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BizReport : Loyalty Marketing : April 17, 2019

Expert: How loyalty programs will impact 2019

Loyalty programs have been part of retailers' marketing bags for decades, but in the digital space new options for loyalty programs appear nearly every year. There are programs that are used between brands, miles/points programs that can be redeemed for products, the list goes on. And last year, a number of big names brands - like Kohl's and Nordstrom's - revamped their programs. We asked one expert how he believes loyalty programs will impact 2019.

by Kristina Knight

Traditional loyalty programs will be revamped

"Last year, we saw several retailers revamp their existing loyalty programs, and I anticipate more will follow suit this year," said Tom Caporaso, CEO, Clarus Commerce. "For example, Kohl's Rewards recently combined Kohl's Charge, Kohl's Cash, and Yes2You Rewards into one platform, Kohl's Rewards, to make the program simpler, more convenient, and bring greater value to customers. Given the average shopper is enrolled in a handful of loyalty programs, it's critical for brands and retailers to listen for customer feedback and iterate their programs accordingly to give them the benefits and experiences they desire."

More retailers will launch premium loyalty programs

"We're also seeing an increasing number of brands and retailers adopt a paid loyalty strategy, either as an added layer to an existing points system or as a standalone program. For example, brands like Lululemon, Wayfair and CVS already offer these, where customers pay a monthly or annual fee to unlock exclusive perks like VIP express checkout, private workshops, bonus products and more. Since they target a brand or retailer's top customers, marketers are realizing a paid strategy can be a key differentiator for driving long-term loyalty," said Caporaso.

Personalization will become even more  critical

"As more brands and retailers revamp their loyalty programs, it's essential for them to analyze customer behavior and purchasing data to understand how to personalize the program and individual offerings for each customer. This data can be used to create custom homepages, suggest merchandise pairings and offer experiences that closely fit the shopper's interests and needs. When customers feel their preferences are recognized in their loyalty program, it helps build a deeper, more meaningful connection to the brand and builds consumer trust over time," said Caporaso.

Smart technology will help power more loyalty experiences

"As brands and retailers continue to use technology to improve their brick-and-mortar experiences, they're also starting to view it as a player in their larger strategies as well. For example, Nike holds the gold standard of this with its NYC store," said Caporaso. "The flagship engages consumers by offering advanced digital capabilities, such as the Nike App to help them discover, learn and find the products they want with ease and speed, and a Sneaker Lab where they can customize shoes and view fittings in-store. These technology offerings, coupled with white-glove service, fresh in-store design and NikePlus member-only experiences, help the brand create emotional experiences that attract customers and keep them engaged over time."

Tags: advertising, Clarus Commerce, ecommerce, loyalty marketing, loyalty marketing trends, loyalty programs, retail marketing

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