Do loyalty and loyalty programmes really go hand-in-hand in retail today? Customer loyalty is a proven way to sustain growth and retain customers for long periods, which is why most retailers started designing and structuring specific schemes and programmes based on data and algorithms. According to a KPMG report, about 85% of growth in most mature brands comes from their loyal customers.
However, for the last few years there have been narratives of loyalty waning, especially in the Middle East due to the rise in e-commerce, increased competition for retailers and options for brands, a very fickle millennial population that have a fear of commitment, and lastly but most importantly, with retailers not quite getting loyalty programmes right.
This was put to test last year where consumer purchasing powers were drastically reduced, essential commodities dominated most buying decisions, and there was a general sentiment of uncertainty and ambiguity looming. Only brands and retailers that had managed to build a strong loyal relationship with their customers managed to retain them, but strangely, there was no real correlation between the loyal customers and loyalty programmes.
Another KPMG report revealed that one in seven UAE consumers refuse to sign up for retail loyalty programmes because they don’t want their data to be tracked. What’s worse? Many of the people who have signed up for loyalty programmes don’t quite understand what these schemes entail. According to a study by Edgell Knowledge Network, 81% of loyalty program members don’t even understand what their rewards entitlements consist of or how they’re paid out.
What this means is that there is a fundamental gap in communication and relationship building that brands and retailers need to fix. Data has become the crux and core of business decisions but if the data isn’t used optimally and at the right time, then it’s just a set of numbers and figures that are virtually useless. And if people are struggling to fix the problem on their own, then looks like they could use a hand from a friendly neighbourhood robot.
Presently, you go into a store, decide what you’re buying, go to the cashier for payment and then if you are a member of the retailer’s loyalty programme, you are asked for the loyalty card –at the very end of the transaction.
Many retailers have got the order wrong, or that’s what the chief operating officer of Jacky’s Group of Companies, Ashish Panjabi seems to think.
In an ideal world, loyalty programmes combined with data should help increase the conversion rate exponentially. However, if data is only gathered once a customer walks into the store and the option for redeeming loyalty points comes at the end of the shopping process, this could be a lost opportunity for businesses.
This is when robotics and automation come into the picture. “It (a robot) has a camera, it can monitor you when you walk into the store, give a personalized greeting, and make a personalized recommendation because it knows your previous purchase habits. Part of the stores’ loyalty program is that is seeps into the CRM system in order to tell you the special offers that are there. It will also alert the store staff about the customer’s arrival,” said Ashish Panjabi.
Robots can then start using the information derived from the customers as they enter the store to make informed recommendations thus leveraging data most optimally right from the beginning of a customer’s shopping journey.
“A robot today can give you the information about who has interacted with it, without them saying anything. The camera technology can estimate if they are male or female, what’s their age, what questions they are asking,” he added.
The pandemic too played a role in emphasizing the importance of robots in stores as social distancing measures wouldn’t allow many store associates to be present in a shop. Robots could behave like efficient store staff and help the customers making them feel more comfortable and at ease given the current circumstances.
“In terms of robotics, if it’s not facial recognition, then it can be robots scanning the loyalty card. For example, in aviation, if you’re a gold card member, you get bumped up to the top of the queue. We see this with DEWA too. Its chat robot – Ramas – is its assistant on the call center, the app, and their website. So, it’s the same Ramas that’s working everywhere, and it’s integrated with all of the different systems that you want, giving you a unified experience,” he explained.
A unified experience across all channels, be it in-store, on the website, on social media as well as in personal interactions is key for consumers to be able to relate and associate themselves to a brand. In 2020 many retailers started thinking like consumers and not just as businesspersons to empathize more with their audiences. Once more retailers do that, customers too will be at ease in sharing their data, trusting retailers, and understanding and utilising the programmes set up by the retailers.
“The objections that most customers have had about giving and sharing data has started to disappear as well. Because they are your online customers as well as in the store,” he noted.
Moreover, customers are looking for more personalized offerings and don’t want to be spammed with generic advertising and marketing that seldom suit their desires. Data derived by the robots by having individual interactions with customers in-store and online and its ability to convert the data into actionable measures almost instantaneously will make that experience and journey that much more seamless.
“We’re getting into a stage of personalization. But we also don’t want to be a victim of the algorithm. You can go down that slippery slope and say an algorithm figures out everything. But then you are actually limiting yourself. This is something we recognize as retailers; you have to have some spontaneity. You need to have something outside the usual flow. You never know who’s going to buy what and who they are buying it for,” he said.
So retailers now need to focus on creating unified omnichannel loyalty programmes that are personalized and offer adaptive rewards, drive deeper engagement through emotional loyalty and most importantly, are comprehensible.
“It’s about having the right suite of providers who can provide a solution, to fix a bigger problem. 2020 was the year where problems were coming to the fore and retailers were identifying them. 2021 is where a lot of retailers are saying how do we figure it out?” he concluded.
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