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Retail Loyalty Programs Key To Competitive Advantage


Tom Cole, CEO at RDA shares his thoughts on an article from Appliance Retailer - “A key take away - your mobile and web customer experiences must be tied and reward your customers for buying how they want to buy.” 

For retailers, differentiating their brand in a crowded space is not only critical but also more difficult than ever. This is because consumers have more shopping choices at their disposal, whether shopping at a specialty retailer or mass merchandiser, on from a computer or mobile device.

However, according to a worldwide Nielsen survey, a retail loyalty program can be an effective way to create competitive advantage by reducing customers’ likelihood to switch stores.

More than 74% of loyalty-program participants in Nielsen’s Global Loyalty Sentiment Survey said that loyalty programs make them more likely to continue doing business with a company while 67% agree that they shop more frequently and spend more at retailers with loyalty programs.

Interestingly, 66% said they would shop more at online retailers if these sellers provided loyalty benefits similar to those of brick-and-mortar retailers. Increasingly, loyalty programs are at the leading edge of technology as retailers incorporate advanced analytics, mobile experiences and other digital solutions to their programs.

However, while more than two-thirds of survey participants said they belonged to one or more programs there was often a large gap between the number of programs in which shoppers enrolled and the number in which they actively participate. This suggests that loyalty programs cannot be designed in a one-size-fits-all manner, according to Nielsen Global Retail Practice executive vice-president, Louise Keely.

“There are big differences in program preferences and habits across countries and across consumer groups within countries,” Keely said. These differences can include how consumers want to use technology to engage with their loyalty program and what tangible benefits they want from the program. “Retailers need to determine who they want to bring into the store or onto the website and design a loyalty program for them,” she added.

Other findings to come from the survey, which polled more than 30,000 online consumers in 63 countries including the Asia-Pacific and North America were:

-More than half of loyalty-program participants said product discounts are among the most-valued benefits

-Digital loyalty-program tools and features were particularly appealing in the Asia-Pacific region

-Flexible programs that earn awards regardless of whether a purchase is made in-store, on a website or mobile device held high appeal among 81% of respondents.


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