Retailers know that loyal shoppers are the key to profitability. After all, repeat customers spend significantly more than first-time buyers. When it comes to nurturing these loyal relationships, an effective loyalty program can make all the difference. However, the landscape around loyalty is crowded, and U.S. consumers are members of over 17 loyalty programs on average. The kicker: they only actively participate in half.
That said, what makes for a successful loyalty program is its ability to move the shopper from the home to the store. In-store shopping offers crucial benefits for retailers, such as presenting upselling opportunities for store associates or catering to the shoppers who prefer not to navigate a confusing and crowded online landscape.
The question becomes; how can retailers encourage shoppers to go to stores? Enter loyalty programs, which enable retailers to connect with consumers early, amplify retailers’ understanding of their customers and send proactive, personal offers.
Let’s walk through this process with a hypothetical customer, Becky.
Step one: understanding the customer
Successful loyalty programs reveal valuable data that offer insights into consumer behavior – and the reasons behind it – proving beneficial to both the shopper and the retailer.
The shopper wants great experiences, and the retailer wants to power the experiences, which they need data to do. But they can also use data to impact their overall business strategy, such as by understanding changes to consumer demand or store-level inventory needs.
Let’s consider our hypothetical shopper Becky, who makes an occasional purchase at her local supermarket, but doesn’t go in often. Her supermarket can leverage AI to analyze her purchase behaviors. AI can draw the conclusion that whenever Becky does visit the store, she typically buys frozen fruit along with protein powder. Identifying the pattern, we can assume that Becky likes to make smoothies at home.
Step two: identifying the best offers for each customer
After identifying patterns that help retailers understand their customers, the retailer – powered by AI – can then help determine the best, specific offers to incentivize a shopper to take action and visit the store.
Let’s consider Becky. Now that we know she likes making smoothies, the retailer can leverage AI to identify tailored offers that cater to her habits. For example, offering half off fresh greens alongside her regular purchase of frozen fruit.
Step three: sending proactive, personal offers at scale that constantly evolve
Based on the data gleaned, the supermarket then can automatically send personalized offers at scale.
When Becky receives a promotion for half off greens along with her purchase of frozen fruit, she gets excited to ramp up her usually monotonous smoothie routine. She visits the store, redeems the offer, enjoys a leveled-up smoothie and increases revenue for the retailer. It’s a win-win, and her relationship with her local supermarket is strengthened because she feels seen and appreciated.
Not only is this a win for Becky and the supermarket, it’s a win for other consumers as well. AI allows these types of personalized, unique offers to be delivered at scale across the entire loyal customer base.
A great loyalty program is what is takes to stand out
A great loyalty program won’t just generate a repeat purchase; it’ll foster valuable long-term relationships with customers – relationships that could domino through word of mouth and help a retailer cast an even wider net. In today’s volatile landscape, those relationships will ensure the retailer stays ahead of competitors.
To learn more about how GK can help you strengthen your loyalty program and offer customers tailored, personal promotions, contact us today.
