In numerous conversations with brand and vendor representatives, Loyalty360 has seen the understanding of loyalty shift in a big way. Most executives and c-level officers are emphasizing the need for emotional connections with customers. Traditional programs are of course still relevant, but younger demographics are more and more concerned with feeling authentic connections with brands that share their views.
In a series of confident statements during a recent discussion with Loyalty360, two representatives from HelloWorld, a Merkle Company, doubled down on emotional connections. We spoke with Chris Wayman, EVP, GM Promotions & Loyalty, and Josh Yaker, VP, General Counsel, and they believe that changing customer behaviors have led to the necessity of this kind of engagement. They also believe that these changes will have significant impact on the future of retail. Brands will need to respond accordingly.
What is the biggest challenge or opportunity you are seeing in the market today?
Chris Wayman: Customer behavior and personal consumption behavior have changed. Today’s consumer seeks immediate, authentic interactions, creating relationships with brands whose values and corporate philosophy are well aligned. More than a trend, 49 percent of our addressable audience are comprised of millennials and Gen Zers. Emotional relevance and trust from retail brands is more important than ever. This makes the challenge of identity and informed interactions the highest priority.
The biggest opportunity is at the intersection of identity and loyalty marketing. The notion of cookie-based consumer marketing is vanishing. Brands must acquire a direct, known, one-to-one relationship with individual consumers. Then, they must define a journey transcendent of CRM and loyalty with more “moments” in order to gather more data. With that they can mobilize data to personalize and contextualize each moment, continually increasing the value that they are bringing to the relationship. 
How are you responding to these challenges and opportunities?
Chris Wayman: In some sense, the market is coming to us. Engagement, promotions, and loyalty combined with Merkle’s identity and full suite omnichannel capabilities are enabling us to meet brand objectives. We are evolving our definition of loyalty, particularly in our bringing together of Merkle Loyalty Solutions and HelloWorld into a single organization of 400-plus strategists, analysts, solution designers, and technologists. We have evolved our offering beyond traditional loyalty to a broader identity and personalization approach that spans the entire customer journey. In that, we have a spectrum of strategies and solutions working together across promotions, engagement, and loyalty. We are also broadening and bolstering our offering around data management, analytic services, organizational and change management, and business strategy services.  Most importantly, we are deeply integrating our offering with those of the core Merkle organization, bundling services such as media and promotions, identity and engagement, and CRM and loyalty.
What are brands asking you for today that you may not have seen 12 months ago? How about RFPs?
Chris Wayman: All brands are working on customer strategy, and loyalty has become synonymous. 80 percent of companies are in some form of digital transformation. 90 percent of them are experiencing obstacles to achieving transformation. Engagement, promotions, and loyalty marketing have become intertwined with customer strategy transformation, fueling identity, acquisition, extended engagement, retention, and advocacy. Retail brands are working on identity solutions and personalization.
We see several key themes in RFPs that we didn’t see 12 months ago. First, we are being asked to define and deliver loyalty in the context of digital transformation, as the driver of identity.  Second, our clients are asking for loyalty solutions in the context of customer strategy, fully integrated with their CRM approach. Third, we are helping clients enable loyalty in new ways, more often not in the form of points or traditional programs. Finally, clients are asking us for help around change management, operating models, and organization processes.
What is the future of retail?
Chris Wayman: The future of retail requires that retailers focus on known identities and create more reasons for interaction and moments of value. It also requires that retailers mobilize data for personalization and contextual interactions across place, time, and channel. Consumers are looking for a seamless shopping experience across in-store and online. There is also a deeper desire on the part of consumers to feel a connection to brands and for the brands to be community- and connection-oriented, for companies to be focused on sustainability.
Many shoppers are now influenced more heavily by social media and where friends and celebrities shop than by traditional advertising tactics. We also know that 70 to 80 percent of consumers expect their experience to be personalized, so the ability for a retailer to trace client interactions through all channels is critical. Most often, traditional org structure and tech stacks obstruct that view, as well as improper consumer identification. Brands that can do this well are winning in the market. 
In addition, digital-first brands that have a brick and mortar footprint are re-inventing the industry and the consumer experience. The future of retail is a unified, seamless experience where a consumer gets recognized no matter where they are at in the ecosystem, and there is an intimate dialogue based on demographic, behavior, and purchase history.   
Where do you see retail loyalty going and what would you advise a current or new client in order to effectively compete?
Chris Wayman: Retail loyalty must evolve beyond traditional, predictable approaches and find a path to customer emotion and personalization. The customer moment of decision is not at the point of sale, and journeys must be inclusive of retailer, product, and service moments. Finally, organizational models and change management will continue to evolve towards a more customer-centric approach through the process of digital transformation.
How do you think the potential anti-trust suits against Facebook, Amazon, Google, and Apple impact customer loyalty? How will they play out?
Josh Yaker: It’s impossible to predict the outcome of antitrust investigations. The tech giants are masters of loyalty, and consumers turn to their products and services in so many daily activities. Their many platforms have transformed how consumers use digital services. If any regulatory or preemptive voluntary actions result from the investigations, it will be interesting to see whether those consumer behaviors can be replicated without the integrated advantages that consumers have experienced. Brands and marketers may have to adjust to a more complex landscape, which may be more difficult but could also provide greater opportunity for development of a more unique and independent brand affinity.
Do you have any concerns regarding new data privacy and security and standards?
Josh Yaker: There is no turning back on informed, consent-based use of consumer data. The experience with GDPR, the California Consumer Privacy Act, and other state laws on the books or under legislative development will ultimately swing marketing communications heavily toward permission-based data with more touchpoints for consumer choices on how their personal data is used. Brands will be best served by offering consumer engagements that are interesting, drive toward further brand actions, and enhance an authentic connection to the brand.

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