Mobile is the biggest thing to hit retail since the barcode scanner. Marketing teams have been scrambling for ways to make the most of the opportunity, but most initial efforts have been focused on coupons and apps rather than adding real value for the shopper.
Fifteen years ago, interest in loyalty programs was at a similar zenith, but recent research suggests that the execution fell woefully short of the promise. Most shoppers belong to at least one supermarket loyalty program, but other than getting the “member price” in the store, they have no idea what the program’s benefits are. In fact, very few customers received anything from the retailer after signing up.
The history of loyalty cards provides an appropriate example of what can happen when the shopper is left out of the strategy. The first loyalty cards showed up in the late 1980s, and over the next 20 years just about every food retailer rolled out a program. The promise to shoppers was lower prices and a better shopping experience in exchange for gathering data.
Looking back, it’s clear that the promise of loyalty has never really come to fruition. Shoppers are confused as to the benefits, largely because retailers were not clear at the outset what the goal was. A typical retail loyalty program generates a gigabyte of data per store per week. To derive any value, the marketing team must have some idea of what it wants from that data; many were just collecting information and waiting for shopper insights to fall out. This obviously never happened, so a couple of decades later most of these programs have become little more than discount programs that continue to collect mountains of data while offering no value to the shopper or the retailer.
By combining the opportunity of mobile with existing loyalty programs, both can be more effective for everyone concerned, especially the shopper.
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