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Retail trend: A growing interest in data-driven loyalty programs

More retailers are connecting their loyalty programs across all shopper touchpoints.

4 min read

Marketing Strategy



For brands and retailers, a loyalty program is an effective way of capturing customer behaviors, preferences and motivations. But only when that data is connected across all touchpoints, banners and channels can it provide the insights necessary to influence shopper behaviors, drive conversion rates and deliver lasting value to the customer.

Across the Canadian retail sector, more and more household brands have recognized the powerful role loyalty programs play in the fight for share of wallet, share of mind and even a tile on mobile devices. This partially explains a recent trend across the industry, as major retailers continue to announce they are consolidating their loyalty programs or expanding them to include multiple banners — all with the goal of offering a better customer loyalty experience. We saw Loblaw merge the PC Plus and Shoppers Optimum programs into the larger PC Optimum loyalty program (perhaps the most recognizable example in Canada) and now Canadian Tire has become the latest retailer to expand its program and give customers more opportunities to earn and redeem rewards across a variety of banners.

From the customer point of view, this means a good thing just got better: When more banners are added, loyal, long-time members who benefit from the program today will receive even greater value as more redemption options become available. For Canadian Tire, evolving their loyalty strategy means an opportunity to create a single customer view, provided the retailer connects its data effectively across the new program, banners and engagement channels.

Benefits of a single customer view

Retailers engage with their customers in countless ways: email, SMS messages, loyalty mobile apps, on social media — the list goes on. And although each channel produces a significant amount of customer data, brands need access to all that data in one centralized platform to create an effective loyalty strategy. When data is connected in one single customer view, retailers can present rewards, offers and communications tailored to each shopper’s purchasing habits and preferences in the right channel at the right time. This in turn leads to new and higher levels of engagement, an enhanced shopper experience that meets customer expectations and, ultimately, higher conversion rates due to the accuracy of the offers distributed.

Consumer expectations of data-driven loyalty

With the consolidation or expansion of a loyalty program comes a more efficient, streamlined process for loyalty members. Multiple loyalty cards are replaced by one universal card, several branded apps are unified in one mobile experience, and points can be accrued for purchases under one banner and redeemed for products in another.

While ease of use and convenience top the list of why consumers engage in a brand’s loyalty program, shoppers are also savvy about the benefits they will enjoy when retailers use personal data to understand their preferences. Consumers understand that the more personal information they share, the better and more relevant offers they will receive. According to Eagle Eye’s recent Shifting Loyalties report, if Canadian consumers disclose additional information about themselves, they expect in return: personalized communications (45%) and rewards (35%), improved omnichannel customer service (25%) and communication in the channels they prefer (25%). And if consumers engage with different brands under the same loyalty program umbrella, there is a certain expectation the retailer will capture their preferences and leverage that data in the future.

Rejuvenation, relevance and revived redemptions

Meeting consumers’ expectations in these ways is a virtuous cycle — not only does the retailer create a personalized shopper experience, it ensures an ongoing pipeline of data to nurture deeper customer relationships and stronger brand loyalty. For retailers like Loblaw and Canadian Tire, a data-driven strategy fueled by a single customer view will rejuvenate their loyalty programs and create ongoing opportunities for customer engagement, increase their relevancy by tailoring offers and rewards to each customer and improve redemption rates by building a more engaging loyalty and rewards scheme.

In today’s competitive retail marketplace, simply offering a loyalty program is no longer enough — and major retailers like Loblaw and Canadian Tire have already recognized the positive impact loyalty marketing can have on their bottom line. This year, we anticipate a spike in the number of retailers following in Loblaw and Canadian Tire’s footsteps — employing a data-driven, personalized approach to loyalty and customer engagement.

Tim Mason is the CEO of Eagle Eye. During his tenure as CEO, Eagle Eye has since expanded into the Canadian market with progressive technology that will transform retailers’ digital customer marketing strategies.