Retail Loyalty And The Opportunity Of Mobile

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. As mobile devices (it's probably time to stop calling them phones) proliferate and become ubiquitous, they will continue to gain functionality. In short order, they will take the place of our wallets, and possibly even our keychains.

Here comes the hard part: not jumping in with both feet until a complete strategy is in place. While the temptation to "just get in the game" with mobile is a strong one, keep in mind that for all its promise, mobile marketing is still very much in its infancy. Creating an app or delivering a coupon is a quick response, but adds little long-term value for the retailer or the shopper.

To be successful, any mobile effort must integrate with other tactics and media channels. The goal should always be to use mobile as the connection point for the shopper that ties all the various media elements together and ultimately leads to a sale. Put another way, a successful mobile strategy will have the shopper at its center, not the device.

3 comments about "Retail Loyalty And The Opportunity Of Mobile ".
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  1. Travis Priest from Sundrop Mobile, Inc, June 27, 2011 at 5:05 p.m.

    There's a lot of truth here. Traditional loyalty programs have been driven by data analysis paralysis: you have the data to generate all these great insights, but no ability to make use of it and actually communicate with customers.

    We've taken a simpler approach for hospitality loyalty in that we don't care what's in the ticket (what entree did the customer buy or was there alcohol or desert on the ticket), but simply the fact the customer was there and how much they purchased. Then we focus on communications - engage with the customer in relevant, permission-based marketing.

    Mobile adds an exciting dimension to loyalty, and I hope we don't repeat past mistakes. While "checking in" is cool, it'll be years -- and perhaps never -- that checking in is mainstream. Modern, mobile loyalty programs need to be considerate of being inclusive, too.

  2. Ernest Ramos from JMango, June 28, 2011 at 2:17 a.m.

    Mobile is a really good platform to base loyalty campaigns on. Mobile devices are with its users all the time, and it provides retailers and marketers a unique opportunity to connect with their clients and call them to action.

    I agree with the premise of the article, in order to succeed in a mobile marketing venture, you always have to bear in mind that the consumer has to be in the center of things. Every service or feature to the service added should make it easier for the consumer to transact business with you. Do that and your mobile campaign will go a long way.

  3. Justin Royer, June 30, 2011 at 10:04 a.m.

    Couldn't agree more with Travis. Historically, loyalty programs have been all about economic evaluation of customers. And while this is obviously a critical piece, it leaves much to be desired in terms of holistically defining and measuring the worth of a customer.

    Social media data, often supported by mobile devices, finally allows us loyalty wonks to measure engagement, influence and advocacy. And advocacy brings more customers into the funnel instead of just trying to squeeze the most out of the bottom.

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