How Mobile Is Changing Customer Loyalty

Deploying loyalty programs can be a difficult for most retailers. The rewards are often challenging to determine and many still might not find that their initiatives stand apart from other programs.

Now, mobile offers new opportunities for retailers to address all of those challenges. Loyalty programs are a great resource for learning more about customers, but mobile provides far better data on individual behaviour than anything before. Primarily because it uses the stored information to intelligently target personalized deals that can elevate retailers’ programs above their competition.

Collect and Redeem

Consumers today are hungrier than ever for a mobile loyalty experience. According to 451 Research, 49 percent of consumers wish more stores offered mobile apps that would enable them to collect and redeem loyalty points with ease. The retailers that do so will have a home field advantage, because 44 percent of consumers would strongly recommend a store with mobile loyalty and personalized rewards to friends and family, while 45 per cent would choose to shop at stores with mobile loyalty programs over stores that don’t have them.

“Mobile is one of the biggest keys for personalized communication with shoppers,” said Nikki Baird, managing partner at RSR Research. “I think part of the reason that apps as the basis for loyalty programs are going to be so important is because it really, truly enables one-to-one communication. Shoppers get real-time updates on their loyalty status, as well as a way to save coupons and offers. Retailers have a direct way of delivering those offers and tracking their redemption.”

However, many retailers aren’t exploring mobile loyalty as effectively as they need to to rise above their competitors. According to Capgemini, 79 percent of loyalty programs make use of mobile, but only 24 percent let customers use mobile to redeem points, and only 9 percent offer point redemption across all channels.

Successful Loyalty Programs

Let’s take a look at one of the more successful loyalty programs, the Starbucks Rewards program. Starbucks CEO, Howard Schultz, has lauded the initiative for combining mobile loyalty, payment, and in-store digital experiences in one place, this streamlining the entire experience. The app program has accelerated with 12 million active users making 7 million transactions each week, while engagement with the rewards program has also improved with 8 million active members.

Large retailers have been key innovators when it comes to mobile loyalty, but it will be playing a much more crucial role for small businesses in the years to come. “What really needs to happen is that some of these programs need to be created for the smaller mom-and-pop shops. That will raise more awareness, because a lot of these quick-serve restaurants and a lot of these small, frequently-visited shops are some of the ones that need these programs and it hasn’t been cost-effective,” said Sheryl Kingstone, research director of 451 Research’s mobility team.

She expects many retailers to turn to the mobile Web, instead. Whereas the native environment comes with lots of extra overhead, retailers can essentially build a “fake native app” that could include many features the real thing might boast. “It basically just acts like a mobile app but it isn’t as rich,” she said. “You can do a lot of the mobile Web that we couldn’t do a couple of years ago, and it can be on the device and act like an app, and it still gives the features and functions that retailers need for consumers to engage.”

There’s no longer any excuse for retailers of any size or scope not to incorporate mobile into their loyalty programs. Customers want it, stores can benefit from it, and developers are finding new ways to make it cheaper and easier to implement. Retailers who don’t adapt soon could find their loyalty offerings virtually cut off from customer headspace altogether.

For more on eCommerce solutions, contact us or see: Reshaping Your Value Proposition With Mobile

Blog Tweetables:

"Mobile provides far better data on individual behaviour than anything before." Tweet this!

"49% of consumers wish more stores offered mobile apps that would enable them to collect and redeem loyalty points with ease." Tweet this!

"79% of loyalty programs make use of mobile, but only 24% let customers redeem points, and only 9% offer point redemption across all channels." Tweet this!