Guest Article: The Year of Loyalty Convergence

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By: RickFerguson |

Posted on February 12, 2016

Loyalty programmes will evolve in 2016 as brands continue to pursue higher levels of engagement. In this guest article, author Guy Deslandes argues that 2016 will be the year of loyalty convergence and offers three trends that will drive loyalty marketing strategy this year.

2016 will be the year that brings platforms, technology, and data closer together as brands focus on establishing loyalty within a streamlined everyday shopping experience in order to create more value and a better experience for programme members. To achieve this vision of loyalty convergence, marketers will work at bridging the gap between on- and offline loyalty activity, tapping into the trend for mobile payments, and expanding the data sets they use to enhance the relevance of offers. Here are three trends to watch:

Creating a multichannel experience
The growth of multichannel retail to address the needs of the modern �always on� consumer has transformed brands� approach to customer engagement. In 2016 brands in the travel and hospitality sector will continue to emulate this �ever-present� multichannel experience and embed their loyalty programmes within it. Mobile, increasingly consumers� primary online platform, will be a particular focus. Our research suggests mobile is already an important platform for loyalty programme engagement: many brands we work with reported that more than a quarter of loyalty mall transactions on Black Friday 2015 were on mobile. A strong and intuitive user experience will be crucial as this volume grows.

The multichannel approach relies on finding not only the right brand partners and inventory, but also the right technology partners to build the links between on- and offline platforms. In 2016, travel brands will explore ways to use their physical footprints to create experiences that connect consumers back to their online loyalty platforms. Airlines could, for instance, create earning and redemption opportunities for travellers around products and services they have experienced during their travel journey � from the lounge through to the flight itself.

Integrating loyalty further into everyday transactions
Cash payment volumes are expected to fall by as much as 30% over the next ten years. Contactless card payments total 1 billion per month in the UK alone now, accounting for one in ten card transactions. As many as a quarter of consumers would abandon a transaction if they couldn�t use a card. The arrival of Apple Pay has jumpstarted mobile payments. The UK is taking significant steps toward becoming a cashless society, driven largely by millennial consumers� desire for an immediate and seamless shopping experience, on- or offline.

Translating the seamlessness of the contactless payment experience from offline into online shopping will be key; social media sites� testing of �Buy Now� buttons within sponsored posts is one example of how some brands are trying to achieve this. Loyalty programmes, too, will become more deeply integrated into this joined-up retail landscape, making rewards more attainable and earning and redemption opportunities more accessible. Brands will expand their portfolio of loyalty programme partners so that tapped transactions become synonymous with earning points, perhaps even looking beyond the �usual suspects� of retailers to extend the influence of loyalty into other everyday consumer spending � imagine earning points every time you tap in on public transport using a contactless card.

Brands will also look to boost engagement with loyalty programmes by making reward points easier to redeem. This might be by promoting new redemption opportunities such as �topping up� points with cash, called for by 50% of consumers in our research. Or it might be through unifying the earning and redemption of points in a single online loyalty marketplace, giving consumers more access to points within a more integrated and unified e-commerce experience.

Taking personalisation to the next level
Consumers have become accustomed in recent years to sophisticatedly personalised online services. The likes of Amazon and ASOS have led the way, impressing with the relevance of their content and product recommendations. Many targeting techniques based on demographic markers and transaction histories have been transplanted from e-commerce and direct marketing into loyalty programmes to help create relevantly personalised experiences for consumers. In 2016, brands will take personalisation to the next level to develop a more nuanced picture of customers as individuals.

Brands will start tailoring offers not only according to consumers� social groups, past purchases, browsing behaviour, or interactions with marketing emails, but also according to their loyalty points balance, how recently or frequently they have been active, and their tendency to �top up� points with cash. This tighter integration of personalisation into the loyalty process should make rewards more affordable and accessible.

Contextualised personalisation will also use additional information to present consumers with the most relevant inventory in the most accessible format. The type of device a consumer is using will help brands serve the best-optimised version of their loyalty mall, while weather and location data will dictate what inventory is pushed to the dynamic storefront, making it more likely that consumers will see products they want or need at the time.

Guy Deslandes is E-Commerce Sales Director at Collinson Latitude.

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