As retailers fight for market share in a landscape characterised by intense competition, regulatory changes, new entrants and the continued encroachment of e-commerce giants like Amazon, they need to ensure the tools they have at their disposal are as effective as possible.
One such tool is the trusted loyalty scheme, designed to reward the most loyal of customers with discounts, offers and other enticing incentives and experiences. Importantly, they also allow the retailers who run them to gain invaluable insights into customer behaviours and habits.
However, here at Ecrebo we wanted to delve deeper into the opinions of retailers surrounding loyalty schemes. How successful are they according to the retailers behind them? Are they really delivering the return on investment they’re looking for? And are they meeting the expectations of the shoppers themselves?
With this in mind, we commissioned research on the UK retail market, surveying more than 100 senior decision-makers in the industry — and the findings are fascinating.
First and foremost, retailers cited numerous factors as barriers to the successful implementation of loyalty schemes. We found that 52% of respondents said that the willingness of customers to enrol was an obstacle, followed by the difficulty of integration with existing IT systems (36%), and lack of buy-in from senior management (31%).
However, if implemented successfully, 44% of retailers saw significant potential to use loyalty schemes as a means of driving personalised communications and offers to customers. We also uncovered that retailers encountered challenges when it came to enabling effective personalisation, which include not having the right technology in place (34%), and not having access to the right data (38%).
With the shadow of GDPR enforcement looming large over the heads of all organisations, retailers need to ensure their loyalty schemes are compliant with this new regulation, but it’s an issue that many still have concerns around. Of those surveyed, only 41% said they were ready to meet the compliance deadline, while a further 44% say they were still working on it and, worryingly, 13% didn’t understand how it will impact them.
Despite this, retailers were optimistic as to what the future of loyalty might look like, although surprisingly, we saw some contradictory viewpoints. According to 44% of respondents, next-generation loyalty schemes will use fewer plastic cards, while 41% thought the industry will take advantage of more rewards-based schemes. Additionally, 34% expected to see more points-based systems. These differing opinions provide an indicator that, while loyalty will continue to be important moving forward, the format of the schemes themselves is likely to vary from one retailer to the next.
These are just a select few of the insights uncovered by our research, which provides an exclusive view of today’s retail loyalty landscape. To see the rest of our findings, be sure to download the full report on our website.