The loyalty landscape in Malaysia is not what it was a year ago.
There have been multiple factors impacting customer priorities. For one, the economic impacts of COVID have been significant, with the unemployment rate spiking to a 30-year high of 5% in July 2020, and GDP contracting to -17% for Q2 2020. Secondly, the Malaysian government, as a measure to prevent the spread of COVID, has implemented the Movement Control Order from 18 March 2020 to 31 December 2020, resulting in a ‘homebody economy’. Apart from these reasons, there has been rapid adoption of technology within the populace – the number of Malaysians who are internet users and smartphone owners has risen from 25% and 1% in 2010 to 80% and 84% in 2019—notably altering customer spending and brand loyalty.
The Evolving Loyalty Landscape in Malaysia
Malaysian retail markets have traditionally been reliant on promotions—42% of sales in 2019 were a result of a price discount, and 75% of shoppers in 2020 try to take advantage of special offers and deals (Nielsen Shopper Trends Report 2020). However, this does not mean brands in Malaysia should always use discounts and promotions to strengthen sales. Some categories perform well organically and should not rely heavily on discounts to experience an uplift.
Malaysia remains a vibrant mix of ancient cultures along with modern influences—a reality that is reflected in hawker stalls and bustling traditional markets, situated in the same vicinity as glittering mega-sized shopping malls—but Malaysia’s customers have evolved to be tech-savvy, and now use every option available to them at their fingertips; the smartphone penetration today is recorded to be nearly 90%. Today the majority of Malaysians, 81%, consume a combination of both traditional and digital media, while only 19% of Malaysians solely consume traditional media. The expanding internet coverage, technological advancements, and choices of media formats have created new opportunities for consumer experience; opportunities that move beyond traditional loyalty programs. We’ve covered this extensively on Ecommerce Trends in Malaysia.
Top loyalty programs in Malaysia
How do brands and loyalty programs in Malaysia successfully transform the occasional customer into brand loyalists? Below, we peek into the inner workings of some of Malaysia’s top loyalty programs.
Bata, a brand whose mission statement is “to shoe mankind”, is walking the extra mile to reassure customers during COVID. They recently launched a welcome back campaign to advertise the measures they are taking to keep stores in Malaysia safe, like sanitizing shoes before and after trials, temperature checks, mandating masks, and ensuring a socially-distanced shopping experience.
Bata Club is their card-less rewards program, exclusive to Malaysia, that rewards shoppers for their purchases with Bata, with an online microsite enabling customers to log in and view their loyalty status in real-time. Customers can redeem points for e-vouchers and are able to enroll for a lifetime membership when they spend more than RM 50. They get a sign-up voucher of 10 RM and a birthday e-voucher of RM 15.
Bata Malaysia also uses real-time points and an e-vouchering mechanism called Dynamic Voucher System (or DVS) to send relevant offers to customers based on their current purchase, incentivizing their next visit through personalized targeting.
- Customers can redeem 150 points for a RM 5 voucher. Customers periodically receive a newsletter with the latest promotions, and personalized offers based on their recent purchasing behavior.
- With the exponential increase in digital adoption, one-to-one contextual messaging has become a key differentiator for customers who have become inundated with brand messages and notifications.
*Capillary is proud to partner with Bata for this initiative
AEON MEMBER Card
AEON group had its humble beginnings in Japan as a Kimono fabric seller in 1758, but today stands as one of the largest retailers in Asia. Over the last few decades, the AEON group has made multiple strategic business decisions, including mergers and acquisitions, that have made it a colossal conglomerate in Asian markets, owning and operating convenience stores like “Ministop”, supermarkets, shopping malls, specialty stores, and AEON Retail Stores.
To increase their loyal customers and repeat sales, they’ve introduced prepaid cards in Malaysia, such as the AEON member card, which customers can use for discounts and collecting points at AEON stores and Pasar Raya MaxValu stores.
Additionally, in a bid to embrace digital transformation, AEON has introduced the Wallet app that allows members to go cardless; they can earn, view, and redeem their points in real-time, with state-of-the-art security measures including biometric login, multi-factor authentication, anti-phishing features, and more.
- AEON’s Member Card is a popular points-based rewards card where customers can acquire one point for every RM 1 spent, and double the points when they upgrade to a Member Plus card.
- Many members claim to sign-up for ‘member day’ discounts, which incentivize them to make purchases on specific days and take advantage of limited-period hefty discounts. AEON members receive rebates worth 5% or 3% every time they shop at an AEON General Merchandise Store (GMS)
- The AEON Wallet App is a convenient way for members to access their exclusive benefits right on their phone. The app keeps customers up-to-date with AEON Group promotions, either through in-app promotion banners or push-notifications.
Caring Pharmacy owns 138 pharmacies across Malaysia and provides 12-hours-a-day, 7-days-a-week full-time pharmacist service. Caring Pharmacy drives loyalty engagement with the Shopper Loyalty Program. Starting from January 2019, the Shopper Loyalty Program has been digitally accessible via Caring Pharmacy’s website and mobile app, and have seen more than 300,000 members sign up to be a member.
Simplicity is key when it comes to Caring Pharmacy’s loyalty program. The app allows easy barcode-based scanning for loyalty points. A rolling banner at the top of the homepage allows users to flip through popular vouchers, discounts, workshops, contests, articles, and more. Prominent banners on the homepage promote easy navigation to all active events, promotions, the member’s profile, and health information being offered by Caring Pharmacy. Members enjoy benefits such as birthday treats, get insights into exclusive promotions, discounts, and #IlikeCaring member points and rewards.
- Customers tend to reward companies that create an easy experience for them while giving them exactly what they’re looking for. This is the secret sauce to Caring Pharmacy’s loyalty program
- With the loyalty app, Caring Pharmacy creates a seamless O2O loyalty experience for members. The brand elevates the overall Customer Experience with personalized engagement and offers based on the customer’s preferences and transactions.
*Capillary is proud to partner with Caring Pharmacy for this initiative
Watsons VIP Card
The Watsons VIP card not only confers members the benefits of earning 5X more points on their purchases, but it also comes with Touch ‘n Go functionality (a huge perk when ‘contactless’ commerce is the order of the day).
Customers can redeem points for items on offer, or be eligible for seasonal discounts on a wide range of products. One of the more sought after features is that the VIP Card comes with dining privileges where members can get discounts at selected restaurants, with a vast array of restaurants to choose from. Watsons’ members are offered discounts, as well as complimentary dishes. Apart from rewards and discounts, Watsons offer members a range of helpful and personalized content around wellness, chronic disease, calorie counter, skincare, make-up, and more.
- The brand offers a great group loyalty experience for its customers by partnering with other brands to offer exclusive discounts for members. Participating merchants include San Francisco Coffee, Crab Factory, and Milkcow, to name a few.
- The promotions and offers have an expiry date, so members are encouraged to redeem often, thereby increasing program engagement.
- Members earn one point for every RM 1 spent, and 2x points on Watsons products and 5x points during birthday month
Petron Miles Card
Petron’s MILES cards are more than a loyalty program for fuel, they come with unique privileges for members. Apart from allowing members to earn limitless points at over 600 Petron Service Stations in Malaysia, members can also earn points when they renew car insurance with AIG, Malaysian Airlines’ Enrich Programme, PLUS Expressways’ PLUSMiles Card, and AirAsia.
Points can be redeemed for fuel and convenience store purchases, and members receive special deals and discounts at Petron’s partners. A key highlight of this card and the points is that there is no expiry date, which gives member’s the benefit of collecting and storing points for as long as they want.
- Flexibility and no expiry: Limitless Points at over 600 Petron Service Stations in Malaysia, and point-redemption on various services, from fuel to air miles
- Fast and easy activation through SMS or website at https://www.petronmiles.com.my/
- With the Petron Miles ‘Value card’, members are entitled to 24-hour Towing and Roadside Trouble Assistance, and Year-round Personal Accident Insurance and Medical Reimbursement
Digital transformation has accelerated faster than expected since the arrival of COVID-19, and virtual engagement will need to be a substantial new focus area for customer loyalty programs. Consumers are increasingly valuing connections with brands that are reliable through periods of disruption, that strive to know them as individuals and personalize engagement with them, and offer them an omnichannel shopping experience.
As customer priorities shift, it is more important than ever for brands to leverage strong customer analytics, adaptable to dynamic factors. The necessity, however, is that brands need to complement customer analytics with actions to better engage customers and make smarter business decisions. Brands heeding customer priorities will continue to lead.