Loyalty just got personal
These are certainly promiscuous times for shoppers as they increasingly seek out value. So it is no wonder that many retailers are currently improving their loyalty programmes as an intelligent route to keeping a better hold on shoppers.
In recent weeks a raft of retailers and hospitality companies have announced they are overhauling their loyalty schemes. They want to give more perks more easily to shoppers. Delayed gratification is not deemed attractive right now. But most of all the thing shoppers want is personalised offers and rewards.
Subscribe to TRBMany years ago when I did some work with Dunnhumby, the clever people behind the Tesco Clubcard, there was a belief that people genuinely wanted to receive mail-outs from Tesco – such letters through the post were called junk mail – because it involved relevant offers tailored to them. What they did not want was money-off deals on things they were never going to buy.
Tesco and its Clubcard have kept firmly to this strategy and despite last year celebrating its 30th anniversary it has kept ahead of the loyalty game. It recently came top in the Retail Loyalty Index (RLI) created by Bloomreach, HyperFinity and Eagle Eye, with it beating every other programme in the UK including the other major grocers.
Sainsbury’s came seventh, Lidl 12th, Iceland 15th, Waitrose 35th, Co-op 38th, Morrisons 43rd, Asda 44th and Marks & Spencer 50th. Clubcard was found to be a “very generous programme with plenty of options to redeem” and making shopping “extra affordable and easy”. Unlike many of its direct competitors it would seem.
From day one the Tesco scheme has always been underpinned by its data collection capabilities and ability to analyse this information to deliver personalised offers and it is this that other retailers are increasingly looking to apply to their loyalty programmes. Boots recently stated it is going to integrate more data and insight into its Advantage Card to improve personalisation with better tailored rewards depending on individual habits and preferences.
This move came on the back of research by the company that revealed 66% of loyalty customers stated that they want retailers to offer personalised offers on brands and products they most frequently buy. I’m pretty sure this is what they have always wanted and I’m surprised it has taken large retailers so long to start addressing this issue. They’ve been sitting on the data long enough.
In a similar move to Boots there has been an overhaul of the Sparks Loyalty card at Marks & Spencer. With this move the retailer stated its new programme delivers more rewarding, personalised experiences to its customers. Stuart Machin, CEO of M&S, suggested: “New Sparks is built around a much more personalised experience, no tricksy pricing, and real money rewards…powered by new and transformed data and AI capabilities.” Let’s hope this is the case and that M&S will see its programme move it up from that lowly 50th spot in the RLI table.
It is imperative that all retailers get a better handle on their data collection and analysis because there is a drumbeat building up around the increasing desire of shoppers to have a much more personalised experience with retailers. They’ve been reading so much about the power of AI and what it is going to deliver to them when they engage with retailers that their expectations are very high.
Managing that data and ensuring it is available across the whole of a retailers’ business and is also being surfaced for AI to leverage its value is certainly a serious challenge for all retailers. The ability to deliver much more personalised loyalty programmes represents an early indicator of their success on this journey.
