Loyalty Strategy

How Loyalty Programs Can Ease Supply-Chain Blues This Holiday Season

Photo by Kayle Kaupanger on Unsplash

Supply-chain issues are causing the lion’s share of Americans — 82% — to fret about disruptions to their life plans, according to research by Oracle. And that includes having to endure an “IOU Holiday.” Here’s how merchants can help them avoid disappointment — using their loyalty programs and the insights from their member data.

What is the hottest gift on American wish lists this holiday? Fulfillment. And while many companies can’t work their way around product shortages, they can help ease their customers’ fulfillment blues and feel as if they are getting something they want for the season, by using one of their smartest sales tools: their loyalty programs.

By: Jenn McMillen

Think about it. Virtually every American adult in the country belongs to at least one loyalty program. The most active members share a lot of data through regular brand interactions that include not just purchasing, but communications via website activity, social media and email responses. Those who feel their programs “get” them, and answer their needs, engage more.

Now, with 27% of shoppers worried the gifts they want to give this year will be out of stock, according a recent poll by Oracle Retail, loyalty marketers have an opportunity to prove what they can do, and that is this:

Prevent IOU Holidays — At. ALL. Cost.

Because despite understanding product shortages, one-third of shoppers said they will still be “outraged” if the gifts they order are even delayed.

Well-run loyalty programs include the three necessary features to beat the IOU Holidays blues: they collect the right data to understand member preferences, they can derive insights from of members’ online browser activity, and they include methods for one-to-one, real-time engagement, via text and email.

Here are how these features can help save the holidays.

Play Santa with the wish list. Invite active members to share their holiday lists and in return send notifications when the desired products are in stock. Shoppers then have a window of time (say, 24 hours) to snap up what they want. Think of Delta Airline’s SkyMiles feature, which invites members to enroll for notifications of last-minute deals, or Home Depot’s Promo Text Program, that sends members messages regarding special offers and promotions. There are resources online that provide inspiration and the basics, such as CheckedTwice, an organizer of digital wish list that consumers can share with family members and loved ones, and GiftsApp, a wish list-creating app. Such “live lists” would present real-time, “saved my butt” benefits to members, which they will likely remember, while providing loyalty marketers pinpoint data via opt-in engagement.

If you like Giorgio, you’ll love Primo. Or, make “if you like that, you’ll love this” suggestions. Based on shared member gift lists, or purchase and behavioral data collected via a rewards program, merchants can send suggestions of products that are similar to hard-to-get items. This ensures members have several options with that merchant; that they can get their mitts on something close to what they want. Bonus points if it that alternate item is less expensive. Amazon set the standard on this feature — posting “like that/this” notifications to its Prime members as they browse — but any reward brand should have the resources to capitalize on it. Such proactive product promotions can help companies unload overstocked items, reducing the need to mark them down later, which leads to enhanced sales and margins.

Improve customer odds with lottery-like events. This is a build on list sharing. Merchants can send “get in the game” notifications to members about drawings for hot products when they are in stock. Those who enter have a chance to be drawn and get dibs on items when they are in stock — or even win them. This model borrows from what bourbon distilleries and liquor stores have been doing with hard-to-find bottles. But it can be applied to all kinds of products. Microsoft Rewards holds a monthly sweepstakes contest for those who join the program, with prizes that include the Xbox and Surface Pro 7 — likely on a lot of holiday lists. Other brands can (and do) invite members to share their favorite cooking recipes, clothing ensembles, or feedback for a chance to win a “hot” prize. Strategies like these help merchants optimize inventory for higher returns among most loyal members, which leads to more opt-in data and enhanced loyalty.

Let members know the clock’s ticking. Shoppers have said they plan to start shopping early, but that can present its own bottleneck issues. A survey by RetailMeNot reveals nearly 60% of all shoppers planned to start holiday shopping before November, which could cause early shortages. Yet 16% of loyalty members say they could not find information about product availability online, according to a recent report by The Verde Group. This is a “Fulfillment 101” fail. Loyalty apps can send gentle reminders that estimate how much time it will take for goods to arrive to the member, or even better, provide loyalty members exclusive shipping timelines that are faster than those of non-members. Or they can change the calendar altogether: Best Buy has done this by announcing an earlier Black Friday, with price guarantees — plus, exclusive offers for its members. These notices encourage member interaction, gauge click-throughs for metrics, and help with inventory planning.

Loyalty is Not for IOUs. Unwrap the Rewards of Data Now.

Look, there are many ways to fulfill holiday expectations. Loyalty programs and the insights from their marketing data are a gift that can keep giving, when put to their most effective use. It can be done by simply remembering this: customer loyalty is not “owed”; it is earned. This opportunity is all but wrapped up with a bow.

Jenn McMillen, nationally renowned as the architect of GameStop’s PowerUp Rewards, is Founder and Chief Accelerant of Incendio, a firm that builds and fixes marketing, consumer engagement, loyalty and CRM programs. Incendio provides a nimble, flexible and technology-agnostic approach without the big-agency cost structure and is a trusted partner of some of the biggest brands in the U.S.

How Loyalty Programs Can Ease Supply-Chain Blues This Holiday Season
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