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Could loyalty scheme data be the secret to omnichannel success?

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Our recent State of Omnichannel 2023 report—The devil’s in the retail—found all retailers have much further to go when it comes to omnichannel. We partnered with YouGov to survey over 2000 UK shoppers and found just 37% of UK customers believe retailers are doing a good job at connecting in-store and online experiences.

Creating joined-up experiences requires a deep understanding of both customer needs and data, but the rewards of getting them right are huge. Our survey discovered that 66% of consumers have spent more time and/or money than intended in a retail store that gave them an immersive experience.

What’s the answer? How can retailers join the dots to deliver the multilayered digital and physical experiences that retail consumers love? The answer to this very modern question may start with a traditional marketing tool—the loyalty scheme. Our report found that a huge 88% of British shoppers are already part of a loyalty scheme, with many having multiple cards or apps —18% have five or more. But these schemes must offer more than somewhere to access receipts or provide irregular, low-value, one-size-fits-all offers. Retailers must optimize loyalty schemes to harness the behavioral and consumer insights and data they contain. Those who use loyalty app data effectively are likely to build deeply connected, personalized consumer experiences that empower them to bring omnichannel to life.

Our omnichannel research highlights the value of loyalty schemes and offers unique insights into the ways they can drive omnichannel success. Below we dive deeper into some of these findings and what they mean for retailers today.

Offer a fair value exchange

Customers understand the value of their data better than ever before, and they want real value in return for providing it. An online space to store receipts or points that slowly accumulate to deliver little real-life value isn’t enough. Although 53% of the consumers we surveyed are happy with the loyalty scheme, a quarter feel the value they get doesn’t reflect what their personal data is worth, and 17.5% say the offers they receive aren’t personalized enough.

“The relationship between shoppers and retailers has transformed. Loyalty is no longer about rewards programs and discounts; it’s about building relationships that reflect real-world needs and individual wants. The key to this very human desire for connection lies in data.” Mark Collin and Nathan Ley, Thread 6

Data should not only be stored securely and used ethically as standard, it must be harnessed thoughtfully to link in-store and online experiences. Perhaps an in-store purchase triggers an online discount or online browsing drives an app notification in-store to draw attention to a relevant discount or offers. A great loyalty app should provide a seamless transition between physical and digital experiences.

Build connections through loyalty apps

Loyalty apps are the single most popular way that consumers interact with loyalty schemes. 56% of shoppers in our omnichannel research told us that apps are how they access loyalty programs, followed by websites (27%) and posts/emails (23%). This means that apps must be a key area of focus for retailers and this is particularly true for those focused on younger shoppers—66% of 10 to 45-year-olds primarily access loyalty programs through an app. Retailers who don’t have an app are missing out on a significant opportunity and are unlikely to build true multichannel experiences. 

Nike is an example of a brand that uses loyalty app data to inform exceptional physical store experiences. They use information from across their apps to influence everything from where a store is located to the products they sell to delivering personalized sizing recommendations both inside the app and at brick-and-mortar locations. In a recent interview with the Wall Street Journal, Heidi O’Neil—President of Nike Direct—explained, "What's important from a Nike shopping experience is that with machine learning and AI, we're able to have every digital experience at Nike be unique and personal."
 

Understand what customers want from connected experiences

It’s not enough to deliver connected experiences where customers' in-app or online experience links to their in-store ones. The connections have to be made in ways that meet shoppers’ wants and needs. When we asked UK consumers about the element of their online shopping experience they would like to see in a physical store, discounts came out on top (54%), followed by home delivery (46%), and price comparisons to other brands and retailers (34%). 

The road to omnichannel isn’t easy or comfortable. We know many retailers struggle to create a single source of truth for customers. Frustrations around siloed data and the lack of connectivity are common, and it can be difficult in an enterprise organisation to bring different strands of consumer data together meaningfully. But retailers can’t afford to stick their heads in the sand. The painful reality is that getting omnichannel wrong comes with serious consequences. Customers are ready to walk after a bad experience—44% of consumers in our global survey have been so frustrated by a retailer’s digital channels that they decided to stop shopping with them.

“It’s all about transparency and trust,” says Matthew Hildon, Retail & Travel Portfolio Director, Kin + Carta, in our latest Thread magazine. One way to win customers over could be, instead of asking for pages of information upfront for someone to join a loyalty program, start with the basics: a username. Every additional request for data would be accompanied by an explanation of how that data would be used to benefit the consumer. 

We help some of the world’s most pioneering retailers to build more compelling and intelligent retail experiences. Kin + Carta’s strategy workshop is designed to meet the unique needs of stakeholders, and identify key starting points for your journey. 

Connect with our retail strategy team to find out more: hello@kinandcarta.com
 

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