How Retail Loyalty Programs Drive Profitability
It’s no secret that profit margins have decreased at brick-and-mortar businesses as online shopping has gained momentum in recent years. On average, this margin falls between .5 and 4.5%.
With margin pressures likely to continue to increase, retailers need to be strategic and innovative about how they drive engagement, increase revenue, and above all foster long-term loyalty.
In this blog, we discuss how understanding customer shopping behavior allows retailers to deepen their relationships with customers and unlock new streams of revenue. The key? Delivering valuable rewards that keep customers coming back time and time again.
Today’s Consumers Expect Personalization
Now more than ever, customer loyalty begins with retail personalization. According to a survey from Mckinsey, 80% of consumers are more likely to make a purchase when brands offer personalized experiences. Better yet—personalization translates to a 5-15% increase in revenue and 10-30% increase in efficiency for market spending.
Retail loyalty programs like Swiftly’s are able to deliver this personalization by leveraging first-party data to make relevant product suggestions, offer desirable deals, and deliver informative content about upcoming savings.
One way retailers do this is with sponsored challenges that allow users to track progress towards an end goal, like total spend, frequency, quantity, or basket size. When a challenge is completed, a robust sponsored reward is issued to the shopper.
For example, a shopper with a sweet tooth who buys marshmallows on a weekly basis may see a sponsored challenge like: “Save $5 when you buy our brand of graham crackers, marshmallows, and chocolate together.” This challenge encourages them to increase their basket size by offering a promotion on a product they already buy.
The Payoff Of Personalized Rewards
By leveraging shoppers’ past behaviors, retailers are able to surface targeted challenges that not only develop a new revenue stream—but a stronger shopper-retailer relationship. Sponsored challenges allow retailers to deliver valuable rewards that meet the unique needs of their most loyal customers.
These challenges also encourage new purchase habits for shoppers, improving cross-category awareness in the process. As a retailer, this means you’re giving shoppers what they want while encouraging them to try new products, explore new categories, and increase their basket size.
Launch a Successful Loyalty Program with Swiftly
With a Swiftly-powered digital retail platform, an effective loyalty program that leverages sponsored challenges is not only possible—it’s seamless.
With support from an innovative analytics tool like Swiftly’s, retailers gain access to an omnichannel view of customers’ shopping habits—and make strategic, data-driven decisions that lead to increased loyalty, growth, and revenue.
Embracing retail technology innovation is your secret weapon to drive loyalty and encourage repeat business. Contact Swiftly to get started.