In an increasingly omni-channel world, consumers rely on digital technology to help them make more informed purchase decisions. They expect their favorite brands to follow suit and adopt similar solutions that will deliver a more intimate and engaging shopping experience.
So why aren't we hearing more about how brands leverage mobile technology to deliver high relevance touch-points to consumers at the moment they are most likely receptive? By leveraging smart devices’ integrated geo-location technology, brands and retailers have the ability to offer location-based, relevant push notifications to consumers. For the consumer, it’s as simple as using a brand’s app, a social or utility app, agreeing to share their location with the app and consenting to receive push notifications.
New data coming out of LoyaltyOne and CMA might help nudge marketers toward a beacon test. The research shows that consumers are ready to use beacon technology and understand the benefits. Of those surveyed, 56% said they had used the technology and 60% said they are more likely to engage with a retailer's location-based service app if they can set timing preferences on when notifications are sent.
A few additional highlights from the research:
- 86% of consumers are aware of beacons (91% for millennials and gen x-ers)
- Consumers realize the benefits of beacon technology, and say the top benefit is receiving rewards relevant to their location (62%) followed by receiving alerts (56%)
- 45% of mobile users that have used a device in-store said it has led them to make an immediate purchase.
Beacons and location-based services offer an opportunity for businesses looking to take their mobile messaging strategy to the next level. From a marketing perspective, it’s about talking to your customers at the right time, place, and medium.
Here are a number of examples of beacon applications from around the world, in use or planning to be piloted -- as noted on the ibeacons blog. They run the gamut of advertising, entertainment, utility, and value-added services.
- Black taxis in London, Edinburgh and other U.K cities are going to use beacons to send messages to passengers as they travel.
- There’s a tour app used at Tokyo’s Observatory Tower that explains and provides more information about the views, translated in four languages.
- Hong Kong’s International airport is testing beacons, offering interactive maps to guide passengers through the airport, including info on nearby shops and restaurants.
- The retailer Carrefour launched beacons in Tunisia which welcomes shoppers and suggests products based on the user, and display coupons -- reportedly it is going to be available in Romania next.
- Target is launching beacons in 50 stores in the U.S. – a maximum of two push notifications for deals per visit will be sent to a consumer.
And here in Canada:
- One of AIR MILES' partners launched a new program that uses in-store beacons to send its members exclusive mobile offers, allowing them to collect extra points on products at select locations in Toronto.
- Party goers at the Maple Leafs team’s draft party in June with the Leaf app received special offers, were able to win prizes and interact with activities happening at the event.
- Marketing reported in August 2014 that HBC was implementing beacons in five of its Canadian stores to shoppers that have downloaded the HBC gift registry app. An article from the Retail Council of Canada points to a broader implementation throughout the stores more recently.
Retailers that are bold enough to embrace new technologies, especially those that can merge customer data with emerging digital customer-facing solutions, will create relevant, customer-centric connections with their target audience. To learn more about using digital solutions to enhance your customer experience, view the full report here.
Earlier this year, Lidl quietly launched a new promotional loyalty card within Scotland. Shoppers are encouraged to sign up for the new “Smarter Shopping” loyalty card to “Knock pounds off your big shop, again, and again, and again.” This effort comes on the heels of Lidl taking out a full-page advertisement last October to highlight the complexities of Morrison’s price-matching loyalty program, “Match & More.”
Shopper loyalty continues to be a hot topic for grocers in today’s competitive marketplace. Now even hard discounters who previously shunned loyalty programs are investigating loyalty programs as a competitive means to better satisfy customer needs.
What is worrisome is that a Lidl spokesperson outlined that there will be “no data collection” from the program. The retailer has a great opportunity to use the Smarter Shopping card to better identify individual customers, understand their needs and make better decisions across marketing and merchandising. By using the data, Lidl could generate a much stronger return on their investment in the program.
A few American grocery retailers like Albertsons, Jewel-Osco, Pathmark and others recently discontinued their frequent shopper loyalty programs. Their decision to do so reflects a common issue in industry among retailers: failing to optimize program data to better understand and satisfy shopper needs across the organization. By only using the data from a loyalty card to drive the loyalty program, the program’s ability to deliver a strong ROI is greatly impacted as the data is only used in one single decision-making area of the company.
Loyalty programs house customer data that can fuel multiple key decisions across a retail organization that drive significant customer, competitive and financial value. From a strategic perspective, analysis of this data enables a retailer to understand where are the largest opportunities to grow the business from a category, customer and store perspective — this allows the retailer to allocate resources to pursue and capture the largest strategic growth opportunities.
From a merchandising perspective, the retailer can align their price, promotion and assortment decisions with the greatest needs of their most loyal customers. Using the shopper data, retailers can make price reduction decisions on the items that are most important to their most loyal customers; design, deploy and allocate trade funds to promotions that are most valued by loyal customers; and ensure that low productivity items in the assortment can be safely removed by determining if an item is, or is not, important to loyal customers.
Some leading retailers are doing a good job of using the loyalty data to drive targeted customer marketing campaigns, but for many others the data is not systematically used and, as a result, marketing communications are not personalized to the unique needs of the individual shopper. In addition, there are very few retailers who are successfully and consistently leveraging their loyalty data into the price, promotion and assortment decisions made on a daily basis by the merchandising team.
When retailers do take a customer-centric approach by using shopper data across pricing, promotions, assortment and marketing, we consistently see measurable improvements of a 1%-4% increase in overall sales and a 4%-7% increase in gross profits. For a $2-billion retailer this can equate to an additional $80 million in sales per year and an additional $30 million in gross profits.
A well designed loyalty program that consistently uses customer data to drive price, promotion, assortment and personalized marketing actions positions retailers to understand and best satisfy the needs of customers. This in turn gives retailers the best chance to compete in a sustainable manner over the long-term. Loyalty programs provide the foundation for true customer-centric retailing that lead to increased numbers of loyal customers and increased spend per customer. Lidl’s new program, if optimized correctly, has the potential to create a personalized touch point with the customer, allowing them to differentiate themselves from their competitors. In the end, there is no better path to future success.
It wasn’t long ago that retail experts feared the expansion of supermarkets and hypermarkets around the world would eventually lead to the demise of small independent local stores and local famers’ markets.
But today local stores and farmers’ markets are thriving—both in developed and emerging markets. It is the multinational grocery retailers that, while continuing to be successful in developed countries, are experiencing difficulty gaining market share in developing markets.
A recent report from McKinsey, “Modern grocery and the emerging-market consumer: A complicated courtship” highlights the shortcomings of multinational grocers, from gaps in supply and demand chains to how public policy can prevent these grocers from expanding in these markets.
While the report offers seven highly valid strategies to successfully enter emerging markets, it doesn’t touch on the crucial role data can play in driving business in these markets. In my mind, that’s a big miss.
While these strategies will certainly help, to be truly successful you need to understand your customers, what they like, what they don’t and how they shop. There are many notable expansions into Canada by U.S.-based and global players that have had different outcome; some still unfolding, that underscore the upside and downside opportunities.
Without question, customer data, such as the data harnessed within a loyalty program, can help to identify marketing, merchandising and store operations development opportunities in emerging markets. Upon entering into a new market, collecting customer data would allow retailers to better do the following:
Build in-market sensibility: New research from Precima revealed the majority Canadians shoppers want to purchase locally produced products and many are even willing to pay more for it. Similarly, The McKinsey study found that consumers in emerging markets are even more entrenched in this trend since they cook and prepare their meals more often than consumers in developed countries.
The key here though is not just isolating the opportunity around ‘local fare’, while it’s an important trend in and of itself; it is more about knowing the habits and behaviours of your consumers in different markets including where there are price sensitivities and margins to be had. Large chain supermarkets and hypermarkets are significantly underleveraging opportunities if analytics are not being used to develop a profile of their local consumer to better understand their shopping habits so they can truly meet their needs.
Recognize: Customer data gives you the opportunity to recognize your best customers every time they enter your store. Recognition can be as simple as knowing their name and greeting them in the store. Some coffee retailers with repeat customers are incredibly astute at this. As customers give you more business they will expect you’ll go the extra mile.
It is important that you understand your consumer and their everyday shopping habits so you can recognize them in a way that fits with their cultures and values, and in some ways, just makes shopping with you that much more “personal”.
Reward: Just because something works well in a developed market, doesn’t mean it is a fit for consumers in emerging markets. This is where the value of a loyalty program comes in. Loyalty programs give you access to new customer data so that you can devise a “locally relevant” rewards, it may be a product, it may be a service, it may be something entirely different that is culturally relevant that may be unique to that market; by using data to mine and leverage this data you can create a rewards offer that makes your customers truly loyal and ambassadors that not only shop your store, but motivates others to do so as well. What start up can afford to forego that level of amplification?
Delivering retail performance can take a small army of retail specialists in marketing, merchandising, operations, supply chain, employee training and countless other retail activities. Assembling all this talent in a new market can be challenging. But when it comes to understanding shoppers within these markets, data plays a crucial role in giving multinational grocers the deep customer insights required to provide the right mixture of rewards and recognitions that will ultimately lead to customer loyalty.