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Benefits of a Digital Loyalty Program

Andy Litherland By Andy Litherland

Most large retailers have introduced customer loyalty programs with the aim of increasing consumer sales by rewarding their best customers. In this blog we will take a look at the benefits of a digital retail loyalty program and give an insight on the new technology being utilized in this sector.

The basis of this blog is the full digital loyalty program that we are currently developing for Auntie Anne's UK who are the largest soft pretzel retailer in the world.

The principal aim of any retailer is to increase their market share by driving customers to shop at their stores. More customers mean more sales which results in more profit. The loyalty programs help retailers achieve this in a number of different ways.

Customers always want to feel like they are getting “real value” when they make any purchase. This has been even more important in the last few years when the economic climate has been unstable and consumers have less spare cash to make an impromptu purchase. Rewarding customers with loyalty points or targeting them with promotions and benefits entices the customer to visit the store. This increased frequency of customer visits is of massive importance to retailers. What’s more if their customers are working towards a free purchase or offer by collecting loyalty points then they have an incentive for making a larger spend than they may normally do.

As well as increasing sales from existing customers a loyalty program can also attract new consumers. Customers that visit a shop where they feel they have received value and benefits are more likely to tell friends and family about their experience. Word of mouth is huge for retailers and shouldn’t be underestimated.

Kids eating an Auntie Anne's Pretzel

Of course one of the biggest advantages is the collection of data regarding the consumers spending habits. Track which products sell better in the morning, which items the under 25’s prefer and which combination of products sell better together. This data allows for targeted marketing campaigns that drives sales even further. If you have a customer that normally buys a vanilla pretzel then suddenly you can target them with a deal on that particular product!

Going Digital

Smart phones and tablets have had a monumental impact on retail loyalty programs. Consumers expect the convenience of an app for their favourite shops and no longer want to have the hassle of carrying a wedge of plastic cards around with them.

The apps will normally display the customers loyalty card number as a QR code which are simply scanned at the shop when they make their purchase.

The app also provides the retailer with a number of marketing opportunities. Store locators, push notifications, promotions and social media links can all be incorporated giving the consumer a wealth of information at their fingertips. Customers can be rewarded with points for social media interactions such as Facebook likes or be given double points on their birthday. The possibilities are virtually endless.

Technology has also helped store owners. Simple POS solutions can be created using a tablet and relatively cheap image scanners. Employees of the store can enter the order on the tablet and scan the customers QR code in a quick and efficient manner. Orders and redemptions can be sent to the cloud where store owners can login and analyse the statistical data. Using this wealth of information retailers can formulate targeted marketing campaigns and reward their most loyal customers.

Future Technology for Retail

There has been a lot of news recently in the press regarding technology in the retail sector. Contactless payments have been introduced in a number of retailers with varying levels of success and Amazon has even been testing drone deliveries!

The technology we anticipate will have the biggest impact on the retail sector is Apple's new low energy Bluetooth technology called iBeacon. My colleague Craig wrote a great technical blog on this but in simple terms beacons can be placed in various parts of the store. These beacons emit a bluetooth signal that can be detected up to 50 metres away by smartphones which have their app installed. The apps can act on these signals to entice customers to their store using clever marketing and offers. Imagine a customer entering a shopping centre and immediately receiving an offer on their phone for a discount at their favourite retailer. We aim to be one of the first companies to introduce this technology into the Auntie Anne's UK stores when their loyalty program is launched later this year.

iOS 7 iBeacons

Loyalty programs are a massively important marketing tool for retailers. Technology has changed the way the programs are received by the consumers and we anticipate the introduction of Apple's iBeacon technology will transform the industry further.

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