WHAT’S IN STORE FOR RETAILERS IN 2017: SIX KEY TRENDS
Bryan Pearson, president and CEO of LoyaltyOne Inc., joins us next in our guest blog series. With more than two decades of experience developing meaningful customer relationships for some of the world’s leading companies, Bryan is an internationally recognized expert and author in the fields of enterprise loyalty and coalition marketing. He leverages the knowledge of 120 million customer relationships to create relevant communications and enhanced shopper experiences, and is the author of the bestselling book, “The Loyalty Leap: Turning Customer Information into Customer Intimacy" and “The Loyalty Leap for B2B.”
Bryan Pearson, president and CEO of LoyaltyOne Inc.
We caught up with Bryan to learn how the world of loyalty is evolving at a rapid pace. Here are six trends he sees occupying prominent shelf space in 2017:
Changes in programs
Plenti and other coalition loyalty programs that enable earning and redemption from multiple brands are creating a more open loyalty economy for operators and members.
Coalition loyalty, done well, can be a win-win for brands. This model makes for profitable partnerships and rich caches of data. It also creates happy consumers with more options for redemption and the ability to gain points more quickly.
That said, the U.S. can be a difficult place for coalition loyalty. That’s due to geographic challenges, fragmented markets, and highly competitive companies that are reluctant to share customer data with each other. If Plenti and programs like it can overcome those obstacles, the chance to offer consumers something different than what they’ve come to expect may very well redefine how customers think about programs.
Another new approach is fee-based loyalty programs, such as Jet.com, which was purchased recently by Walmart. With Amazon Prime gaining popularity, consumers are more open to the concept of fee-based loyalty - especially millennials.
Rewards for non-purchase behavior or activity
Social media has integrated itself into consumers’ daily lives, and word-of-mouth can be a powerful ROI driver. Encouraging consumers to earn rewards for behaviors beyond purchasing can be beneficial to a brand - not only by getting the word out, but also by strengthening the emotional connection between consumer and brand.
This opportunity goes beyond the digital realm into the physical space. “Earning and burning” points for a health-related activity is easier than ever for consumers, and it’s becoming more common. There are many reasons for this, including the fact that health-care costs continue to rise and are a concern for many companies. As employers encourage workers by rewarding them for healthy lifestyle choices, unique partnership opportunities arise for retailers.
With a focus on fitness, brands can connect to consumers in unique and memorable ways. A classic example is Westin Rewards, where members can choose to have running gear lent to them during their stay with the hotel chain.
Emerging technologies, such as AR/VR and wearables
Consumers increasingly value exclusive or unique experiences over stuff, and augmented reality provides a new way to connect with and reward best customers. Companies are leveraging these emerging technologies in unique and useful ways. For example, Lowe’s created a “Holoroom” that enables customers to use virtual reality to step into the proposed design of a kitchen or bathroom.
Wearables also provide a wealth of data for retailers and brands on consumers’ everyday lives and habits. But with great power comes great responsibility. As consumers wear devices that literally track every step, brands should not misuse the trust placed in them by people who share specific and intimate details and data. Wearables are just one of the new technologies retailers can integrate into marketing and sales plans.
The return of brick-and-mortar
While online shopping isn’t going to go away, consumers who have had an exceptionally bad experience or shoppers who are burned out on sitting in front of a screen may be returning to stores.
As BOPIS (buy online, pick up in store) gains popularity, consumers may rediscover a retailer through exceptional service or experience.
Don’t underestimate the power of a great salesperson. In a LoyaltyOne survey, an overwhelming 83 percent of consumers agreed that a salesperson who is exceptional can give a store an advantage.
Politics are personal
2016 was a divisive year for the United States, to put it lightly. Consumers will sit up and take notice when retailers take action that indicates political partisanship, as Kellogg Company found out after pulling its ads from Breitbart and Macy’s discovered by eliminating Trump merchandise. When planning to take a stand, brands need to evaluate all potential outcomes and consult with public relations experts to anticipate all consumer responses.
Much to gain, but much to lose
Consumers are inundated with communications from brands and companies, creating fatigue and frustration. Relevant communications are key. Sending irrelevant communications to a consumer is a miss at best and a burned bridge at worst. Consumers are overloaded with messages from retailers on all channels. Their attention spans and patience are shorter than ever. While emerging technologies, new types of programs, the political environment, and consumer sentiments evolve, the need for communications to remain relevant is constant and should remain top of mind for any retailer in 2017.