Loyalty in retail

Today there are almost no stores left that don't give customers discounts or gifts and don't use a loyalty system in their work. All these actions make the bond with shoppers stronger and motivate them to come back to certain stores. It's important to know that a loyalty system is not just discounts, points and promotions. It's a big job with a full launch of new business processes.

In our new article, we'll explain why retail needs a loyalty system, what it consists of, and how to implement it fully in your business.

If we look at the statistics of different studies, we can see that shoppers have a few main reasons to come back to your store.

Customers choose a store based on these factors:

1. Discounts and a loyalty program;
2. A convenient store location;
3. A strong brand of the store chain;
4. A wide range of products;
5. The option to pay by bank card

If these factors work together, the customer will come back to you. And 80% of shoppers who visited you again become regular customers over time. That's why it's so important to keep all the factors in mind and work on them. The loyalty program is no exception.

Implementing a loyalty system in retail is a task that first of all solves the problem of no repeat purchases. To create the right motivation for shoppers, you need to collect good information about them and build a picture of your target audience. Today you can automate data collection. For example, at Loona.ai, data is collected automatically when customers sign up and then appears in the store's admin portal. There, the store's marketers can see how often each customer visits your store, what they buy most often, and what their average check is. All this data will help with the next step - analyzing the information you collected.

Data analysis helps you understand your target customer and change your offer at the right moment, and sometimes your positioning too. During the analysis, you also segment the customer base. Later, this helps you send unique campaigns to each customer and get better results from your promotions.

The simplest segmentation is splitting by gender. With this in mind, you can later set up campaigns for certain holidays just for women or just for men, and so on.

At the first stage of building a loyalty system for your store, you need to choose the type of loyalty (points or discounts), and maybe also choose which products will give benefits to regular shoppers.

Some of the most popular loyalty program mechanics are: a discount with a regular customer card on certain product categories; a points system (points are added to the card for a purchase over a certain amount), and points can be used to pay for part of the next purchases; a discount on the whole product range; stamp cards: the shopper collects a certain number of stickers or coupons to get a gift or a bigger discount on a specific product.

If you decide that cardholders will get a discount or points only on a certain product category, choose this category carefully. When you make a rough list, look at profitability, demand for the product, how much of it is in stock, and other factors. You can change these categories over time. For example, in summer, give discounts on summer items, and in another season, remove these discounts and set them up for a new category.

One more important point you shouldn't miss is deciding who can get a loyalty card. There are several ways to do this. Anyone can download the card; customers get the card when they buy above a certain amount; cards go only to regular customers who have spent a lot; or the seller decides who gets a card.

When you choose how to give out cards, remember that a loyalty program is an important way to stand out from competitors. So it pays off if more people get cards. Then more shoppers will be highly loyal to your store.

The next steps of implementing a digital loyalty system are done by companies that specialize in this field. We are one of these companies - the team behind Loona.ai.