less than 50% active participation and reward redemption within their loyalty schemes.

Why is this? I think part of the problem is down to the mechanisms that companies use to attract and engage loyalty scheme members. Loyalty360 notes that its annual award winners use 11 components on average within their strategies, compared to the market average of 7.5.

I’m not going to generalise on what these components are, although some of them are referenced in my previous blog – loyalty schemes for omnichannel shoppers – our top tips*. Instead I want to focus on the most critical element: mobile.

One of the big disconnects in retailer/customer relationships right now is the experiential role of mobile. Most businesses have made their websites mobile-friendly, especially following Google’s latest search engine algorithm update, but the same cannot be said of their loyalty schemes.

At the forefront of industry thought leadership, we’re talking about the use of geo-location technology to target shoppers’ mobiles in the store, based on their location. However, the reality is that most retailers are still fighting to align online loyalty schemes with points and offers collected and redeemed in the store.

Mobile’s influence not just on retail, but on all daily activities, is only going to increase, and building a mobile-first loyalty scheme could prove critical to retail retention strategies.

By channeling offers, managing points and posting communications through an application such as Apple Passbook, companies have the opportunity to make value-added interactions central to shoppers’ favourite device.

Very soon, consumers are going to demand that mobile drives the majority of their digital transactions, and is the main transactional device in their physical retail experiences too. Early adopters of mobile loyalty will be able to overcome any teething problems in this current, educational phase, ensuring that they have a market-leading loyalty scheme when mobile-first becomes a must.

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