How Rewarding is Loyalty’s Personalization Proposition?

An interview with Joel Percy, Regional Director for North America at Eagle Eye

With inflationary stress serving to to drive renewed shopper curiosity in loyalty program advantages and an rising demand for larger program worth and personalization, retail loyalty entrepreneurs have extra alternatives to attach with buyers than ever earlier than. They’re additionally dealing with larger challenges to take action successfully.

Smart Marketer spoke with Joel Percy, Regional Director for North America at loyalty know-how firm Eagle Eye, to debate insights from the corporate’s current international survey report, Grocery’s Nice Loyalty Alternative; these embody what buyers are searching for most from retail loyalty and rewards applications at present, the place retailers stand on assembly these wants, and the way loyalty know-how suppliers can drive income and member engagement by delivering extra personalised and better worth experiences all through the whole thing of the brand-consumer relationship.

Smart Marketer (WM): Maintaining with altering shopper expectations and buying habits has change into a problem for even the savviest entrepreneurs at present. The truth that your report cites ‘alternative’ within the title is encouraging. Take us via the chance takeaways and the way you arrived there.

Joel Percy (JP): At this time’s excessive inflation, notably at grocery shops, has sparked a surge in (grocery) loyalty program progress and participation. Shoppers are eating out much less and cooking at house extra, translating to extra spending at supermarkets. Additionally they search to maximise their buying {dollars} by leveraging reductions, financial savings, and rewards.

Grocery retailers can win and retain buyers’ {dollars} and loyalty by delivering what they’re in search of most – worth. To have the best success, grocers should rethink how they use loyalty applications to adapt to altering shopper behaviors. Our analysis discovered that 63% of customers need retailers to supply extra reductions on a extra complete array of merchandise. Practically as many, 56%, need deeper reductions on the precise objects they buy, highlighting the necessity for grocery loyalty applications to be extremely personalised to offer particular person customers with the advantages and affords they worth essentially the most.

WM: Have been there some other findings from the report that have been shocking to you or that you simply assume could also be shocking to loyalty program directors?

JP: Our analysis discovered that 84% of customers imagine receiving extra personalised affords would assist them lower your expenses. Millennials (89%), Era Z (88%) and Era X (87%) have been notably occupied with such affords, although different age teams additionally need affords that acknowledge their buying habits and desires on a private stage. Nevertheless, practically a 3rd (31%) of grocery loyalty program managers cited the power to ship personalised affords as their largest problem, usually because of points with legacy know-how and the lack to simply scale their promotions.

WM: Shoppers are clearly anticipating a extra knowledgeable stage of interplay from the manufacturers they select to do enterprise with, together with extra personalised communications addressing their particular person pursuits and desires. How can loyalty entrepreneurs ship this hyper-personalization, notably within the grocery class?

JP: Entrepreneurs ought to use buy information to personalize new member affords inside the preliminary journey, which may present as much as a 40% lower in new member churn. Utilizing buyer information to create extra related promotions will increase supply utilization by an element of eight. Promotional and loyalty methods will be at their only if they will ship affords and promotions to clients when they’re almost certainly for use.

WM: Expertise developments in areas reminiscent of machine studying, generative AI and language fashions seem like driving a lot of the power to hyper-personalize communications. What can loyalty entrepreneurs with out giant know-how budgets or entry to those capabilities do to ship comparable experiences to program members?

JP: Loyalty entrepreneurs with restricted budgets ought to evaluate what they’re doing now. They will test the affords being redeemed versus affords being issued to see the place enhancements will be made. They will additionally take a look at the timing and supply context of promotions.

For instance, are affords going out on Wednesdays earlier than a grocer’s gross sales begin on Fridays every week, or vice versa? Are messages being despatched mid-afternoon earlier than a buyer is about to start their each day commute house and prompted to cease by for “15-minute-dinner offers”? Contextual advertising – or Advertising and marketing within the Second – is a superb instance of this, whereby promotions are despatched at particular moments that maximize relevancy and consider points like location, the time of day, and even the climate.

WM: Are you able to share some extra examples of what this ‘bespoke’ loyalty expertise appears like in follow and the way it may be delivered alongside the buying journey? Are there examples of manufacturers you’ve got labored with (or simply admire) which can be executing effectively on this space?

JP: A customized loyalty expertise encourages members to work together extra often, producing extra buyer information for retailers to leverage. Utilizing buy information to personalize new member affords within the preliminary buyer journey can improve member basket dimension by 16%. This shopper information, mixed with contextual cues, permits entrepreneurs to ship personalised and completely measurable advertising at any level the place it might be related in the course of the buying journey.

This method generates outcomes for grocery retailers; UK grocer Asda has seen 5 million of its clients obtain and signal into its rewards program because it was launched a yr in the past, and it has change into a key driver of incremental gross sales and sustaining share in a really aggressive market.

WM: Some loyalty leaders in North America are making inroads to ship hyper-personalized loyalty experiences. The correlation between personalization, retention and income helps this focus. What suggestions do you’ve got for retail entrepreneurs searching for to up-level their loyalty applications to capitalize on this correlation?

JP: Personalization, contextual advertising, and gamification all supply alternatives for entrepreneurs to enhance their loyalty applications. Personalization acknowledges previous buying behaviors and different elements to ship essentially the most related affords. A reduction for that product could be precious for buyers who’ve been shopping for diapers usually. In distinction, the identical supply would solely be significant for a client with a historical past of shopping for diapers. The latter shopper could be extra prone to worth and use a reduction for one more product, which their buy historical past exhibits they purchase usually.

I discussed contextual advertising earlier; it takes personalization to the subsequent stage by incorporating contextual elements reminiscent of time of day, day of the week, location, climate, and many others., to market to clients “within the second” when they’re almost certainly to react to and interact with the supply.

Gamification prompts customers to interact with the loyalty program longer and extra often. Shoppers love video games, and loyalty applications are excellent for combining the interactive points of video games with financial savings. Our analysis exhibits that two-thirds of customers (80% of youthful customers) take part in video games or contests via their loyalty applications; increasing gamification components can additional improve the engagement charges of those precious cohorts.

WM: In the event you had one extra piece of closing recommendation for retailers and loyalty advertising professionals as they consider technique for 2024, what would that be?

JP: Loyalty entrepreneurs must hearken to and ship on what clients need. Prospects need real-time promotions and a extra complete vary of affords for the inexpensive, private-label manufacturers. Past worth alone, clients need to be acknowledged as people, with affords that acknowledge their distinctive buying preferences and are delivered when most useful. Additionally they have a powerful curiosity in collaborating in challenges and video games, a chance many loyalty entrepreneurs have but to make the most of.

Above all, assume like a model that drives buyer loyalty, not only a model with a loyalty program.


Joel Percy, Director of North America for Eagle Eye

Joel is an skilled Loyalty and CRM govt with deep experience in retail personalization and information monetization. At Loblaw Corporations in Canada, he helped design, launch, and run PC Plus, one of many world’s first totally personalised digital rewards applications. He has additionally consulted with retailers across the globe on the design of personalised advertising applications. He’s at present the Regional Director at Eagle Eye, the place he helps shoppers develop loyalty and drive gross sales by constructing digital connections with their clients.

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