‘To win in omnichannel retailers must operate as loyalty companies, not businesses with a loyalty scheme’

The retail industry is under significant pressure to perform and show a return to profitability. As retailers grapple with rising costs, they’re also trying to keep up with rapidly changing consumer behaviour, technological advancements and ever-increasing competition.  

Our updated book on omnichannel looks at what retailers need to do to win the race for consumers’ attention and share of wallet today, and why they must retool their thinking and operations to serve customers equally in all channels. 

Retailers must provide the best customer experience, regardless of channel. More than ever, customers are seeking convenient, relevant and unified shopping experiences, regardless of when or where they choose to engage.  

Technology analyst Forrester suggests that today, around 60% of all sales are digitally influenced. However, the vast majority of retail spending still happens in physical stores (79% as of 2022).

As a result, retailers that want to win must integrate the physical seamlessly with the digital to deliver a flawlessly omnichannel and personalised shopping experience – that’s ‘the digital imperative’. 

In our book, we look at some leading omnichannel retailers that have successfully achieved this, including Asda, Pret a Manger, Woolworths Australia and Target, all of whom deliver deeply personalised, unified shopping experiences to their customers.  

Meaningful connections

What do all of these businesses have in common? They have created meaningful ways for their customers to connect with them using compelling and brand-relevant customer engagement and loyalty propositions.  

Asda’s digital-first ‘pounds not points’ scheme has resonated with customers who are prioritising value today in the face of increasing costs.

Pret a Manger’s coffee subscription programme, launched during the pandemic, gave subscribers a clear reason to choose Pret over any of its competitors. Due to its success, the scheme has evolved beyond the subscription into a full-blown loyalty programme, Club Pret.

Woolworths Australia relaunched its Everyday Rewards scheme in 2020 with a focus on using the scheme to personalise in-store and online customer experience in real time.  

Delivering a genuinely personalised customer experience must start with customer understanding – and customer understanding starts with customer data.

The best, most proven way to get the data is through loyalty and wider customer engagement initiatives that can be used both as a vehicle to garner insights on customer behaviour and enable the execution of personalised messages, offers, rewards and more so that businesses can reward the customer behaviour they seek and drive long-term advocacy. 

To win in omnichannel retail today, businesses must operate as loyalty companies, not companies with a loyalty programme. Loyalty must sit at the centre of a brand’s strategy and positioning – think Starbucks Rewards or Amazon Prime.   

Customer-centric guidelines

We believe that compelling customer engagement offerings today follow seven basic customer-centric guidelines:  

• Make it relevant: Customers want their experience of your business and your loyalty programme to be all about them. Personalisation is not a nice to have; it’s a have to have. 
• Make my life easier: Relevance and convenience are taking on more importance for customers; for many, these factors are more important than price. Use your real-time digital customer connection to deliver utility beyond the transaction. 
• Make it fun: Gamification, which turns something boring into something fun, can be a great way to engage customers at different points in their journey with you, can keep you front of mind and can be an innovative way to nudge customers to take actions they otherwise wouldn’t have. 
• Make me feel smart: Successful engagement programmes should make customers feel smart for participating due to the clear value exchange between the customer and the business. 
• Make it now: Retail marketing needs to do more than send me an offer for a product they think I might like; it needs to send me an offer for a product I need right now. We call this marketing in the moment. 
• Make it more than you: Look outside your network to provide customers with added value through non-competing partners to diversify the loyalty offering and increase customer stickiness. 
• Make it more than me: Customers expect businesses to be drivers of positive social change in their communities. Incorporate loyalty into your broader CSR initiatives.  

Customer loyalty programmes can help retailers and marketers grow customer connections and spend; they also create new revenue streams in retailer operations through data commercialisation, marketing commercialisation and retail media.

Ultimately, these programmes enable direct-to-consumer connections and generate valuable first-party data to inform and optimise other marketing and engagement initiatives. 

This data can and should be used to help make better and more informed customer-centric decisions across all areas of the business, including product range, merchandising, prices, promotions, personalised marketing and more.  

Such capabilities are more critical than ever in today’s challenging retail environment, and being able to execute effective loyalty and engagement strategies is a key advantage for high-performing retailers. When you embrace the digital imperative, sustainable success will follow, especially in an omnichannel world.