June 24, 2022
Retail Growth

The Importance of an Integrated Loyalty Program

Sean Turner

With no signs of inflation or gas prices decreasing anytime soon, consumers have tightened their belts and are looking to maximize savings. Loyalty programs are invaluable for retailers, whether their goals are to lower expenses, increase profits, or improve customer experience and brand reputation.

The best loyalty programs not only offer savings but encourage shoppers to engage digitally and in-store. Through personalized recommendations, suggestions, offers, and rewards, retailers can build a loyal customer base that withstands market fluctuations and economic hardship. 

Connecting a retail loyalty program to an e-commerce platform and retail mobile application that can be accessed in-store is the only way to drive in-store traffic, increase basket size and customer lifetime value, and nurture true loyalty.

How Integrated Retail Loyalty Programs Work

Loyalty “King,” Amazon, disrupted retail with its sleek, consumer-friendly shopping experience that uniquely connected web and mobile experiences through a common login. The company’s two-day shipping, inventory efficiency, enhanced product search, and personalized shopping experience captured nearly 100 million loyal Prime Member subscribers by 2017. Financial Analyst Jim Cramer likened Amazon to “the death star” for brick-and-mortar retail. 

Despite the fact that most shoppers actually preferred the in-store experience — retailers were slow to change their ways, adapt to evolving consumer demands, and counter with their own mobile loyalty programs. As recently as five years ago, only 1 in 10 retailers offered a mobile app with robust in-store features, even though studies show omnichannel customers are the most loyal and spend the most money. 

Integrated mobile loyalty apps work to create loyalty by combining e-commerce, advertising, inventory management, and rewards programs all in one powerful, portable customer channel. Modern shoppers rely on their mobile devices as the primary lifeline between digital and in-store experiences—logging in to access their shopping lists, in-store inventory and product descriptions, digital coupons, and loyalty program information. When tied to a retail loyalty program, mobile drives store traffic through personalized offers and deals, while enabling customers to easily track their purchases and rewards from the palm of their hand. A connected digital-to-store experience provides one continuous omnichannel journey as shoppers transition from one device to another, and from online to offline and back again. 

Integrating Loyalty Programs with Mobile = Big Results

Rarely do consumers shop online only (7%) or in-store only (20%); Harvard Business Review reports that around 73% of customers prefer shopping through multiple channels — or what marketers refer to as “omnichannel.” The ability to begin researching online and effortlessly complete a purchase offline (or vice versa) is a common expectation that has led 90% of business leaders to prioritize a “seamless omnichannel strategy” as a crucial component to their operations. 

Research confirms that loyal omnichannel customers do the following:

  • Shop more - cross-channel strategies generate 80% more incremental visits.
  • Spend more - omnichannel consumers spend 10% more online and 4% more in-store.
  • Deliver more - the omnichannel shopper is worth 30% in lifetime value.

Results are tangible for companies who integrate their channels into a cohesive experience; businesses who see omnichannel engagement have a 9.5% year-over-year increase in profits, compared to 3.4% increase for companies who lack such an experience. Better still, they spend 7.3% less in cost per contact.

In order to adapt, brick-and-mortar retailers are making big investments in digital, specifically mobile technology: 

  • Convenience store Kwik Trip recently launched carryout, curbside pickup, and delivery services through their rewards app. 
  • Dollar General’s retail app has picked up over 4 million active users who clip digital coupons, explore the weekly circular, pre-shop, and buy online. 
  • After 90% of surveyed customers said they’d be interested in joining a tiered loyalty program, Saks Off Fifth now rewards shoppers who spend more than $299/year online, in-app, or in-store. 

These are just a few of the many innovators who are integrating their retail loyalty programs across channels to reward shoppers with a frictionless experience. A Clarus Commerce survey affirmed the popularity of loyalty programs — even premium loyalty programs to which 78% of consumers surveyed belonged. They also found 65% of those surveyed expressed interest in engaging with brands and unlocking exclusive offers through the metaverse — positioning social as the next frontier in loyalty program integration

The Future of Retail Loyalty Programs

These days, who doesn’t love curbside pickup, same-day delivery, in-app shopping lists, and digital coupons? Modern-day conveniences arose from pandemic necessity yet remain popular — especially in grocery. However, the reality is that retailers — big and small — could have offered these services a decade ago. There was simply no impetus for innovating the customer experience; having a loyalty program was enough differentiation. Now that loyalty programs are ubiquitous — more than 90% of companies have one — retailers have to do more to compete. 

It might surprise you to learn that loyalty programs are not performing as well as they could, according to Accenture, which recently found 71% of consumers believe “most loyalty programs do not engender loyalty” and 77% say they “retract their loyalty more quickly now” than they did three years ago.

Today’s shoppers expect more than a plastic card and colorful brochure. They want a seamless omnichannel experience that goes the extra mile, catering to their preferences and delivering convenience to make shopping easier. In other words, it’s time to embrace innovation and evolve.

Many retailers find themselves at a critical juncture whether to chart new territory by investing in new retail mobile application tools for a more customer-centric omnichannel experience or whether to continue trying to inefficiently run two separate silos for brick-and-mortar and digital because it’s the worn, familiar path. 

It’s worth noting that study after study confirms a consumer preference for in-store shopping, so retailers that leverage their physical channel as a competitive advantage can hold their own against e-commerce players. 

The Pandemic will forever be viewed as an event that dramatically changes retail and consumer shopping behavior. Likewise, analysts will undoubtedly look back on this era of brick-and-mortar innovation as a long overdue leap forward in customer experience and loyalty. 

Innovate With a Mobile Loyalty Program 

The shopping journey is modernizing. A consumer may start pre-planning a trip using mobile checklists, browsing online recipes and digital store circulars. In-store, the shopper may hop on mobile to browse product information or order out-of-stock items. The ability to connect with shoppers in-aisle — when they are moments from making their purchases — offers tremendous opportunity for retailers and their CPG brand partners. CPG brands often run their own mobile loyalty programs, which can be combined with the retailer’s loyalty program for bonus rewards based on how much an advertiser is willing to spend on retail media placement. Loyalty programs hit the customer’s sweet spot for convenience, value, and personalization.  

Tying loyalty programs all together offers consumers the ultimate experience—not just in savings, but in the ability to consolidate online and in-store data to market on a highly individualized level. Though 1 in 4 marketers say personalization is important, only 30.3% of companies with loyalty programs currently offer personalized reward offers tailored to their customers’ shopping habits — likely due to a lack of integration between first-party in-store data and their digital assets. So there is plenty of loyalty to capture for retailers willing to invest in seamless omnichannel integration technology now. Through a mobile customer loyalty program, retailers are positioned to reduce marketing spend, increase profits, and grow sustainably for years to come. 

Contact Swiftly to develop a seamless retail loyalty program and e-commerce platform that’s accessible to your customers, whether they’re shopping online, offline, or both.