Your Shoppers’ Data can Create Memorable Experiences Every Time

Your Shoppers’ Data can Create Memorable Experiences Every Time

While traditional shopping becomes more obsolete and premium, in the wake of rapid digital transformation, the future of omnichannel retail is data-driven and personalized. Customers expect nothing short of the most striking and meaningful moments of truth that enable them to engage better with brands across multi-channel touchpoints. Advanced customer analytics enabled by superior marketing intelligence platforms in combination with tech stacks that are backed by a singular source of truth are in high demand. Let’s not forget that loyalty programs can further customize communication as per unique customer needs and preferences. 

For maximum long-term retention through timely gratification, they need to be designed and factored into the overall digital marketing ecosystem carefully. Revolutionizing customer experience in the here-and-now, the following key data-driven trends are being adopted and redefined by leading brands powering efficient customer profiling, targeting, and segmenting practices. 

1. Personalization at Scale

Global superstores and e-commerce giants like Amazon and Walmart are frontrunners when it comes to shaping better personalization practices. Amazon, in particular, has been investing heavily in its customer analytics to ensure higher levels of both sophistication and transparency. The company expanded its personalization program to ensure that customers’ products viewed can be bundled with products added to the cart so that they can make the best choices right before the purchase is made. Display items that are viewed are further recommended through additional products in the follow-up emails that confirm the transaction.

In addition to raising the bar with better personalization at scale, Amazon is also innovating heavily to offer relevant recommendations to their customers. With more nuanced and granular level offerings like the personal shopping service, for instance, the Prime service was extended to include this value-added benefit. Customers now take multiple surveys to complete their styles and fit preferences and then get customized recommendations from a specially hired team of stylists. These are curated from across half a million brand offerings available through efficient inventory mapping in combination with customer data analytics. Smaller businesses that came online during the pandemic are also moving in this direction drawing inspiration from larger players. Personalization at scale has many benefits from a data analytics standpoint. From a business growth and ROI perspective, they enhance sales insights to optimize marketing efforts around driving the conversion rate and, overall, inform better decision-making in the future as well.

Amazon’s scalable personalization benefits

Overall, some of the larger factors responsible for personalization success include:

Data Foundation: This includes developing a solid audience analytics framework to have a multidimensional view of the customer. It would also include segmenting customers and targeting them effectively based on customized recommendations.

Decisioning: As a crucial step in this regard, decisioning includes creating a library of campaigns and content that can better inform future strategies. Developing a multichannel decision engine can, moreover, avoid conflicting messages and drive maximum value per touchpoint.

Design & Distribution: Banking on cross-functional teams that can test and learn together, design and collateral distribution is the final and most crucial step in terms of optimizing each personalization campaign.

2. Removing Data Silos for Integration & Omnichannel Communication

Whether Banking, Retail, or Finance, all sectors are now looking at avoiding a compartmentalized approach to data management in the pursuit of integration. Many organizations have been struggling with this process issue for a while now. Streamlining all marketing activities surrounding the data collection, ingestion and personalization imply consolidation towards a single source of truth. Moreover, revenue insights, customer experience strategy, and predictive analysis also need to be integrated into the final process that defines better managerial decision-making. Considering new advancements in digital transformation, leading brands have already taken the necessary steps to avoid any kind of data silos too, then, deliver omnichannel value to customers. This step can offer a large strategic advantage to companies ready to innovate with the right talent on board. Let’s look at Sephora for instance. 

Sephora’s integrated data management drives omnichannel experiences

The beauty-products retail giant has multiple digital and physical channels that came together to avoid silos in favor of ‘phygital’ experiences. The company innovated to gather and analyze customer preferences from across their varied services to figure out unique new makeovers and fashion consultation-based experiences. Delivering genuine omnichannel value also meant using ‘in-store’ methods to attract customers through an integrated digital app interface that was installed live. Thus, both on ecommerce product windows as well as in the store itself, customers can virtually try out every product before they buy. With the covid protocols in demand, not actually trying makeup in favor of digital tryouts is a huge uptick for brand trust and reliability as well. 

Moreover, all customer communications are streamlined effectively to earn and burn loyalty points. The company ensures that marketing collaterals across devices can provide both the customers and the sales team with adequate resources to make the best optimization decisions. In this way, customers become part of Sephora’s data management ecosystem with profiling done based on both online browsing and purchasing patterns as well as in-store purchases. Sales associates then take the call on incentivizing products through a multi-tiered loyalty program that is much loved across key geographies. The results of synchronizing all of Sephora’s data management efforts towards the end goal of personalization have been nothing short of phenomenal. The loyalty program now has around 25 million members. In 2018, members accounted for 80 percent of Sephora’s total transactions. And for the third year in a row, with a score of 79 out of a possible 100, Sephora has claimed the top slot in Sailthru’s Retail Personalization Index.

3. Investing in Tools for Superior Data Management

The most important step in using customer data to drive unique experiences is deploying the right tech stack flexibly with the right platform. Tools and technology enablement can be driven effectively by bringing the right digital transformation partner on board. There are a whole set of criteria that can help companies determine their choice of partner – from effective personalization and campaign management to loyalty program scalability and deployment. There are several players competing for these services today with prominent names including Oracle, Adobe, Salesforce, and Acquia. Each offers a unique set of tools to optimize customer analytics to deliver higher sales and ROI.

In a world dominated by customer data and personalization trends, loyalty is a crucial pivot towards delivering maximum satisfaction. Whether for optimum instant rewards or long-term value drivers, get in touch with our experts at Capillary Technologies to enable the best-in-class loyalty programs suited to e-commerce transitions both new and old. Ultimately, customer data is only the foundation, but the decision-making will determine the success of organizations bold enough to transform their processes in favor of omnichannel customer experiences redefining the here and now.

Malaysia’s Data-Powered Loyalty Market is Growing Stronger: A Strategic CRM Deep Dive

Malaysia’s Data-Powered Loyalty Market is Growing Stronger: A Strategic CRM Deep Dive

Data has become the biggest asset for marketing giants today who are innovating heavily through the new normal. The shift to data-centricity, in terms of customer retention, has meant introducing advanced analytical loyalty solutions across the world’s largest markets. It entails doubling down on targeting precision and personalization efficiency like never before. In Southeast Asia, the Malaysian loyalty market has been growing consistently and exponentially over the past 5 years at a CAGR of over 12.5%. The expected value of the market is stipulated at $534 Mn in 2022 and is expected to compound to $848 Mn by 2026. As a result, leading brands across sectors are adapting niche data-driven loyalty practices to boost growth significantly. 

Sustainable relationships with Malaysian customers will very much depend on the data-backed CRM flexibility with which these brands power their loyalty programs in the coming years, too. Retail, Fintech and Food are the three largest industries that are seeing a huge uptick in sales on the back of data-driven loyalty solutions. However, what’s proving a crucial advantage and differentiator between them, at once, is the kind of data management programs that lie at the heart of customer loyalty. Business leaders across the board are unanimously agreeing to the benefits of these programs even for financial services that are late to join the bandwagon. It all goes to show that the current demand and popularity of multi-tier point-based loyalty cards and apps is at an all-time high. 

1. Car Loyalty Integrating Data-Powered Service Benefits

On the other end of the spectrum, the Malaysian automobile sector is seeing a swing in terms of customers benefiting from exclusive rewards out of efficient data-mining practices. For instance, in April 2021, Hyundai-Sime Darby Motors announced that the firm had launched two after-sales loyalty programs in Malaysia. The two service loyalty programs include the i-Care Plus and a Loyalty Card, which offers freebies and discounts to Hyundai customers whose data is readily collected across all online and offline communication and sales touchpoints. 

Notably, the i-Care Plus program is only available for vehicles that are four years or older. Customers can sign up for the program at any authorized center across the country for just RM20. The loyalty program provides a 10% discount on selected parts, a 5% discount on labor charges, and two free engine oil bottles and an oil filter. This is an entirely personalized discounting solution that is based on identifying cohorts of customers who would exclusively benefit from these customized discounts. These cohorts are then targeted through high-tech marketing intelligence platforms that ensure feedback and new customer insights into planning and implementing the next set of rewards and discounts.

The exclusivity principle drives the data-backed solution to become more robust over the long term as the refining of need and behavior-based insights continue.

Hyundai-Malaysian-Loyalty-Market

It is clear that the role of customer data is integral to the machinery of service loyalty for Hyundai which thrives on the back of its efficient tech stacks that refine and segment the customer data on a real-time basis. The Loyalty Card program offered by Hyundai comes with the ownership of any Hyundai model. The exclusive benefits offered under the program include a 20% discount on KLIMA Fresh and BlueChem products if bought during the particular month in which the promotions are run. Notably, customers are expected to receive more benefits in the future, including discounts on merchandise and higher trade-in value when the customer purchases another Hyundai vehicle.

2. Retaining Overlooked Customers with Data-Backed Omnichannel Campaigns

Alcohol and spirits distributor, Drinkies Malaysia, retained their customers with  “Bottoms Up! Forecasting Demand with Party Moments” campaign. The brand wanted to tap into those customers who they knew little about. To gain the highest top-of-mind, Drinkies wanted to take it to the next level by understanding deep data patterns, enriching performance, and generating higher demand so it can engage with these neglected consumers better. Drinkies brought the 3.5 million drinkers of alcohol in Malaysia a better online experience using a comprehensive CRM solution that uses data and enriched consumer profiles to market Drinkies products and services in a more effective way. Drinkies used DotDigital, an omnichannel marketing automation platform, that connects seamlessly to the Magento shop backend and allows for enriched data extraction, creating smart segments.

Drinkies-Malaysian-Loyalty-Market

3. Data-Driven SaaS Partnerships On the Rise

AI-powered loyalty programs are expected to boost the growth of loyalty program providers from the short to medium-term perspective in Malaysia. One major trend is, therefore, the collaboration between companies and leading tech partners to offer a single source of truth when it comes to collecting and utilizing customer data. The collaboration is founded upon the principle of allowing for much more flexibility while personalizing offers, promotions, rewards and discounts. By grouping together multiple rewards, moreover, new tech stacks work wonders to ensure that customers are given the full convenience and choice benefits that they need while purchasing products from one buyer and availing of benefits from the other. 

Bonus-link-malaysian-loyalty

Let’s take a closer look at how it all works. In June 2021, BonusLink, the multiparty loyalty card program provider, replaced its traditional marketing tools with intelligent customer analytics in order to create a single solution to interpreting customer data. This enables BonusLink to offer enhanced and personalized experiences to its loyal members while encouraging repeat purchases. This involves creating customer segments and refining that data flowing in from multiple platforms and marketing/sales channels through a single point of view. Beyond this point, the varied applications of AI-powered cognitive analytics ensure that the adtech and martech platforms that implement the communications around the program are equipped to customize the messaging according to unique customer needs and behavioral trends.

The Way Forward for Data-Driven Loyalty

All other sectors are also experiencing advancements of data-driven loyalty marketing in Malaysia. A leading provider of 4G LTE plans, YES, for instance, surprised competitors in the telecom sectors through its advanced data-backed loyalty solutions for customers based on their specific usage of mobile data packs over time. Taylor’s University used their student data records to effectively boost visibility by tailoring a rewards program to suit the specific needs of business students who had entrepreneurship dreams. Moreover, Carrefour launched integrated loyalty through a multi-point system designed heavily on the basis of customer mapping and in-depth purchase data analysis. Going forward, Malaysian loyalty is, thus, a unique space to watch out for when it comes to the most elaborate as well as nuanced data-driven programs that are redefining CRM strategies for the brands in the here and now.

Unleashing the Great Indian Forecourt Experience in Fuel Retail

Unleashing the Great Indian Forecourt Experience in Fuel Retail

One of the largest segments of the Indian retail industry, the petro-retail sector is known to be the most well-organized due to the constant upgradation of its forecourts. Now, due to the massive logistics overhaul of Indian supply chains during the pandemic, there’s been a huge upsurge in demand for digitized forecourt services for both fuel and non-fuel retail offerings. Catering to emerging consumer preferences, the overarching objective of refurbishing the traditional forecourt experience is to not only smoothen mobility for last-mile delivery – accelerated by the pandemic’s e-commerce boom – but to reduce the customer churn for increased profitability. Digital payment being central, the forecourt user experience has transitioned to being omnichannel to offer multiple benefits at once. Below are the key here-and-now trends underpinned by the largest Indian fuel retailers.

1. Ancillary Offerings for Maximum Value 

Traditional fuel retail services have been on the decline with a significant dip during the pandemic. Hence, it was important for large players to offer value-added non-fuel services. In addition to ATMs and convenience stores at the forecourt, there’s also been an introduction of car wash facilities, eateries and fast food joints. Due to the multiplicity of new services offered, the forecourt is now a center of increased activity beyond the archetypal motor station. The need to enable digital transactions and personalized rewards, then, changed the forecourt experience to being omnichannel entirely. Purchase decisions are aided by communication that flows from one content source to the other across the major digital channels of engagement. 

2. Data and Tech Integrations Promoting Non-Fuel Products

Indian-Fuel-Forecourt-Expereince-1

The future of Indian fuel retailing is marked by rampant innovation. To speed up the time-to-market, most small and medium businesses rely on forecourt services that are becoming more sophisticated by the day. From a consumer perspective, non-fuel offerings gained impetus for higher convenience. Stores at the forecourt that offer multiple products through prior browsing enabled by a digital interface (an app) are observing higher sales daily. This is due to the digital transformation brought about by the integration of tech stacks backed by a single source of truth in all customer interactions. 

3. Integrated Digital Payments for All

The larger flexibility of paying online has made the forecourt experience entirely cashless and contactless in favor of ease in the new normal. Customers can now pay via any of the UPI apps in addition to opting for card swipes. The seamless transactions facilitated by the flexibility of payment modes ensure that customers can fasten their purchase and get receipts sent directly to their numbers. Digital payments also account for a more transparent data collection that is integral to retargeting customers with timely marketing communications after the purchase is complete. Leading OMCs in India have all integrated digital payments in a cash-rich sector.

4. Personalized Rewards & Recognition

On the back of forecourts, the Indian fuel retail sector, which is expected to grow three times in size over the next three years, has adapted to a curated, customized and smart fulfillment that no one could have expected prior to COVID-19. To optimize digital interactions, data analytics and insights get automated through persona mapping to ensure a satisfying experience for all – whether fuel or non-fuel – services at the forecourt. Due to the efficient customer data collection at the source with e-payments  – personalized rewards can be activated for different interest-based cohorts to encourage more visits and improve retention over time. Multi-tier point-based incentives that encourage greater earn and burn prove particularly useful as fuel preferences usually stay the same. 

5. Instant Motor Insurance

In addition to activating loyalty programs, fuel retailers are also opting for insurance enablement. This is a service that has huge pent-up demand in India as it is a hassle to get it done manually. Traditionally, if a vehicle’s insurance expires, the customer has to visit the service center to renew it. Now with digital insurance, it can be activated in only a few steps at the forecourts that provide this service. This allows for a quick and easy solution. 

6. Improving Customer-Centricity with Blockchain and AI 

Indian-Fuel-Forecourt-Expereince

Due to the preference for digital payments, blockchain and AI are able to create tailor-made solutions that address specific consumer needs. For instance, predictive analytics can determine the best fuel option for a particular customer based on analyzing his vehicle and budget at a forecourt that offers multiple fuels. For the retailer, this is particularly useful to anticipate upcoming demand surges based on fuel preferences tracked in turn. Such an ecosystem facilitates a seamless experience for both parties. You can read more about the changes blockchain technology is bringing to the loyalty stratosphere here

It has been speculated that in the near future, the final frontier of fuel retail innovation would drive to the forecourt to the consumer’s doorstep using advanced technologies. Some of these services would include quick vehicle pick-ups and drops, e-commerce enablement and instant insurance renewal. The great Indian forecourt experience is, thus, one in the making. But one thing is for certain – the transformation is focused on analytics, automation and personalization. These three pillars will determine the growth of the biggest fuel retailers the country banks on. The faster the technology adoption and implementation, the better the financial results. Partnering with the right reward enablers is a must-have in the larger strategy to ensure that customers remain engaged in the long haul. Get in touch with our experts at Capillary to know how fuel retail loyalty programs can enhance the value of digital transformation for your forecourt.

Winning Over CPG Consumers with Influencer Marketing

Winning Over CPG Consumers with Influencer Marketing

Present day influencer marketing has surpassed all expectations from an ROI point of view. It has become a vital part of the digital marketing strategy that only promises to grow further. Whether food, beverage, healthcare or cosmetics, brands across each of these key categories are winning over consumers with relevant social media content. 89% of marketers believe that influencers can help them achieve their targets with shoppers showing increasing affinity towards local creators across key platforms and highly engaging content formats. 

While high reach, credibility and engagement are key criteria for considering experts and content creators, affiliate marketing has opened up more avenues for local, on-ground brand advocates to drive consideration and purchase. The first step of a successful influencer marketing plan is to define the brand objectives. Next, imaginative content creation in close coordination with the influencer who best understands her audience interests can follow. Once the creative assets are made, special coupon codes and vouchers can be customized for followers to avail while buying the product online. These codes can be tracked to measure the effectiveness of the campaign from a conversion standpoint. Another key pillar driving influence for brands is through the prospect of onboarding affiliates. These are basically those who can activate the product directly or indirectly amongst consumers. Affiliates need not be celebrities or high-follower creators/influencers. They can quite simply be those who can sell the product within individual circles of influence to their clients. Let’s look at some ways in which key categories of CPG brands (FMCG, Healthcare and Manufacturing) drove results through both influencer and affiliate marketing programs.

1. FMCG

colgate-influencer-marketing

Influencers can do a job no other marketing touchpoint can deliver,” says Barbara Mugica, Associate Director for Personal Care Digital Marketing at Colgate-Palmolive. The brand took a data-driven approach to planning a year-on-year global creator-led strategy with significant investments for key markets wherein they wanted to increase penetration. They relied on in-depth influencer analytics to chart out their initiatives with the unified goal of driving more awareness for a brand new line of sustainable dental care products. The Optic White toothpaste and bamboo toothbrushes in particular. Through a metric-based approach that factors in the results in terms of projected views, engagement and conversions that the chosen influencers can drive – the brand successfully delivered the global initiative across markets through effective contextualisation. As a result, youth influencers for the most watched YouTube categories from around the world increased the credibility of the Colgate products among their own audiences, driving high levels of brand affinity.

An example of one such association part of the larger global strategy was Colgate Optic White promotions by Andrea and Blair through The Smile Show. This video series featured the product and amassed 24M+ views. With relevant and useful content, the YT creators were able to engage their audiences best by connecting on the universal matter of a great smile. The duo successfully built both online and offline impact by significantly increasing consideration and purchase.

Similarly, in India, a whole range of diverse creators from popular entertainment genres such as comedy and films came together to ask Colgate consumers to ‘Smile Out Loud’.

Colgate India’s ‘Smile Out Loud’ campaign features young and inspiring social media influencers in their most authentic avatars. Despite being made to feel self-conscious at a young age due to conventional beauty standards, influencers Toshada Uma, Dolly Singh, and Prarthana Jagan found a way to defy these norms and create a unique identity for themselves. The creatively crafted video assets showcase how they braved the social stigma surrounding their ‘imperfections’ but didn’t let their smiles wane. Instead, they converted their Colgate ‘Visible White’ smiles into personal strengths by embracing them without hesitation.

2. Manufacturing

paint-brand-influencer-marketing

In an exercise contrasting the content-based influencer advocacy on social media, a leading Norwegian client of Capillary Technologies specializing in decorative paints activated a first-of-its-kind affiliate loyalty program. A unique app onboarded both painters and dealers in a multi-country initiative wherein painters were allowed the opportunity to earn and burn points if they chose to deal with this paint brand over others. By increasing engagement through vernacular videos within the app, moreover, 500+ painters were trained to make the best use of it across 7 key markets. It overall increased the brand’s market share in key countries wherein maximum trust and transparency was established successfully between the painters and the dealers.

As the first step, only painters who could influence the decision of the many households/builders seeking painting services were onboarded through extensive research and interviewing. The brand believed in their potential to influence others as they were the best organic affiliates whose word about the product’s authenticity proved invaluable. Next, the painters were directed to dealers who provided them with the product with a special QR code activated to ensure that the painter could earn points. Next, painters were directed to redeem the points earned creating a sustainable cycle of retention and repeat purchase. Configurable rewards and gamification ensured high engagement while the in-app videos in vernacular languages allowed for the painters’ seamless understanding of the reward system. The rewards catalog, moreover, was customized and curated by the brand to make sure that the loyalty program led to the creation of an influencer ecosystem for long-term results instead of achieving mere short-term targets.

In terms of impact, the program led to 300+ training sessions with over 50K influencers from across 7 countries with over 75% incremental sales generated as a result. The deep knowledge gained on painter sentiments as well as the relationships established with these painters led to increased upsell opportunities in the future through targeted communication. Both individual painter preferences and purchase patterns played a crucial role in terms of contributing to the success of the program.

3. Healthcare

johnson-johnson-influencer-marketing

While earlier leading healthcare brands like J&J relied on celebrities like Jennifer Garner and Kerry Washinton to drive awareness primarily among boomers and millennials, they have now turned towards activating their GenZ shoppers through younger digital influencers. Not only is J&J conscious of the need to communicate with younger audiences by leveraging the power of social media, but also aware of the growing consumption of healthcare products among them. In fact, during the pandemic, the GenZ cohorts’ consumption of nutrition and skincare products grew tenfold. Thus, J&J tactfully collaborated with leading fitness, health, and even food bloggers across to increase awareness around its new range of products in underpenetrated markets. The strategic choice was to partner with younger faces to increase the relevance of the communication of fairly clinical brands such as Pepcid antacid which was promoted tactically through chef influencers who claimed to avoid heartburn while enjoying their favorite Asian meals. Such an influencer marketing strategy proves effective since it makes contemporary products that have only been sold through traditional channels before. The digital reach and engagement garnered by young influencers with the most loyal followers ensures that the age-old influence of established healthcare products is sustained for the next generation of customers. 

Similarly, Neutrogena’s skincare label brought onboard 24-year-old Lauren Bushnell and 19-year-old Jenna Ortega to promote their new range of sunscreen. The brand also actively collaborates with GenZ musicians like Chloe and Halle Bailey as well. The diversification of influencer categories beyond – fitness and healthcare expertise –  is an effective step for healthcare brands to make their products more appealing to GenZ audiences.

It is, thus, evident from the varied types of influencer and affiliate activities that CPG brands are winning over consumers with relevant campaigns activated on a real-time basis. The fact that consumers trust influencers more than the brands themselves is a sign that this form of advocacy is perhaps the most effective within the larger digital marketing ecosystem.

5 Emerging Insights from Dubai’s Conglomerate Loyalty Landscape

5 Emerging Insights from Dubai’s Conglomerate Loyalty Landscape

As the world’s center of retail growth and innovation, Dubai’s conglomerate loyalty landscape is developing in a robust manner across sectors. Rethinking the post-pandemic customer experience altogether – large corporations with multiple brands are luxuriantly rewarding existing customers to, ultimately, include them within the conglomerates’ ecosystem. By highlighting real value for customers over mere discounts, conglomerate loyalty programs in the MENA region, at large, are crafted to meet the changing customer expectations. They are determined by selecting the right technology partner to enable digital transformation, before activating loyalty programs that reduce acquisition costs and increase footfalls through a seamless shopping experience.

A key feature of a conglomerate loyalty program is that it enables transferable rewards for multiple brands across the different services offered by the corporation, at once, under a singular program.

Let’s look at some of the emerging insights that are redefining conglomerate loyalty in Dubai:

1. Redeeming Points Across Brands at Participating Stores

Al Tayer Group’s loyalty program Amber enables this at ease. Shopping at any participating Amber store enables earning Amber points which can be redeemed on one’s most loved brands. This purchase can be made both in-store and online, if the retailer owns an e-commerce storefront.

al-tayer-conglomerate-loyalty-dubai

Making every experience unique with its sophisticated capabilities and resources, Amber has successfully refined customer experiences by enabling customers to shape their own rewards. Classic cardholders earn 1 Point on every AED1 spent. Accumulated points can be redeemed while shopping at participating outlets after 10,000 Amber Points. The card is free to apply for and there your membership upgrades from Classic to Select to Plus the more points you accumulate. Points expire only two years from the date of purchase. The points you earn depend on the type of purchase you make within the Al Tayer Group in the UAE, Kuwait and Bahrain and whether you are a Classic, Select or Plus cardholder.

The same concept is adopted by Wafi Group’s Malls where across varied stores the points earned can be gathered for long-term loyalty towards Wafi retail outlets all over the country. Frequency points get added if more purchases are made at selected stores that favor higher spending.

2. Claiming Automatic Cashbacks

shukran-rewards-conglomerate-loyalty-dubai

The same principle of redeem-across-stores applies to Landmark Group’s highly popular program Shukran Rewards, with the key difference being the option of availing instant cashbacks. When you shop at any of Landmark Group’s UAE or even GCC outlets, points can be exchanged for cash and there are absolutely charges for membership or renewal. This program is truly rewarding as it builds on the promise of instant gratification over delayed rewards. Customers need a minimum of 500 Shukrahn points to redeem them, and it is equivalent to AED25. The amount earned varies depending on where the customer shops. An AED2000 purchase at Babyshop, for example, will earn 2000 Points, while the same at Fun City gives him double or 400 Points.

3. Personalized Coupons with Attractive Discounts

Online grocery shopping became one of the most essential D2C activations at scale during the pandemic. The French multinational corporation – the world’s eighth-largest retailer – Carrefour basically offers all things fresh and wholesome for the kitchen at their retail stores/supermarket. They became extremely popular during lockdowns for hyperlocal delivery when people were cooking more than ever. The Carrefour rewards ecosystem MyCLUB was, then,  initiated to make the essential shopping experience as gratifying as possible. Upon earning just 500 points through in-store or online purchase, an AED50 Carrefour loyalty voucher can be earned and the membership for a card is absolutely free. Bonus points can be collected for free food and a total of 4 vouchers can be utilized at one time. 

carrefour-rewards-conglomerate-loyalty-dubaiWhat’s notable is that the loyalty card tracks personal shopping preferences and offers personalized discounts accordingly that don’t expire, and this keeps the shopping experience as flexible as possible for consumers.

A similar program is offered by Union Coop – the largest consumer cooperative in the UAE as it operates 23 branches and four malls (Al Barsha Mall, Etihad Mall, Al Warqa City Mall and Al Barsha South). As part of their Tamayaz program, one point is earned for every AED1 spent. On accumulating 3,000 points, only cardholders get a personalized AED50 voucher, which can be used against a shopping bill. This can be used against the next purchase in stores and at the brand’s web store. While having a card is mandatory, it is absolutely free and offers great benefits over time. Vouchers are customized to offer instant discounts on selected products as well.

4. Exchanging Air Miles for Other Services

Whether for flights or accommodation, Air Miles offers transferable rewards based on the miles earned through online purchase. Customers can earn up to 3 Air Miles for just AED1. This is a card-based program wherein the spends can be in conjunction further with HSBC to earn additional points. Other partners include  Spinneys, Sharaf DG, Damas, Chilli’s, African and Eastern, and others. While booking flights is a key function of the card, the benefits are utilized while shopping at all partner outlets and online. This long-standing rewards program is global, but sees the highest popularity in the UAE. It was created by Sir Keith Mills, and began in the UK in November 1988. British Loyalty Management Group (LMG) operated it first, and later licensed the rights to other operators. LMG was later acquired by Canadian firm Groupe Aeroplan, now Aimia, which retains the Air Miles name and logo internationally. Aimia is the majority stakeholder in the Air Miles program in Dubai which is run by its subsidiary called Rewards Management Middle East.  

air-miles-dubai-conglomerate-loyalty

5. Rewards as Experiential Treasures 

Time Out Dubai’s City Card loyalty program is aimed at unlocking experiential marvels across traveling, dining as well as hotel accommodation. Customers don’t earn points on this card, they just have to look for recent discounts and receive them by simply showing their cards. Anyone can register and the City Card is absolutely free with discounts available at all times for the aforementioned experiences to be as unique as possible. For this, the partner retailers are chosen with the experiential objective in mind across restaurants, shops, leisure activities and luxury hotels. The idea is to ensure that customers are enjoying the Dubai experience, at large, while utilizing the discounts offered by the advertisers. These partnerships are beneficial to both parties involved equally.

Dubai is, therefore, taking necessary steps to encourage shopping experiences like no other. Loyalty programs are driven by sophistication and the desire for a constant upgrade. Customers are ultimately looking for high quality over quantity and will pay more for benefits that are designed for comfort and maximum luxury. This is what defines the culture in the country, for there are high expectations that are held from brands that need to deliver on their promises.

Celebrating Loyalty with Ramadan Marketing Campaigns

Celebrating Loyalty with Ramadan Marketing Campaigns

Ramadan marks the most auspicious time of the year for the Middle Eastern community. It is not only about peaceful fasting, familial gathering or extravagant feasting, but also generous gifting and donation as well. A joyous occasion that brings people together for rewarding experiences. Over the course of this 4-week festival, apparel, footwear, and luxury brands, in particular, find an opportunity to not only improve customer loyalty through personalized messaging and rewards but, in fact, use it as a key lever to efficiently optimize high-spend marketing campaigns.

In the MENA region, while the purchase volume or basket size hasn’t increased in the pandemic’s aftermath, the average transaction value (ATV) has, and that too incrementally. Consumer behavior has shifted to valuing the quality of products over quantity, making people willing to pay more. This is a ripe moment of truth for leading high-end retail brands to capitalize on through the right kinds of loyalty programs. In fact, nearly 25 of our own brands benefited from dynamic voucher-based rewards and recognition that factored in real-time personalization to increase engagement. As a result, Ramadan marketing campaigns proved to be successful exercises in celebrating customer loyalty by doubling the sales by highlighting the festive aspects of targeted communication.

Tracing the Week-on-Week Impact of Loyalty Programs during Ramadan

The first week of the festival is always about connecting with family and friends at home first. Hence, the frequency of customers visiting brands online is low. This, however, increases over the second week leading up to the fourth where there’s an evident spike in the normal consumption pattern (see the charts below). While 2020 was a year of stagnation due to COVID, 2021 saw a significant uptake in high-priced items being sold more even as the basket size didn’t grow in comparison to the pre-pandemic spending.

Brands, therefore, need to progressively build their interactions with customers during this time (weeks 2 to 4) with personalized messaging across the right touchpoints and with the right kinds of rewards. 

ramadan-2022-marketing

Overall, we observed that while Dynamic Voucher Schemes (DVS) were the most effective from an engagement standpoint, point-based loyalty programs with the right notifications drive sales like nothing else. Here are four crucial factors that must be considered while designing these programs:

1. Acting as per Changing Consumer Preferences

After COVID, most consumers in the Middle East have become more certain of their preferences. They have had the time to reflect on past purchases, and are now more discerning about the quality or the value of products rather than experimenting with too many constantly. This is a unique opportunity for brands to increase affinity by building loyalty. In fact, we observed that in 2021, the purchase power steadily increased as people began to spend less time in lockdowns. As people readjusted to working remote and supply chain issues began to be resolved more smoothly, spending increased. But it was primarily to make better buying decisions that customers paid more for fewer products than before. Here, the point-based system offered brands the opportunity to build trust among loyal customers who are coming back during Ramadan 2022 to avail the accumulated shopping benefits.

While earlier push notifications were the norm, in 2021 it is clearly hyper-personalization through points’ promotion that works best for UAE’s leading apparel and footwear brands.

2. Building Behavioral Loyalty

This brings us to the next factor of trust-based repeat purchase that is an outcome of previous positive experiences. Gratification goes a long way during Ramadan, as customers are already in the mood to generously give their loved ones what they like. Thus, gifting-based marketing campaigns that drive behavioral loyalty through dynamic vouchers (DVS) can be major profit drivers. For instance, keeping track of past purchases to figure out the customer’s purchase pattern as well as using real-time search data to figure out his interests can generate personalized coupons instantly. Customers can be targeted with these when they are viewing products and a layer of gifting-based communication can be added to engage them further. This works very well to retain the brand’s most loyal customers, who, as per the 80/20 rule, contributes to sales more than new ones. To acquire new customers through the loyal base, further gratification could be introduced through the ability to earn discounts by recommending the brand to friends who are also looking for unique gifts during Ramadan for their own circles. This leads to the formation of an engaged community that is very much attuned to the spirit of the festival at large.

Beyond WhatsApp sharing notifications, coupons are way more effective in terms of driving engagement.

3. Reactivating Lapsed Customers

The right loyalty program – with Flat Offs and Coupons – allows the brand to re-engage with lapsed customers who return during Ramadan. They may have had pending cart items in the past based on which they can be targeted with the right discounts during this period. By nudging them with targeted communication and adding bonus loyalty points can inspire future purchase by sustaining the customers’ interest in the brand. It makes them feel more valued – laying a strong relationship foundation at the very start. These bonus points are a great way of attracting some new customers as well, even if the new registrations are relatively low during the festival. Even if the customer doesn’t avail the discount, the festive time allows for higher levels of consideration and increases the probability of return. This is a great way to target lapsed customers who would have otherwise easily switched over to competing brands in the category. Showing an interest in such customers is a responsibility that can drive long-term results and build a strong case for CRM where it did not materialize before.

ramadan-2022-marketing

4. Retention of Active Repeat Customers

Point-based promotions such as ‘500 Points added worth 100 AED, as a token of gift for Ramadan’ can be executed to improve the retention of active repeat customers. Moreover, targeting one-timer (OT) customers with Coupons or Flat Offs will encourage them to revisit the brand and become repeat customers.

Ramadan marketing campaigns are, therefore, crucial exercises in building a loyalty-based ecosystem that facilitates the future purchase of high-value items. Discounts and coupons with personalized festive messaging can go a long way in terms of building customer retention as well as retargeting previously disengaged customers and making them feel valued enough to become new loyal customers. The spirit of the festival encourages a solid reciprocal relationship between brands and shoppers that is a lasting one if marketing engagement is consistent with well-timed messaging as per changing consumer needs in the post-pandemic era.

5 APAC Loyalty Trends That Will Endure

5 APAC Loyalty Trends That Will Endure

Now more than ever, people buy most from brands that drive the highest affinity through digital media. And there is no region more mobile-friendly and digitally agile than the APAC region. 92% of shoppers in the SEA countries agree that they would be more enticed by loyalty programs while making purchase decisions. Marked by a permanent shift in lifestyle choices, Indian, Chinese, and Japanese consumers are particularly more loyal towards brands that generously and consistently reward them due to long-term retention strategies. 

Over the past two years alone, there’s been a proliferation of loyalty-driven brand success stories from the overall landscape. Covering a diverse set of Asian loyalty programs, let’s dive headfirst into 5 trends that promise ever-lasting value.

1. MULTIBRAND MOBILE APP OR WEBSITE-BASED PROGRAMS

Customer-centricity remains a top boardroom priority even while market conditions are unstable for most industries in the pandemic’s aftermath. This is where leading brands are coming together to offer mutually beneficial rewards to a common consumer base. Multibrand rewards are proving particularly valuable to partner-brands and their consumers due to easily transferable benefits.

singapore-airlines-kris-flyer-loyalty-program

Singapore Airlines’ Kris Flyer loyalty program, which was extended into KrisPay and finally Kris+, excels in this space by offering a whole host of exchangeable rewards across 650 retail outlets to those who gather more miles after signing up. With Kris+, they also launched its personalized and interest-based rewards extension with 150 partners on board. Its UI-enabled customization makes the experience more fulfilling for frequent flyers.

In India, PAYBACK recently launched one of the largest loyalty-driven partnerships with retailers from across 100+ brands through its website, as it serves as the main traffic destination. With the online commerce takeover, driving ROI through sustainable brand-consumer relationships has never been more critical. Multibrand programs clearly play a crucial role in this regard. 

payback-multi-brand-loyalty-program

Malaysia is another country in the SEA region that is building automated engagement through AI-powered loyalty. Its first premier consumer rewards program, BonusLink. It creates records that automatically segregate consumer preferences and target them accordingly with the right set of rewards across all relevant touchpoints – SMS, email, and web. BonusLink today has 12 million subscribers, now with a new merchant app called BLINK that also enables F&B merchants to reap benefits through an easy sign-up that then links back to the AI-powered engagement system.

2. PAID OR SUBSCRIPTION-BASED LOYALTY 

sephora-subscription-loyalty-program

With the ultimate retail takeover of e-commerce, paid or subscription-based loyalty continued to rule the roost. McKinsey reported that 42% of consumers are bound to buy again once they pay the initial fee, and 50% are likely to be more loyal to the brand over competitors. In fact, paid loyalty programs have become not only fundamental determiners but also key competitive differentiators for the strongest brand-consumer relationships. Across the APAC region, Amazon Prime is the biggest success story in terms of paid loyalty for offering a whole host of benefits with a single, one-time yearly subscription. Beauty brands like Sephora and popular fashion-retail brands like H&M also championed the paid membership with exclusive insider access and customized discounts.

3. GAMIFICATION

shoppee-gamified-loyalty-program

Gamification is riding high and is here to stay for long. To make loyalty programs more interesting and engaging at once, Shopee – a leading e-commerce platform in the SEA region and Taiwan – launched an exclusive tier-based rewards system that offers its shoppers customized vouchers for all their needs. Based on the total number of orders completed every 6 months, each customer achieves a unique loyalty tier on the gamified Shopee app. Each tier implies earning a virtual card simultaneously – Classic, Silver, Gold, and Platinum. 

While all Shopee users start off with the classic tier, they can be upgraded to earn privileged customer vouchers easily as they continue to shop more. The first 10 completed orders mean moving on to the Silver tier, and so on. 

The exclusive vouchers are spread over exciting brand deals, normal everyday essentials as well as cashbacks and discounts on overseas deals. Through its holistic, cycle-based approach, loyal customers are allowed to assess their purchases as per the rewards they generate and, thereby, continue to remain engaged but in an informed manner. This is a win-win situation for the brand and its customers, generating a long-term relationship that’s fulfilling.

4. EXPERIENTIALLY EXCLUSIVE LOYALTY

The aviation giant, Emirates, is running its most successful premium-subscription model that gives members access to free upgrades and generous discounts on tickets among other benefits. These include exclusive experiences such as the Emirates business lounge access, extra baggage allowance, and electronic passes which customers can avail to make their traveling more luxurious and at ease. This program is called Skywards+ and it can be paid for through an annual fee-based subscription. The premium model offers the cash+miles option for availing earned credits on the next flight, while also opening lounge access across 10 countries across the world. If you’re a frequent flyer on Emirates who books paid tickets, the 20% bonus Skywards miles will add up, as will the 20% bonus Tier Miles for the most expensive subscription.

eraclub-indonesia-leading-loyalty-program

Crafting unique rewarding experiences that address the varying socio-cultural nuances of consumers is another major trend that’s taken the region by storm. Indonesia’s innovative telecom device-distributor, Erajaya, recognized the value of offering different devices and plans for its customer base by designing an experience-based rewards ecosystem. With the introduction of Era Club, they disrupted the sector through an award-winning loyalty program that builds loyalty one customer at a time through multi-tier points earned and redeemed for different devices and their accessories. Beyond persona-based personalization, this also looks into the differences in mobile preferences based on culture trends that are required to craft unique purchase experiences. The focus is on optimizing the end-to-end customer experience (CX) through a points-based mechanism that facilitates not only the ease of choice but also experiential satisfaction – driving brand loyalty significantly

5. INSTANT GRATIFICATION

This is probably the most lasting trend to ever come about in the space of loyalty. All consumers in India for instance are constantly looking for instant rewards at their easy disposal. A standout loyalty program in the country is the Landmark Rewards Program. It offers all its customers the luxury of instantly redeeming a range of rewards such as flat savings across the apparel category the brand caters to. This award-winning program is a huge success for the brand as it also offers cardless rewards that can be redeemed across 250+ locations with exclusive offers pouring in at all times of the year. After an effortless and easy sign-up, customers are encouraged to spend to earn more benefits, explicitly tagging the program as ‘Earn and Spend’.

landmark-rewards-program

Often a cultural day of large-scale significance can also drive loyalty. In China, for instance, most food and beverage retailers offer samples of their products for free during festive occasions like the Chinese New Year. The special treatment through instant gratification meted out as free gifts allow for seamless and long-lasting connection with existing and new consumers. This is actually expected a lot more in China due to high cultural standards and demands from brands. To commemorate their members using the concept of a topical day,  the Chinese Watson’s loyalty program celebrates every 5th day of the month with a special Member’s Day campaign when points are worth 5 times more than usual. This keeps consumers coming back long after the program ends.

The above trends indicate the innovative changes made by agile brands to sustain their customers’ faith and reliability alongside engagement. They are likely here to stay, with companies progressively overcoming organizational, cultural, and technical challenges. Moreover, digital transformation steadied its course as consumer behavior changed forever during lockdowns. Under these challenging post-Covid circumstances, only those APAC brands that can bypass their traditional marketing siloes to make greater leaps in terms of improving loyalty are, ultimately, growing the fastest. Get in touch with the experts at Capillary Technologies to know more about how to implement them.

MaaS (Mobility-as-a-Service) and the Future of Fuel Retail

MaaS (Mobility-as-a-Service) and the Future of Fuel Retail

As advanced electric self-driving technologies transform the motor industry, mobility-as-a-service (MaaS) is at the frontier of fuel retail innovation. With a plethora of efficient digitized ride-hailing or sharing platforms growing globally, both public and private transportation are more convenient than ever. BCG predicts that by 2030, the shared mobility market will be worth $300 billion, before accounting for a projected 20% of total passenger miles by 2035. The major shift in consumer perception that’s driving MaaS is the transition from costly vehicle ownership to efficient and agile shared mobility. This phenomenon is the future of fuel retail in an era where reducing our carbon footprint through sustainable, alternate fuel consumption is critical. Younger populations are quickly opting for electric or alternate fuel-led MaaS as a result of digitized ride selection and payment enablement. As a result, MaaS is integrating itself rapidly within fuel retail in the pandemic’s aftermath.

With nearly two-thirds of the world’s population preparing to live in cities in less than a decade, consumers will economize their fuel expenditure and opt for shared mobility. 

The greatest enabler for fuel retailers in this regard is digital transformation. They will integrate their services within the larger MaaS ecosystem through streamlined planning and operational excellence. Let’s look at a few leading examples.

Leading European Urban MaaS Models and how they get it right

Globally, while Uber and Lyft pioneered to set MaaS into motion, Finland and Norway made major strides in terms of disrupting traditional mobility services through apps like Whim in Helsinki and the public transportation authority (PTA) Kolumbus in Stavanger respectively. Through the advent of smart mobility systems, these nations operationalized not just ride-hailing or sharing but flexible modes of transportation as well. Whether cycle, train, bus, taxi, car, or bike share, both private as well as public commute options are now at the customers’ disposal. All they have to do is make a selection of pick up and drop locations, timings and mode of payment, before the smart mobility system fulfils the order in a fast and efficient manner.

The principle is to meet varied mobility and transport needs with maximum choice, convenience and flexibility.

mobility-as-a-service-maas-system

The end-to-end trip planning, booking and execution on Whim, for instance, is so seamless that customers are more than satisfied. They are happy to leave their cars behind and will probably avoid the investment and maintenance costs of private vehicles altogether in time. The electronic ticketing and payment services also take into account the fuel requirements and enable real-time mapping of consumption versus expenditure. This provides a win-win situation to both the MaaS app as well as the fuel retailer through predictive estimates that determine pricing. Unique identity tokens are provided to customers for full security of their transactions, and there’s a robust loyalty engine that facilitates rewards to ensure repeat purchases by driving value and thereby retention.

Across Europe, this peer-to-peer MaaS model is being further advanced. Paris, Eindhoven, Barcelona and Vienna have all pivoted their shared-mobility offerings towards establishing strong omnichannel networks that facilitate better customer experiences.

The Great MaaS Integration within Forecourts 

To facilitate a strong CRM and a user-centric mass mobility paradigm, fuel retailers are also jumping onto the bandwagon. Their integration within the ecosystem ensures that forecourts serve as one-stop destinations for varied MaaS-related services. The idea is to equip apps like Whim with smoother operations so that the customer journey is optimized for faster refills. Alongside making fuel an app offering, a host of loyalty benefits – ‘Purchase Up & Go’, targeted bundle offers, promoting private label products (C-store), etc –are activated in tandem. This determines the future of fuel retail as more personalized, rewarding and tailor-made as per changing customer MaaS preferences.

MaaS is Propelled Forward by AVs Transforming Fuel Retailers 

Lastly, the rise of autonomous vehicles or AVs is significantly advancing MaaS. Both new age players like Uber as well as traditional OEMs like Toyota are partakers in revisioning the MaaS market through major self-driving innovations. The larger proportion of these autonomous shared vehicles will be electric and thereby enable more cost-efficient means of transportation.

mobility-as-a-service-maas-forecourts-fuel-retail

This means that fuel retailers will have to quickly adapt by transforming fuel stations into recharging facilities for electric vehicles. And a host of personalized loyalty programs will improve the customer journey to ensure that the integration of MaaS with AVs is seamless. 

With the growth of this trend, more dedicated AV parking and recharging facilities will have to be optimized from an operations standpoint. The outcome will be advantageous to both fuel retailers, AVs and customers with an overall reduction in cost, time as well as traffic at service stations. Convenience will, thus, become the new norm in the world of fuel retail that adapts to shared mobility services in the near future. Retailers will also have to focus on customizing their services as per the unique needs of MaaS customers. Leveraging e-commerce and the right tech stack can enable an omnichannel presence that keeps evolving with agility. On-demand products like food and beverages that accompany longer commutes can be majorly leveraged alongside fuel.

By effectively transforming their existing asset networks and marketing capabilities, fuel retailers will ultimately have to push for such new value pools to maximize profit through the MaaS model. For future survival and growth, they will have to also launch new products that innovatively advance the integration of AVs within the ecosystem and, ultimately, venture on the path of fuel-retail loyalty to build brand advocacy. Smart city logistics hub will play an instrumental role here, in terms of mapping out the unique needs of customers as per varied city locations and routes. An array of convenience store offerings, moreover, will help establish a smoother ride-sharing experience that will ensure business growth through multiple avenues. The future of fuel retail is, thus, electric, automated and mobile beyond all previous regulations. To know more about the fuel retail industry and the dynamics of fuel retail loyalty in future, connect with our team of experts here.

Subscription Loyalty Programs: Now Under the Lens

Subscription Loyalty Programs: Now Under the Lens

The recent e-commerce boom ushered in a brand new era for customer experience. Whether through human-centric design, personalization engines, or omnichannel scalability, we witnessed brands adapting efficient, data-driven marketing practices. Of these, the most effective for both top-line and bottom-line growth was the implementation of subscription-based loyalty programs. By asking customers to pay a small fee to enroll in paid programs, while acquisition and retention metrics flourished, the ultimate win was engagement. Consequently, decision-makers – who once perceived loyalty programs as a cost center – now agree that subscription-based reward programs are nothing but revenue streams that function as fitting extensions to e-commerce enablement.

Understanding Paid or Subscription-based loyalty programs

Paid loyalty programs are reward systems that ask customers to make some sort of upfront fee payment to then reap a whole host of benefits. This payment could either be one-time or recurring, but it promises to deliver more value to customers in the long term. Think of it as an investment plan that simply doesn’t fail and has absolutely no risks involved. Subscription-based loyalty programs might have started off as free before customers were nudged to upgrade to a fee-based premium model. Amazon Prime’s subscription-based business model is probably the most widely-known example of this evolution.

As long as brands begin with some incentives in the free program, it is estimated that 81% will shift to paying a fee as long as the benefits outweigh the cost. And better rewards ensure a higher subscription probability for greater ROI.

The advantages they bring

The primary advantage of paid loyalty programs is that it boosts customer activity in a way that simultaneously captures high-quality behavioral data. Moreover, the reciprocity between brands and customers grows stronger than ever. Brands are providing their most loyal customers with value that’s coming at a cost to the member. This generates new revenue while improving the overall quality of valued and committed customers. What could possibly be better than that?

Further breaking down subscription-based programs

The easiest way to understand how the paid loyalty model works is to think of the reward-on-investment principle. Every investor wants to make the most out of every buck invested. Customers want the same, except in the form of new benefits. As long as the initial fee is utilized to promote products that further incentivize the customer journey – it’s a win-win situation for both parties. Incentivized engagement leads to incentivized purchase and, ultimately, ensures a positive experience.

McKinsey has forecasted that members of paid loyalty programs are 60% more likely to spend on the brand after subscribing. This basically means that the value-based relationship has longevity and promises to sustain itself. Nurturing paid members is a massive opportunity for brands to learn more about their preferences and offer future product suggestions and benefits accordingly. This is, therefore, almost a foolproof method for high-end, high-purchase frequency customer retention. Personalization has never been more lucrative than customer-oriented paid loyalty programs. An important aspect is also offering both exclusive gifts and experiences to those customers who showcase loyalty consistently. For instance, in the travel and hospitality sector, we know that premium customers get rewarded with free upgrades, more miles, and business class treatment even if they are flying economy. The fact remains that paid loyalty works, and almost all other B2C sectors can profit from it. Let’s now look at the brands that have innovated the most in this direction.

4 brands powering customer engagement with subscription loyalty programs 

1. Sephora’s Beauty Insider

sephora-subscription-loyalty-program

 

In a stunning turn of events after the introduction of their ‘insider’ program, Sephora – a leading beauty brand – achieved 80% of its sales from paid-loyalty customers. Today, they have over 25 million such subscribers who get to choose how they use their reward points. They can redeem points for almost anything that Sephora offers from gift cards to free cosmetics as well as influencer meet and greet events. Without reducing the cost of its products, this rewarding system ensures that customers have a flexible and open relationship with the brand – incentivizing them to pay more for every purchase.

2. Amazon Prime

amazon-prime-subscription-loyalty

It’s almost impossible to not talk about the origins of Prime when it comes to e-commerce. The biggest frontrunner in this space recognized the value of paid loyalty early on in their journey when they realized that customers need to feel like they earned their quicker shipping at no cost. Or, their favorite films and TV shows at a low annual cost that includes a whole host of fulfillment benefits. This ingenious strategy made the albeit growing business flourishes faster than expected, with sales skyrocketing through loyal, paid Prime subscribers globally. The ‘two-day’ shipping bait doesn’t even require continuous fees, but a one-time payment that does the trick. Thus, instead of pushing customers for more purchases, the ease of quick delivery and added services like Prime Video just enhances the privilege of ordering through the platform in comparison to others. This is, by far, the most seamless way of providing a positive experience that’s simply more appealing than any other.

3. Starbucks Rewards

starbucks-subscription-loyalty

It is no surprise that Starbucks has managed to sustain its high pricing strategy for its products mainly through rewards. Their successful ‘Starbucks Rewards’ app is based on a low fee, high rewards model that ensures revisits, even if for the free coffee that was easily granted after only a few purchases. It makes sure that the customer feels appeased on their birthday, moreover, with another free beverage – building a higher customer lifetime value overall. These free drinks bring the negligible cost to the company at a very high ROI.

4. Gamestop PowerUp

gamestop-subscription-loyalty

In the gamer’s world, points and rewards are all the validation they need. Gamestop escalated their previous loyalty program called Edge to a premium or paid one just to gratify gamers one step further. Through a host of benefits during and after games that one can pay for upfront, Gamestop acquired a huge set of additional customers who kept returning for more. This rewarding mechanism called PowerUp makes customers feel more empowered while playing their favorite games, improving their experience significantly.

It is evident that as customer interactions evolve with technology, the rewards ecosystem continues to evolve simultaneously. The more customer data brands can gather through paid loyalty programs the better. It will enable them to have an edge over competitors when it comes to offering personalized rewards through a paid subscription that, in turn, offer customers a whole host of benefits for the long haul. Ultimately, the prospect of reciprocity signals better customer lifetime value. To better understand the efficacy of subscription loyalty programs, book a demo with our experts today.

 

Welcoming D2R (Direct-to-Retailer) – A Major CPG Disruptor

Welcoming D2R (Direct-to-Retailer) – A Major CPG Disruptor

While the D2R (direct-to-retailer) model was a formidable force even prior to COVID-19, it surreptitiously became a superpower for the consumer packaged goods (CPG) industry during lockdowns. With the surge in demand for essentials, the CPG supply chain underwent rapid transformation underscoring the importance of hyperlocal convenience store pick-ups to ease ecommerce fulfillment challenges. Thus, strengthening the long-term ties between CPG manufacturers and retailers through loyalty channels has never been more crucial. But what does this post-pandemic D2R model entail, and how does it benefit leading CPG brands? Let’s decode this further.

To understand D2R, we first need to look at the traditional supply chain model. Traditionally, in the case of CPG brands, the products are first sent by the manufacturer to the wholesaler and the distributor before reaching the retailer and, then, finally the consumer. These multiple middlemen who intervene in the distribution process, hinder brands from interacting directly with their two key sales drivers – local retailers and end-consumers.

traditional-distribution-model-cpg-industry

Direct-to-Retailer (D2R): The new-age pathway in CPG  

This painstaking networking and distribution process has been revolutionized by digitization to create a value-driven model in CPG, leading to the new-age D2R (direct-to-retailer) and D2C (direct-to-consumer) pathways. While D2C has been adopted at a wide scale through online commerce, retailers and their hyperlocal convenience stores too play a crucial role in mitigating fulfillment obstacles. There was a lot of demand sensing an immediate action required from retailers during lockdowns, as in the case of the CPG industry – it didn’t make sense to sell all fast-moving goods online. The retailers’ role became especially indispensable. This is primarily for two reasons.

  • Firstly, all low-cost basic necessities continue to be relevant at stores where they can be picked up easily – with effective product mixing and differentiation – and without a minimum order payment or delivery cost.
  • Secondly, retailers can also act as pick-up points for online deliveries that could not have been facilitated otherwise such as the buy-online-pick-up-in-store (BOPIS) option. This means a faster go-to-market retail strategy for leading players at higher profits.

D2R is essentially the pathway that allows for a direct licensing contract between brand owners and retailers – eliminating middlemen who squeeze margins. 

value-driven-model-cpg

Once a D2R agreement is effective, the retailer becomes the seller of the licensed merchandise. Products often also get manufactured and then sold directly by the retailer, who becomes responsible for their in-store marketing, while paying a royalty to the brand owner. Businesses and retailers are, thus, coming together to foster healthy growth for both parties. While businesses benefit from the increased margin, private-label push reduced product development/delivery time, retailers ultimately reap increased profits by building their own enterprises in collaboration. This is precisely where the role of building loyalty programs to reward retailers for their own growth as well as the licensor’s penetration becomes crucial. But, first, let’s look at the D2R model more closely within the purview of CPG brands.

D2R model and its multiple advantages for CPG brands

Direct-to-retailer deals allow for long-term associations that prevent CPG products from going out of stores with the highest footfall. In the wake of massive supply chain disruptions, while enterprises are struggling to meet their D2C fulfillment goals, established CPG businesses innovated heavily through existing D2R relationships.

  • Tracking changing consumer preferences through retailers’ massive POS data repositories has led CPG brands to benefit greatly. They can install a variety of new software within the retailers’ payment tracking modules to further incentivize purchases while gathering relevant insights on customer preferences.
  • Licensing to retailers directly also drove other lucrative benefits for Unilever, Nestle, and Mondelez, who gathered customer intelligence from local stores to launch relevant new product lines for post-COVID high-growth categories – health and home care.

These CPG giants wanted to offer new products or improve the formulation of existing ones during the pandemic. But, without retailers, gathering customer intelligence for product innovation is tricky for fast-moving brands since they are primary storehouses for varied data points. For CPGs, the growing need for new and advanced health and wellness-related products after the pandemic meant collaborating with retailers to gather effective customer expertise that determined their course. Establishing the right relationships with the right retailers proved crucial to get access to retailers’ inside intelligence as well as have proactive conceptual discussions for the new launches.

If a direct-to-retail property is underperforming, retailers will generally try changing the product in some way (the design or material, for example) before taking it off the shelf. If it is forced to remove it then the chances are it will look for other properties from existing partners. Once a retailer partnership is formed, it generates incremental value for long periods and is self-sustaining with the right set of rewards in place.

Successful D2R Strategies Need Partner Reward Programs

The enduring benefits of D2R are clear in the CPG industry, and so the reliance on retailers will remain despite D2C growth. To ensure the long-term relationships between CPG brands and the convenience stores, there needs to be sufficient incentivization through digital communication channels. Most licensors believe that retailers may not be committed to them beyond the initial push-off phase where they are merely establishing new product lines. This fear can be eliminated effectively and seamlessly through D2R loyalty programs that not only reward retailers but establish consistent relationship-building between the owners and licensees.

A loyalty channel activation can not only enable rewards for retailers but also provide CPGs with the relevant customer insights needed. Brands can then anticipate, quantify and predict future purchase trends.

A singular retailer communication and rewards portal, that shares updates on the CPG owner’s performance, new launches, and other relevant moves, facilitate trust building to encourage further collaboration. It also becomes the loyalty channel that provides the brand owner with the relevant customer insights it needs from retailers. Brands can then anticipate, quantify and predict future purchase trends. PepsiCo did this to effectively engage with 40,000 convenience stores at once while incorporating a customizable loyalty program into its proprietary retailer platform. Such programs include gamified retailer surveys, partner rewards, perks, tokens, and much more. To learn more about efficient ways of launching D2R rewards for your CPG brands, get in touch with our experts at Capillary Technologies.