Traditional retail loyalty programs born out of convenience to capture customer data are no longer working. Here’s why:
- Customers have member fatigue from belonging to over 14 loyalty programs
- Brands leave as much as $100 billion on the table in unredeemed points annually, reducing engagement and satisfaction
- Only 2 in 10 members are very satisfied with the level of personalization in their loyalty programs
The pandemic brought a new set of shopping behaviors and customer expectations that further put existing loyalty programs to the test.
In Q2 2020, consumers shopping from home sent global digital revenue skyrocketing 71% compared to the previous year. Consumers also changed how they shop online. For example, they are turning to social channels more frequently (purchases from social channel referrals were up 104% in Q2 2020). They are also more willing to change brands due to value, availability, and convenience.
Many consumers intend to keep these habits even after the health crisis ends (with increased expectations for convenience, access, ease, and hyper-personalization). That means a good loyalty strategy is more important than ever. Retailers must ask themselves:
How do we drive value for our customers and our business? Is it easy for customers to engage with our brand?
Yet the majority of customers (66%) still feel like they are treated like a number, not an individual. It’s time to right the ship. Well thought-out retail loyalty programs are critical ballast in this effort.