In 2019 when Philippines emerged as one of the fastest growing economies in the world, many opined that it might emerge as the next tiger economy. But with the advent of COVID-19 pandemic, Philippines’ economic growth dwindled. It’s 2022 and the time of unexpected disruptions is almost over. In the Philippines, some of these changes have stuck around while others have evolved into new trends. This year, a new hope has risen as household income across the country has improved, giving Filipinos a chance to spend more.
Unlike other countries where brand switchers were rising, the Philippines was an exception. In a recent interview with the Inquirer, NielsenIQ managing director for Myanmar, Vietnam, and the Philippines, Patrick Cua said that “Filipinos largely stuck to their original brand choices even during the pandemic. They were generally watchful of their daily spending but did not rapidly switch to a cheaper challenger brand.” Thus, as the Covid-19 waves drift away, the Philippines has become an encouraging landscape for brands looking to build a strong and reliable loyal customer base.
3 Consumer Trends in the Philippines pivoting towards customer loyalty
1) Seeking vouchers: In a recent search by Google in the Philippines, it was found that there is a 47% increase in searches for ‘voucher code’ reflecting the rising usage of online marketplaces and promotional offers on those platforms. While this was encouraged by some sale promotions offered by brands allowing consumers to break free from their pandemic hesitations and bring them back to the stores.
2) Leveraging omnichannel: While digital channels were facing a slow-paced growth in the Philippines, the pandemic pushed for a more omnichannel marketplace, where consumers can choose their mode of transaction or interaction with a brand depending on where they are. Some consumers are hungry for an in-store experience, and others may visit stores only to get the touch and feel of a product before buying it online. Overall, Filipinos find themselves comfortable in a blended shopping experience combining both digital and physical aspects.
3) The internet boom: In 2021, the Philippines topped the world for average time spent on social media. According to the annual report released by We Are Social and Hootsuite, it was found that Filipinos spend an average of 4 hours and 15 minutes each day on social media. Making an interesting observation about internet usage in the country, Ray Alimurung (CEO of Lazada Philippines) said in an interview with Mckinsey: “I have noticed that a lot of Filipinos’ first interaction with the internet is through the use of a mobile app. The app and, in turn, the phone have become gateways to the internet for the Philippines, and the implications of this are astounding. This has resulted in the equipment of every citizen with a “supercomputer” more powerful than what was used to land Apollo 11 on the moon.” Thus, internet usage through mobile is becoming widely prevalent among Filipino consumers.
Also, after relaxing a three-decade-old foreign investment rule in March 2022, the retail landscape can definitely expect more global brands to enter this geography, triggering a battle for more consumer attention. In this scenario, the undoubted winners would emerge based on their scrupulously planned robust loyalty strategy.
Top 5 Philippines’ loyalty programs conquering the landscape today
1) 7 Eleven’s Cliqq
7-Eleven has 1300 stores across the Philippines with a 60% market share in the 24-hour convenience store space. Through its unique app-based loyalty program called Cliqq Rewards, customers can earn points by presenting their loyalty barcode during a purchase at a 7-Eleven store. The barcode is scanned at the point of sale and customers can get instant access to their rewards. For every PHP50 transaction, customers get 1 point. The accumulated points can be used to purchase prizes from the rewards catalogue. The app is also integrated with the Cliqq Wallet which customers can use to pay.
2) SM Retail’s SM Advantage Card
With a massive portfolio of department stores, supermarkets and specialty stores, SM Retail has cleverly interlinked its offerings with a single card – the SM Advantage Card. This is one of the country’s biggest rewards programs that offer points, discounts and freebies for every purchase at any SM store including The SM Store, SM Supermarket, Savemore, Waltermart, Alfamart, Ace Hardware, Toy Kingdom, Our Home and many more. The SM Advantage Card gives customers access to several third-party rewards and provides free home delivery.
3) Petron’s Value Card
One of the Philippines’ leading fuel stations, Petron has been offering a loyalty card for several years. Last year, the fuel retailer collaborated with Capillary Technologies to come up with an app-based digitized loyalty program to delight customers for every transaction. Users can download the Petron Value Card app, create a loyalty profile, track transactions, rewards and points and get access to tools like the ‘Station Finder’ and ‘Fuel Mileage calculator’. Users also get special access to personalized offers, benefits and can even redeem their points to buy flight tickets with 3 major airlines – Philippines Airlines, AirAsia and Cebu Pacific.
Capillary’s agile platform also enabled Petron to significantly reduce response times and integrate with other partner ecosystems. Talk to our experts to find out how Capillary can help you achieve robust ROI-driven loyalty programs.
4) Gokongwei Group’s Go Rewards
The Gokongwei Group is one of the largest and most diversified Filipino conglomerates that is spread across several verticals including telecommunications, petrochemicals, cement and air transportation. While its individual brands like Cebu Pacific Airlines and Robinsons supermarket had popular rewards programs, the conglomerate recently underwent a wave of digital transformation where they relaunched a multi-brand group loyalty program called Go Rewards. With a Go Rewards card can earn loyalty points from various transactions including refueling at Caltex forecourts, shopping at Robinsons Supermarket, and booking flights with Cebu Pacific, among others. Overall, through the swipe of a single card, customers can get access to an expanded rewarding experience thanks to the revamped loyalty strategy.
5) The Bistro Group’s BFF card
The Bistro Group is a leader in casual dining restaurants offering international cuisines such as TGI Fridays, Hard Rock Café, Pollo Loco, Italianni’s, Texas Roadhouse, Watami and so on. The company’s BFF loyalty card enables customers to enjoy perks across 80 Bistro restaurants, online booking, complimentary beverages and special delivery options. Customers can display the digital card via the Bistro app instead of the physical card to avail a 30% discount on Mondays and a 20% discount on all other days.
Philippines brands choosing a value-driven brand strategy
Value, convenience and speed are the main drivers of brand loyalty in the Philippines. While customers are open to paying more for the luxury of convenience, they also want to feel understood by brands. Therefore, loyalty is more than just offering rewards and offers; it is a chance for brands to inch closer to their customers through empathy and emotions.
Card-based loyalty has become the norm in the Philippines’ customer retention strategy so far. As a next step, some of these brands have digitized these cards to make the loyalty benefits more accessible for customers. If you are looking to launch a seamless loyalty program in the Philippines market, book a demo to know how we shaped some of the brands’ business strategies in this region.
To rebound, transform and thrive – this is the central theme of the current CPG industry. The worst of the pandemic is behind us, and CPG brands need to transition from being pandemic-responsive to navigating the way forward. Companies need to focus on tracking changing consumer preferences, identifying new micro pockets of growth, and becoming more agile to pursue fresh opportunities.
In this scenario, data analytics is the key to accurately identifying consumer demand. Brands need to base their analytics on an updated understanding of customer behavior- analyzing both short and long term behavior changes. Evidently with data and digitization taking the centrestage, where do Indian CPG companies stand today in adopting these advancements in their processes and technologies? In The Economic Times Leadership Dialogue presented by Capillary Technologies, top CPG leaders including Vivek Sharma (CMO, Pidilite), Ameya Dangi (COO, HRIPL), Neeraj Agarwal (Director, Haldiram’s), Jatinder Singh (AVP, Amway India) and Sheena George (Partner Technology Consulting, EY) joined Capillary’s CEO Aneesh Reddy to unearth the current CPG trends in the Indian landscape.
4 major trends that will set the stage for the Indian CPG industry in 2022 & beyond
1) Time to DIY
During the pandemic, the demand for DIY activities has gone up. Vivek Sharma revealed how this has translated to the rise in demand for Pidilite products such Dr. Fixit. Apart from product demand, consumers were also looking for video content to teach them how to fix or repair things, which the brand ramped up. The brand also saw a boost in demand for arts and crafts products and videos as children needed to be kept occupied. Vivek mentioned, “The behavior of people and contractors changed and brands can no longer talk in a linear way to consumers.”
Neeraj Agarwal also shared that Haldiram’s launched DIY kits that contained ingredients to prepare a dessert, based on consumers’ increased interest in cooking a variety of dishes at home. Globally, such DIY kits have been available across various countries and are fairly new to India.
2) The physical vs digital dilemma
As the world is on the cusp of moving on from the pandemic, are all sales going to be digital? Amway’s Jatinder Singh has a different thought. He agrees that over the past two years many habits were developed. For example, the store footfalls have increased since they have opened up, but people still continue to pay via digital modes, demonstrating that a hybrid ‘phygital’ is being born. “How much of these (pandemic) habits will remain, and how many will fall apart? The next 6 to 8 months will be critical to understanding this,” predicted Jatinder.
Ameya Dangi also agreed to this, adding that many D2C companies have recently grown in the other direction. “The concept of D2C might blur in the future. You see a lot of D2C brands go into the physical world, you see brands like Nykaa setting up stores, which means that for the D2C players to scale up, they need the physical world.”
However, Sheena George from EY brought in another perspective, claiming that the need for touch and feel will cease to exist one day. “The touch and feel element is slowly fading away because experts are talking about the metaverse, more and more digital elements, and about the simulation of real experiences like simulating taste and smell. There’s lots of innovation that’s happening out there.” She also believes that in India physical touch is here to stay with a majority of the population being rural.
3) Accessibility unlocked in all dimensions
Adding his views on the physical touch, Aneesh Reddy said, “It’s not just the touch and feel, it’s also access to the product. So when you look at the BIBA e-commerce site, they sell more products in tier 3 or tier 4 cities rather than tier 1. And the answer is simple – it’s access!“
While offline stores are typically found in tier 1 cities, the e-commerce platform has certainly opened up access to people from across the country regardless of where they order from. Online orders have increased in rural areas also because of the work-from-home culture where employees are working from their hometowns.
Digital channels have curiously made smaller stores more accessible as well. Jatinder shared his experience with a kirana store owner who had adapted to social media marketing. He explained how the store owner had created an Instagram account to interact with his customers, share products or deals of the day, and created an easy and accessible shopping experience by offering free delivery.
4) From mass marketing to personalized campaigns
With the presence of data and digital, it becomes imperative to use them to focus on groups of consumers and to address their specific needs to retain them. This process is not something that can be done physically, and brands need to rely on digital tools and skilled marketers to cater to customers’ behavioral changes. Powered by AI, the right tools can help make sense of the vast data and curate personalized journeys to keep customers hooked to the brand.
Parallelly, the digital marketing quotient of the marketer needs to increase including senior members in the marketing team. Vivek commented, “We have to unlearn and learn, and I have been doing a lot of that myself.” As CPG brands traverse into the data-rich digital journey, accurately-captured data, talented marketers, and the right analytics tools are key to gain an exponential trajectory.
The explosion of data and digitization has curiously made the shopping aisle longer, unlocking several new avenues for CPG brands to innovate with their products and marketing strategies. Most of all, it has opened up gates to a whole new frontier – direct-to-consumer or D2C – an exciting opportunity to sell products directly to consumers and receive access to more customer data.
In our recent webinar on CPG in 2022: Outlook, Trends and Strategies, with guest speakers – Sucharita Kodali (VP, Principal Analyst, Forrester) and Lance Patrick (Global Price and Promotion Analytics Leader, General Mills) along with Justin Richie (Capillary Technologies’ Chief Data Officer), some of CPG’s lesser-known factors that are involved in building D2C strategies are revealed. With D2C becoming an essential route to a brand’s long-term survival, here are 6 features that must be considered while building these digital and data-rich strategies.
1) Align your teams on the D2C ‘mark’
The first step to gear up for D2C strategies is ensuring that the entire CPG brand’s organizational structure is aligned to support them. The various teams need to ally to help bring about this revolution in the brand’s roadmap. This includes building a single view of their data, applying the right technology to set up the D2C channel, and ensuring the brand is meticulously publicizing its digital channel directly to its consumers.
As rightly pointed out by Sucharita, “One of the single biggest assets that is essential to driving D2C success, is promoting that you have a website on your existing packaging. If people don’t know that you’re open for sale, who’s going to come to your website?” Eventually, effective collaboration and scalable technology will enable building agility into its strategy.
2) All sales are not the same!
The typical perspective of a brand is that it doesn’t matter where a sale comes from. On the contrary, once D2C channels are established, it becomes essential to track where sales come from, with D2C becoming more prioritized and profitable. Not only will this channel become a higher margin one, but will help the brand receive direct transactional data that will help understand the biggest brand advocates, their preferences and to test new products with them, leading to a more intimate relationship with customers.
3) Picking the right D2C channel for your brand
Developing a mobile app may be a good approach to drive engagement, but the brand must ensure a holistic approach before venturing into this digital platform. A brand’s presence across varied social platforms is equally important to leverage this medium by pairing the mobile app with captivating promotions across social media channels. On the other hand, it is also critical for the brand to optimize content for the mobile version of their D2C website, as a majority of the online shopping traffic comes from mobile devices.
While conversion is still lower on mobile compared to desktops, a seamless mobile commerce experience that is strong in every touchpoint can push customers to make purchases within a few clicks. This channel is very well suited for social media promotions, pairing them up with ads that take customers directly to a specific product page.
4) Discovering the opportunity in demand
In the last two years, work, school, leisure, and housing have all evolved, permanently altering the needs and purchase behavior of customers. In this scenario, data plays a major role in helping brands understand the demand patterns and act ahead of time.
Lance Patrick highlighted this need to leverage data as he stated, “No industry is going back to 2019. 2022, 2023 and beyond will be the different phases of the new normal.” He further added that understanding customers can help brands work ahead and adjust to those demands faster. Brands can ‘test and learn’ through data analysis even before they can ‘test and measure’. These consumer hypotheses will enable brands to drive the demand side for your benefit.
5) It all comes down to zero (party data)
Zero-party data or the data that is proactively shared by customers is the most valuable information that can be leveraged to attract a brand’s best customers. While respondents of a survey and focus groups have helped brands historically collect similar data, in the present era, customers are willing to share insights and feedback on products and are looking forward to new products from brands. This gives retailers access to a whole new set of data points that they have not pursued before, empowering them to set a clear roadmap for their products and processes.
To collect this high-value data, structural loyalty can be used as a strategic weapon. While signing up for the loyalty program, customers are agreeing to share their preferences and brands can further incentivize them for deeper insights. This enriched data in turn can help provide personalization to the customer journey.
6) AI and machine learning to interpret data
The large influx of all these sources of data may be daunting, but using smart tools powered by AI and machine learning can help interpret the data and take the next best steps accordingly. “The 2 things that clearly stood out in AI and ML are Segmentation and Personalization,” said Justin Richie, describing that intelligent tools can guide the CPG brand by:
- Introducing in-depth personalization for product recommendations beyond personalizing offers and promotions
- Analyzing customer segments and where they stand in the customer lifecycle. This will help the brand deploy various marketing tactics, right from seamlessly onboarding customers, engaging with new customers by introducing them to the brand’s products, and so on.
Tune in to our full webinar to learn directly from the experts on how to construct powerful D2C strategies.
It has been nearly 2 years since the pandemic struck and world economies have settled in for the new normal, let alone Saudi Arabia. Consumers from the kingdom are warming up to get back to normal spending levels, to make consumption choices based on aspirations rather than necessity. But amidst this new normal, do brands have the right strategies to reach out to these newly conscious consumers?
Customer retention has become more important than ever before. And while marketers are strategizing best practices, customer loyalty has become an integral part for them. Indeed, loyalty is the best way as it enables brands to win the customers’ hearts and improve the conscious consumer’s confidence in the retail landscape. However, in Saudi Arabia, loyalty is still an emerging concept, probably due to the recent and gradual social liberalization taking place in the kingdom.
While the Saudi businesses are comprehending over the importance of loyalty in their marketing strategies, here are some brands from the kingdom that have been very successful in providing loyalty programs with a wide array of rewards, discounts and other personalized offers.
1) Nuhdeek program by Nahdi Medical Company
Nahdi Medical Company is a leading chain of Saudi retail pharmacy, and its ‘Nuhdeek’ loyalty program fits all its goodness in a one-stop mobile application. Customers can register on to the loyalty program and experience a seamless purchase journey, beginning from an advanced pharmacy locator that helps customers locate the nearest store, upto a variety of convenient digital payment options. After offline store purchases, customers can easily upload a picture of their prescription to earn points. Customers can get 1 point for each 1 SAR spent, and after collecting 1000 points, they can be redeemed at any Nahdi pharmacy. The app also provides general medical information that customers are keen to know.
2) Iktissab loyalty program by Othaim market
Abdullah Al-Othaim markets have over 200 supermarkets, hypermarkets, wholesale outlets and convenient stores across the kingdom. The company’s Iktissab loyalty program aims to provide the best shopping services to customers, by rewarding discounts and offers by Othaim markets and other third-party rewards. Special offers and discounts can go upto 50% on products like smart phones, computers, food and bakeries. The best part about Iktissab card is that it can also be used with other partner brands, restaurants, international brand stores, and Saffori Land. Loyal customers enjoy special benefits during festival seasons.
3) Al Fursan program by Saudi airlines
Members of the AL Fursan program by Saudi Airlines get access to a world of benefits including free tickets, upgrades, global lounge access, additional luggage allowance and more. Apart from these premium rewards, customers can also earn and redeem miles on a network of other global airlines. They can also get offers on banks, hotels, car rentals and telecommunication brands that have partnered with Saudi Airlines. Their three tiered loyalty program namely – Alfursan Blue, Silver and Gold offers varied benefits across different tiers.
Interestingly, Saudi Airlines also has an exclusive family membership program that enables customers to earn more rewards by nominating upto 8 family members. Members can be the customer’s spouse, children of age 2 and above, parents, adopted children and home workers. Each of them will get a separate membership ID through which families can together enjoy the benefits of the program.
4) Jarir discount card by Jarir bookstore
In an age where buying books has slowed down across the world as online reading has picked up drastically, Jarir bookstore’s loyalty program has pushed more people to buy books and stationery. The Jarir Discount Card guarantees a 10% instant discount on all school and office supplies, arts and crafts supplies, books and computer bags. The brand also offers great deals on other product range including their smartphone, laptop and tablet accessories collection. Offering convenience for customers, the card can be used both at the offline store and on their ecommerce platform.
5) Qitaf loyalty program by STC
STC’s Qitaf loyalty program aims to show gratitude to loyal customers, opening doors to a variety of exclusive and high-end personalized services. Customers can easily enroll through the mystc app and begin collecting points by paying the mobile bills through the app. STC has partnered with several restaurants, electronic stores, fashion and cosmetic stores, sports stores, travel and transportation services, petrol services, charity organizations and more to offer a wide range of benefits for their customers.
There are 4 tiers in this loyalty program namely Qitaf Classic, Tamayouz Gold, Tamayouz Platinum and Tamayouz Diamond. Differential benefits are provided based on the customer’s tier entitlement.
6) Tawasul program by Arabian Oud
While spreading sweet, timeless fragrances across the globe, the popular perfume brand Arabian Oud has a tiered loyalty program called the Tawasul program. Based on the customer’s annual purchase value, it categorizes customers into four tiers – bronze, silver, golden and diamond. With a simple registration gateway, Arabian Oud offers reward and discount points that can be redeemed at any of their offline stores. Loyal customers are also privileged to get early access to offers, discounts and other information before other customers.
What’s next in the Kingdom’s loyalty space?
From a basic earn and burn model to physical loyalty cards, Saudi Arabian brands have evidently evolved towards reward-rich digital programs. Brands are gradually maturing in the loyalty space, increasingly adopting advanced technologies to power their marketing strategies. But there’s more opportunities in the horizon – capturing the customer data. In the coming years, we may see a transformed Saudi Arabian retail landscape, where customer data will be at the center of marketing and brands will catapult accurate and comprehensive data and begin to unlock its true potential.
Looking to gear up for the untapped potential market of Saudi Arabia? Connect with our expert team today to find out more.
64% of the world’s oil reserves come from the Middle Eastern region! Ironically, when it comes to the forecourts businesses, each GCC country has a different pace. While UAE and Qatar are at par with US and European fuel stations, Saudi Arabia is lagging behind. This is especially unbelievable given that Saudi Arabia has the largest reserves in the GCC countries with more than 260 billion barrels.
This is owing to the change in Saudi Arabian consumer trends, as the kingdom has recently changed their laws allowing female drivers, and with large players like ADNOC and Saudi Aramco come into the foray. On the other hand, UAE and Qatar have more advanced fuel forecourts due to their consumers’ love for automobiles.
But, petrol stations have and will become more than just a place to fuel up cars. They would become centers of wider retail offerings, personal services, delivery pick-up points, and much more. Amid this evolution, loyalty programs have become an important part of this brand new fuel experience. Keeping in mind that the fuel brands need to build their loyalty strategies based on consumer expectations and needs, let’s look at some of the trends and how brands can incorporate them in loyalty programs.
1. Mobile apps
In this age, fuel retailers can digitize the entire customer journey via mobile app. With a single sign-up, customers can find the nearest station with the geolocator, use a variety of digital payment options, explore multiple discount offers, access the ancillary stores and services, rate the experience and finally win points and rewards for the transactions. Setting up a fuel loyalty app is essential, as brands can reach out to the 174 million Middle Eastern mobile users, who are gradually warming up to digital payments and mobile wallets.
2. EV and sustainability
The global buzz on electronic vehicles and hope for a sustainable future has spread to the Middle East too. It may seem counterintuitive that consumers from oil-rich countries are moving towards EV, but there is an increasing need for this shift in a world where resources are waning and pollution is increasing. While Middle Eastern governments have already started their search for alternative fuels, brands must also participate in this change. Apart from establishing charging stations for EVs, they can also promise a clean forecourt with proper recycling, constructing stations with environmental-friendly material to create a transparent platform via mobile app to interact with customers about sustainability.
Conversations about the future are particularly important at a time when countries are planning towards net zero carbon emissions based on the Paris Climate Agreement and global discussions at the COP26 summit.
3. Non-Fuel Retail Category
Imagine your customer is off on a long trip. At some point along the way, they are bound to stop for refreshments and refill their vehicle’s fuel at one place. This is not a new concept for fuel brands to partner with QSR joints or convenient stores. However, relevant offers can closely tie the two products together and create more customer touchpoints. For example, a customer can get discounts on certain packaged foods based on fuel transactions and vice versa.
With the boom of the electric vehicles market, fuel retailers need to diversify into providing innovative non-fuel offerings and services. In a recent survey by Deloitte, around 60% of the respondents said that they buy food, groceries, fast-food meals and other non-food items apart from filling petrol at a forecourt. In terms of ancillary services, fuel retailers can offer a variety of vehicle-related checkups and cleaning, act as a pick-up point for deliveries, laundry services, bill payments and so on.
4. Fuel delivery
Contactless experiences have taken center stage since the COVID-19 pandemic. In this light, home deliveries have been extremely prominent in all sectors, and recently, the trend has hit fuel retail as well. This service is especially helpful when the customer finds their tank empty and would need petrol in an emergency situation. Several players especially in the UAE have revolutionized this trend. Apart from fuel, food, beverages and other grocery items can also be delivered. Retailers can easily integrate these services within their app to offer a seamless experience to customers.
5. Data-driven marketing
Reports suggest that customers from the Middle East are far more open to sharing data, knowing that it would lead to hyper-personalized offers and experiences. Therefore, fuel retailers may want to focus on capturing this data, creating a comprehensive view of the customer to understand their needs and reward them accordingly. Brands can then administer discounts and rewards on frequently purchased items and nudge customers to try new products or services, through notifications when they typically visit the fuel station.
Are Middle Eastern forecourts future-ready?
The future of fuel retail is closely linked to the future of transport, and in this regard, all roads lead to electric vehicles. In fact, transitioning to sustainable mobility could unlock a $400 billion opportunity for GCC countries in the next 2 decades. While Middle Eastern fuel retailers currently enjoy the high ratio of private vehicles at 91%, consumers could gradually move to EVs and shared mobility. Therefore, brands need to be prepared to reshape their forecourts with non-fuel offerings.
Get in touch with our experts to find out more about how your fuel brand can stay future-ready and improve your customer retention.
Imagine when your brand’s network of distributing partners and customers is sprawled across 6000 islands! Reaching out to them isn’t really a welcoming task by marketers. And now imagine the mammoth task of CPG brand marketers who not only have to navigate through the populous Indonesian region but also ensure that their marketing strategies work well leading to an increase in overall brand revenue. Did you know that the Indonesian landscape was once largely dominated by small-time retailers? However, with larger CPG brands foraying into the region, the need to establish a strong partnership with distributing retailers became an ideal for marketers.
Amid customers, an instant-gratification culture is now on the rise, thanks to the influence of the internet and social media that addresses their needs with just one swipe. Given that CPG products are purchased frequently, brands offer several rewards, through targeted channels at regular intervals. Therefore, loyalty programs have become the right medium to catch up with this fast-paced trend and meet customer expectations.
In our previous blog, statistics revealed how CPG loyalty has now become a space ripe with opportunities for brands to explore. We also witnessed that brands could run loyalty programs for both customers and distributing retailers. In this blog, let’s take a look at what brands have wowed Indonesians with their loyalty programs, and how brands in the CPG industry have experimented in both D2C and B2B loyalty programs in Indonesia.
1. Nestle Indonesia
To promote the use of Lactogrow, a nutrient supplement powder for toddlers, the multinational CPG company started a loyalty program called the Gro Happy Club, targeted at parents. Through the Grow Happy website, the customers can register and win 250 welcome points. Nestle has enabled online purchases where customers can collect ‘Happy’ points every time they purchase Lactogrow since it’s a frequent purchase by parents. While redeeming their points, customers can choose gifts from a large collection of items including vouchers and toys for children. The website also includes educational and other articles about childcare.
Nestle offers another loyalty program called DANCOW Parenting Rewards. Similar to the Gro Happy Club, the program is built to reward parents who are regular buyers of DANCOW, a milk powder fortified vitamins and minerals for children. Parents can redeem points to get rewards such as home appliances and toys, and even get free pediatrician consultation. Customers can claim points on customer microsite or Whatsapp by submitting codes found in the product.
2. Frisian Flag
Frisian Flag, a legacy dairy brand in Indonesia, hosts several activities that engage customers of all ages. While recipe contests are directed towards adults, the company encourages teenagers and young adults to participate in selfie contests on social media. For younger children, the brand offers e-comic and games based on two beloved characters called Zhuzhu and Zhazha. All these contests and games give customers the opportunities to win rewards and stay connected to the brand.
Frisian Flag also has a loyalty program called ‘Primagro Points Mothers and Toddlers’ that offers points and rewards to mothers buying nutrition and milk products for toddlers. Targeting customers who are keen on buying sustainable products, Frisian Flag provides many articles on their websites describing their pledge towards sustainability. In this portal, the brand transparently shares its processes starting from the grooming of cows up to the production of various dairy products.
While launching their chicken-flavored instant noodles Pop Mie, Indofood had chosen to ride the mobile gaming wave. They launched 2 gamified advertisements that involved short and simple games leading customers to win vouchers to buy the new product. The vouchers were easily redeemable and the game was sharable on social media to expand the engagement to more mobile users.
Indofood has also built a tiered B2B loyalty program called Grow Together that supports SME businesses that are particularly dependent on the brands’ products. The members of this program enjoy exclusive benefits including monthly rewards, health insurance, exclusive promotions and a portal to help them with bank funding. The program also assists the SME partner with halal certification that helps their business grow. The loyalty program named the Grow Together program has three tiers – silver, gold and platinum. Members can also use their Boasari Mitra loyalty cards while shopping for Indofood products.
4. Wardah Beauty
One of the country’s top cosmetic brands, Wardah Beauty encourages the women doing business with the brand to join the Wardah Womenprenuer Community. This B2B loyalty program promises an 18% discount on the highest retail prices on products and free delivery even on minimum purchase. Members can get 1 point for every purchase at IDR 150,000 and 2 points by selling 30 news products. The points can be exchanged for attractive prizes and vouchers. 4 lucky members of the community also stand a chance to win a home appliance or a smartphone through an end-of-year raffle contest.
With almost 85% of Indonesia’s population being Muslim, Wardah is also known to be one of the biggest halal beauty brands in Indonesia. Through its latest marketing campaign ‘Beauty Moves You’, the cosmetics brand has launched a line of products made from sustainable processes. On the D2C front, Wardah has an ecommerce channel where customers can make online orders and receive loyalty points on their transactions. The points can be redeemed in a tender mode on the next transactions.
To strengthen the partnership with more than 400,000 sellers of Coca Colas’s beverages, the CPG giant started a new loyalty app called ‘Klik Toko’. The app enables points’ collection and redemption by B2B partners for distributing Coca-Cola products. The initiative was started to stay in touch with all the distributors, especially during the Covid-19 pandemic. The app gives the partners real-time information and updates from Coca-Cola. The company hopes to introduce newer features on the app to attract more distributors across the country.
Nutricia’s MyNutriclub loyalty program completely focuses on providing a lot of information to parents of young children including immunity, nutrition, growth and development. While enabling points’ redemption for every purchase of Nutrilon, the program also provides other exclusive services for mothers and babies like consultations with experts and access to webinars, podcasts and videos on the early child growth period. The loyalty program portal also offers quizzes to detect the child’s allergies, learning stages, tools like budget calculators and so on to keep customers thoroughly engaged.
Every transaction matters…
We can clearly see how some of the top brands in Indonesia have given importance to customers and partner relationships alike. While digital channels have given brands the opportunity to dive into D2C rewards programs, a fragmented landscape like Indonesia certainly requires companies to nurture their distributors and incentivize them to boost sales growth. In fact, Capillary’s Loyalty+ has been upgraded with additional new features to provide brands more opportunities to reward their partners. Get in touch with our experts to find out more and transform your brand’s digitization journey.
“Without Big Data Analytics, companies are blind and deaf, wandering out onto the web like deer on a freeway.” Geoffrey Moore, organizational theorist.
Imagine the retail world without customer data – shopping aisles would be filled with irrelevant products, and customers could be forever unhappy with their purchases. Just imagining this imperfect world seems like a nightmare to us! In this blog, we’ll fill you in about the various types of data and how we can use the right set of data with respect to privacy.
In recent news, we heard about Google’s plans to phase out third-party cookies by 2023. Google is planning to implement better privacy technology, where internet users’ data would be protected. While tech giants like Google are making this major privacy move, retail brands too must be aware of how to safeguard their customer data and identify appropriate ways to collect information for marketing strategies.
Zero-party, first-party, second-party… What does it all mean?
Understanding the various types of data will help marketers in picking and utilizing the right kind for their brands. Let’s start from the basics and take a look at the data types:
1) Zero-party data or self-reported data: This data is given directly and is proactively shared by the customer for personalization. Coined by Forrester, the term refers to a richer and more specific data set strategically collected. For example, websites can share a survey with the users to procure more personalized information about their products on a particular webpage. Consumers are typically willing to share this information as they too can benefit from this personalization.
2) First-party data: First-party data may be inferred customer data or self-reported. This could typically come from Point of Sales in offline stores, where customers share their name, address, mobile number, etc. Most data that gets collected in the brand’s CRM are classified as first-party data. This information can also be sourced from surveys and regular customer feedback. Of late, first-party data is also being collected from social media accounts through the privacy settings of the platform.
3) Second-party data: Second-party data is another company’s first-party data that can be directly purchased from the source. Typically, it is collected from trusted partners who have agreed to share the data, which might mutually benefit both businesses.
4) Third-party data: This data is any information collected about users that may not be directly related to customers or their transactions. It usually helps to understand the behavior and demographic of customers. But a major disadvantage of third-party data is its statistical and aggregated nature and the fact that it has not been directly received from the user.
Harnessing the data the right way
Now that we know what each terminology means, we can see that first-party data is information that directly comes from the source. The information is more accurate and gives marketers a unique view of their customers. While the Point of Sales is a primary source of first-party data, brands can also get this from, SMS, email, surveys, beacons (location-based), customer service interactions and loyalty programs. But with so many sources how can a company use the data accurately?
This is where a powerful tool like Customer Data Platform (CDP) comes in. CDP helps retailers unify first-party data across every source. The single-point solution gives a 360-degree view of the customer by standardizing data. Through the power of AI, the platform is able to identify and remove duplicate entries and help understand and segment customers based on their behavior and preferences. Through this tool, every single data point is used responsibly, remaining compliant with emerging data protection laws. If your brand is looking for a CDP, you can contact our experts to find out more about it!
Prioritizing consumer privacy through zero-party data
First-party data is certainly readily available to brands. But consumers may not know the extent of how their information is being used, or they may not have fully consented to it. A large gamut of data privacy laws must be considered while collecting customer data, and consent plays an important role in using this type of data. In fact, in a Hubspot survey, 91% of the respondents agreed that ads are more intrusive today than a few years ago, and would prefer brands that were more transparent with their data usage.
While second-party data may come in from trusted sources, once again the consumer is unaware of it being utilized and in what capacity. The information procured through this may not be relevant to the retailer, resulting in the purchased data not being used and adding unnecessary spending. With respect to third-party data, the information is all the more inaccurate and untrustworthy.
This is why we could call zero-party data as the data of the future. As we saw before, zero-party data is information that consumers give willingly to the brand, knowing that it would improve their shopping experience. This data is collected from all interactions done with the customer. Brands must also remember to have an easy opt-out process so that consumers have the freedom to withdraw their consent at any time.
By increasingly relying on zero-party data, not only do retailers achieve the most accurate data but also improve their brand value thanks to their transparent data usage practices.
Loyalty: a gateway to zero-party data
It is a well-known fact that loyalty programs help brands widen their customer base, but it may not be widely known that they also act as a hotbed for zero-party data. Data privacy laws tightening across the world, and it may seem that the scope for acquiring and using customer data is reducing. However, the strongest feature of loyalty programs is their ability to collect specific and consent-driven data from the customers themselves. By creating multiple touchpoints and more opportunities to interact with consumers, loyalty programs become a fitting method of collecting zero-party data, as customers are clearly aware that the information is being used to create better shopping experiences.
One way of acquiring this data is through incentivized quizzes. Customers can willingly share data about themselves and collect rewards and discounts. For example, an apparel retailer could collect details about the customer’s size, height, age and other preferences by offering points. While sharing these details, customers know that the upcoming product suggestions will be customized as per their preferences. Customers are, no doubt, the king. And in an era where data privacy is most important to them, brands must listen to these emerging concerns and find ways to tweak their practices accordingly. There are several strategies that brands can implement to build solid trust with customers in terms of data privacy. Get in touch with our experts today to know more.
In the first part of this two-part blog series, we touched upon why CPG loyalty is important and what are the latest trends to keep in mind for CMOs while executing brand marketing strategy. In this part, we take a deeper look at the challenges that marketers must address while building a loyalty program.
Imagine a customer walking into a grocery store. Their eye catches colorful packaging embossed with not just brand names but offers and prizes.… In this intense battleground, how is your brand going to stand out in the aisle?
CPG loyalty programs: Challenges faced by marketers
One thing that stands out as the biggest hurdle when implementing loyalty programs for CPG brands is that brands in this sector often lack direct relationship with customers. They are mostly reliant on retail stores for inputs. This dependency leads to several challenges. Some of them are stated as below:
- Limited Customer Database: CPG manufacturers have no physical avenue to capture customer information (transaction data) since it is heavily reliant on the Point of Sales (POS) integration. This creates a vacuum between the brand and the customers and limits customer acquisitions and data capture. Capturing data will go a long way for companies to stay consistently relevant to consumers.
- High Marketing Cost: Consumers are regularly bombarded with ads and billboards on a daily basis. While it’s no cakewalk to come up with catchy content, the engagement through these mass campaigns and advertisements is limited, with no personalization. Generic promotions and offers may not be relevant to every customer, leading to low engagement and redemption.
- Quickly evolving customer preferences: Customer preferences change more rapidly in the CPG space than any other industry. Take the apparel industry, for example – fashion trends change quite frequently in a span of just few months. CPGs are typically low cost items with various competition products available in markets. This contributes to low customer retention with the brand, as customers are inclined to make compromises in their purchases if the preferred products are not available.
- Heavy reliance on retailers: Over the decades, there has been massive seismic shifts in the CPG landscape, in terms of advertising and promotion. While manufacturers wielded this power in the 1980s, the power shifted to the retailers in the 1990s, as they had full access to the POS and scan data. In the current scenario, the power lies in the hands of the customers. The consumers’ choices are heavily driven by social media and information. Therefore, it is important for companies the embrace these shifts and let it drive retail strategies.
- Difficulty in predicting profit: Due to the lack of direct communication between brands and customers, it becomes extremely difficult to measure cumulative customer value over time, to increase the customer loyalty necessary to maximize the Customer Lifetime Value.
- The inevitable competition: While competition exists in all sectors, but it is far more intense when compared with other industries, given that CPGs are fast moving products with the risk of customers switching brands at any moment. It’s challenging for companies to break away from this clutter with brands offering same products and prizes.
CPG loyalty program: How to design an effective CPG loyalty program
- Data is the key ingredient: To stand out in the grocery store and build brand loyalty, data becomes the key pillar for engagement strategies. Today’s consumer is constantly researching, shopping, and engaging with brands online, producing new data sets every minute. CPG brands can collect this data, unify data silos across all such touchpoints using platforms and solutions. The unified data should contain omnichannel consumer interaction, data from supply chain, marketing, and secondary research data, resulting in an all-encompassing view of the touchpoints. This holistic customer data management strategy is a prerequisite to build a valuable loyalty program that maintains dialogue between brand and customers, leveraging customer feedback on products and offering discounts to tailor better engagements. This also sets a platform to share information on product benefits and new product launches, apart from hyper-personalizing messages. Brands can also incentivize customers who share personal information in exchange of rewards and an overall transparency from the company, given that consumers have become increasing intentional about the data they share.
- Digital strategy brings customers closer to brands: CPG brands are now looking to stay relevant with the digital transformation, investing in direct-to-consumer models. Brands must then focus on leveraging digital channels for an optimum loyalty program, and cultivate the desirable behavior of purchasing online. Mobile applications and Microsites serve as the primary interface of interaction between brand and customers, thereby reducing reliance on retailers and trade partners. This creates a win-win situation for both consumers and brands – while consumers experience ease-of-use through digital channels, customer acquisition, data and reward redemption can be easily facilitated for brands.
Several large CPG brands have taken their first steps in this digitized journey. For example, Colgate dove in to a digital-first marketing campaign for their new electric brush that is targeting millennial users. Paired with innovative messaging, this push for ecommerce sales has given the company an edge over competitors, and hopes to deepen its bond with consumers.
- Focusing on brand values and ethics: After several months of intense research, Nestle recently launched the vegan KitKat. The company came up with the 100% plant-based alternative to the popular chocolate bar after huge consumer demand. Veganism is just one of the recent trends in the consumer landscape that CPG brands must incorporate in their brands. As we have already seen that 40% of the global consumers are Gen Z, and it has become an important marketing strategy to align products based on their needs. As the newer variants of products get launched, it is paramount to use loyalty programs to boost sales. Consumers can be incentivized to use these new products. Brands can also introduce personalized offers for consumers based on previous purchases and preferences.
Capillary’s pioneer in CPG sales, Kunwar Keshav emphasizes on observing the new generation’s needs, saying: “The era of conscious consumption is here, and the newer generations are watching brands more closely for sustainable packaging and marketing. While these new-age concerns need to translate into the present production strategies, brands can use loyalty programs as a medium to transparently communicate about such process changes and messaging.”
- Incorporate Gamification elements– Gamification is especially useful in increasing customer engagement for CPG brands. Brands can apply games like spin the wheel as a way of unlocking rewards, providing incentives to customers to stick to your brand via awarding of badges and stickers. Gamification can boost non-transactional interactions and drive short-term behavior change like product awareness and trials. When Kellogg’s launched Krave, they hoped to direct the marketing at younger consumers. So, the breakfast cereal company made it a point to launch the product in social media channels for the first time. The brand launched a Facebook treasure hunt game that offered daily prizes and giveaways.
Let’s future-proof your brand with agility…
In a recent Harvard Business Review article, Janet Balis (Partner at EY Consulting) writes 10 sharp marketing truths that emerged after the pandemic. While many of them reiterates the importance of customer-centricity, one of the pointers discusses about how agility has become a marketing approach rather than a technology process. In terms of building CPG loyalty, this requirement to implement agile marketing strategies is an advantage.
The Consumer Packaged Goods (CPG) sector growth soared by almost 5 times in 2020!
However, forecasts also suggest that this growth may slow down, owing to small business competitors. Is a comprehensive loyalty program, an answer to the shifting consumer preferences?
Enter CPG loyalty. A clear path for CPG manufacturers to improve repeat sales and build a strong relation with distributing retailers and customers. This is a two-part blog series where we will unveil the length and breadth of CPG loyalty. Let’s dive into how loyalty programs have in the past and will transform the CPG sector revenue game.
CPG loyalty programs: In retrospect
Little did we know that CPG loyalty programs evolved since 18th century from the simple act of American retailers distributing special copper tokens to regular customers! Let’s take a look at the timeline from the past where retailers promoted repeat sales:
While these loyalty programs hooked customers, CPG brands had no structure behind crafting these programs. CPG marketers then did not have enough customer data to make strategic decisions based on customer preferences. They did not even have access to the point of sales at retail stores. While getting third-party data was an alien term, it did not allow them to build a deeper connection with consumers. But now in today’s digital age, ecommerce and loyalty programs give CPG brands the opportunity to create this direct connect.
The sudden shift of CPG brands towards loyalty programs explained
Post Covid and global economic slowdown, the first instinctive reaction of consumers was to stock groceries and other essential products. Owing to the huge demand, the average basket size went up but many consumer goods brands went off the shelf quickly. During this time, consumers stepped aside and opted for (a) alternatives to try other new brands or (b) purchase economical substitutes due to the reduction in household income caused by the pandemic. This posed a huge opportunity in incentivizing buyers not to shift their loyalty towards a specific brand through offers, discounts and other freebies.
The global CPG consumer profile report suggests that more than 40% of the consumers are from Gen Z, who chose products based on their personal values and interests. While in 2010, the common trend was to save money and opt for cheaper labels, principled values and views are a priority for consumers today. Therefore, CPG brands need to brace themselves to encounter such radical changes in customer behavior, attitude and engagement through loyalty programs.
CPG loyalty programs: How it benefits brands
- When customers enroll into a loyalty program, they also provide credible data on their buying preferences, giving brands an opportunity to understand them better.
- Companies can nudge customers to provide feedback, leading to improvised and relevant products.
- By introducing engaging aspects like gamification plugin in loyalty programs, engagement level with the brand goes up.
CPG loyalty programs: How Capillary benefits CPG brands with loyalty programs
CPG loyalty unfolds into two broader categories – While a business-to-business (B2B) loyalty program strengthens the connect with the retailers, a Direct-to-consumer (D2C) loyalty program would give brands an opportunity to directly reward consumer. At Capillary, loyalty experts ensures a brand’s core objective is considered before designing a CPG loyalty program. Let’s take a look at the two brands that leverage CPG loyalty programs using Loyalty+.
- D2C loyalty Programs
A multinational personal care products manufacturer uses Capillary’s lifecycle marketer, which is an omnichannel campaign manager to capture customer database via multiple channels like the offline stores, ecommerce platform, Facebook etc. and run targeted promotions. The brand now has better visibility, seamless customer journeys and is able to reward them at various touch points in the journey, thereby increasing repeat sales.
- B2B loyalty programs
One of the most-loved app-based loyalty program set up by Jotun in the Middle East does it really right. The multinational chemicals company wanted to enhance their relationship with painters across Middle East, persuading them through rewards to promote Jotun paints. Their loyalty program had achieved almost 50,000 registrations in 2 years, resulting in a conversion of 45% of repeat shoppers thereby building a brand advocacy as well.
CPG loyalty programs: Features
- Gateway to a more data-driven marketing: While CPG manufacturers and retailers have never really collaborated for customer data, challenges posed by Covid had pushed them to mutually exchange data. Even in the absence of the pandemic situation, experts suggest that the manufacturer-retailer collaboration is critical for both day-to-day business and long-term values. A Mckinsey survey, shows that winning CPG companies use databases shared by retailers to analyze the shoppers’ baskets and demographics, leading to focused marketing and rewarding programs. Clearly, big data is enabling CPGs to be more accurate than before, through syncing social and transactional data.
- Connected packaging: Packaging is the one of best ways for CPG brands to reach directly to consumers. Also known as connected packaging, it allows shoppers to point their smartphone at a QR code printed on a package, which acts as an access portal to product information, incentives, and other ways for them to communicate with the brand. With this solution, CPG brands have been seeing higher interactions with customers in categories that are typically considered low-engagement, such as cleaning and laundry products.
- Authenticity over trendiness: Freedom to express, straightforwardness, openness to diversity – these are some words that we can use to describe Generation Z. Their ‘search for truth’ behavior also translates to what they look for in stores. Therefore, Gen Z want all the information they can get about a brand and its image — from product to packaging and marketing. Staying true to the brand’s promises is crucial for marketing campaigns. It could be your brand following sustainable practices or providing health benefits it claims to give. These are the kind of moral values and promises that consumers of today are looking for.
- Social media marketing strategies directed towards Gen Z: Generation Z was also the first one to be born after internet was commercialized, therefore digital experiences are a non-comprisable part of their lives. While social network usage patterns may vary across the world, it is obvious that most consumers are on social media, and frequently use it to find or post reviews about products. Incidentally, CPG products and social media have one thing in common – they are used every day. So it naturally makes sense for brands to promote their marketing campaigns on this medium. Marketing in social media also opens the doors to influencer marketing, another catchy trend among brands. This is a phenomenon where online influencers promote or review products in favor of a brand. In a survey by Influencer Marketing Hub, 90% of the consumers felt that influencer marketing was effective. The industry is expected to grow to up to $13.8 billion in 2021.
CPG loyalty programs: The evolution
The pandemic has stunned the world economies, changing customer behavior and undermining traditional CPG marketing strategies. To push past this struggle to revival and win the competition for customer trust, pivoting to a marketing strategy with a robust loyalty program is the best way forward. In the next part of this blog series, we discuss the different challenges in implementing CPG loyalty and how brands can design their rewards programs agilely, paving the way to tackle any major crisis and achieve long-term success.
While the pandemic has overstayed its welcome by now, the evolving consumer behaviour is here to stay. Breaking free from the work-from-home during the week and compensating for the lost time in shopping malls through revenge shopping, the dynamics is definitely shaking up the sleepy retail markets.
Clearly, the pandemic accelerated the online shopping trend. In India, it is forecasted that the ecommerce market will grow up to 25-30% annually in 5 years to reach up to $140 billion by FY26. In the same report by Bain & Company Inc., it is mentioned that this growth would be especially evident in Tier-2 Indian cities, accounting for four of every five consumers.
Early this year, when Aneesh Reddy (Co-Founder & CEO) conversed with Ashish Dikshit (MD, Aditya Birla Fashion and Retail) of the year 2021; these trends were confirmed. Acknowledging that 2020 is a Black Swan event that brands did not financially or strategically plan for, Mr. Dikshit also shared several tips that would help Indian fashion retailers gear up for what lies ahead. Here are the top 5 picks from their conversation:
1.See ecommerce as an opportunity
Will ecommerce eat up offline retail? Ashish says this is an unavoidable question of the year for all the brands. While the downfall of brick and mortar is pretty steep, there has been a democratic and universal shift to ecommerce. Ecommerce is fundamentally creating a new channel, and instead of seeing the medium as a threat, companies should see it as a way to expand their distribution like they have never done before.
2. Don’t miss the big fat Indian weddings!
Ashish was quite optimistic that the big fat Indian wedding would be back to its glory soon. Weddings are exuberant occasions that play a big role in the Indian fashion industry. With further economic growth in the country, the financial migration of lower income to middle income is coming soon in the next decade. These consumers will move from basic essentials to products and service of expression, marking an exciting time for the retail industry.
3. Watch out for casualization and premiumization in Indian consumer’s wardrobe
Typically, brands start out by producing something that they excel at, and hence customers see the value of the product. But over a period of time, brands have understood that the focus needs to shift from the product to the consumer’s occasions, consumption patterns and habits. Therefore, a whole spectrum of clothing arises – from strict formal, to smart formal. This will move to relaxed formals and to smart casuals, and so on. Brands need to watch out for these changes in how people want to dress. Ashish elaborates this as he says, “In my time, we could go to an evening get-together and an office in the same clothes. This started to change. What you wore to a club, what you wore for lunch on a Sunday, what you wore during an important meeting and what you wore on a regular working day, are all different. As the stratification of occasions and wardrobe started to happen, we also continued to evolve the brand.”
4. Let your innovation run wild while starting up
Start-ups are always known to bring their unique ability to bring technology to the table. Among the various ways that data can be used, start-ups can address the tediously long lead time in the fashion industry while creating new outfits. Ashish echoed this thought, “It takes us 9 months to put out a product that goes through designers, supply chain, sourcing, manufacturing and distribution. And then it takes less than 30 seconds for a person to walk in and say ‘No, I don’t like this collection.” Consumer behaviour definitely rules the market.
5.Hold on to your franchise
Ashish further adds that no businesses can survive, if franchises are not successful. Offline stores are now being used to drive fulfillment and are converted into a place of deeper engagement. For example, stores are connecting with customers on video calls to help them shop remotely. In this new default, we will be seeing a lot of change in engagement metrics, where stores and franchises are trying to differentiate and make a mark in their location. Ashish advises retailers not to let go of franchises as their relationship will help grow the business and open more stores.
The fireside chat has even more insights on how your fashion brand can get retail ready in this changing world, tune in to the full webinar here.