Loyalty programs perceptions Retail IT Summit Belgrade, 14.10.2014
Belgrade - Retail IT 2014
Jul 04, 2015
Explicato's presentation from the 5th Retail IT Summit in Belgrade, October 14th, 2014
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Loyalty programs
perceptions
Retail IT Summit
Belgrade, 14.10.2014
www.explicato.comThe Problem
So far, I have always missed the customer.
Really?
Yes, just think about it!
www.explicato.comThe Problem: Design
There is a lack of knowledge about the customers
experience, expectations and preferences.
Sometimes the bandwagon effect plays a role, while
other times the projects are led mostly by IT capabilities
instead of business reason.
Last but not least: there are few proper solutions to
measure the results.
A Loyalty system is not a goal, nor a panacea.
www.explicato.comThe Problem: Follow-up
Once started, programs rarely adapt with new features.
Because of IT-driven design, actionable insights remain
buried.
Although the number of people signed up for loyalty
programs may be high, few chains know their
abandonment rate.
Each of these can quickly render a loyalty program redundant.
www.explicato.comThe Problem: Info Gap
Profile of potential and existing customers?
Program’s impact on customers’ usual behavior?
Motivational and value perceptions driving customers to
join loyalty programs?
Best channels to communicate with the customer?
Nowadays, loyalty program design is
a shot in the dark.
www.explicato.com
Traditional segmentation dimensions
- age
- gender
- household income
Satisfaction levels of current loyalty program users- uptake status
- participation by industry
- satisfaction levels
Additional information about customer-perceived
value - willingness to join loyalty programs
- decision drivers and expectations
- preferred communication channels
Methodology: Segmentation
www.explicato.comFindings: Motivational perceptions
Motivational drivers for current and future loyalty program
members
- Better spending control 32% vs 36%
- Access to new/modern products 27% vs 23%
- Access to best quality products 11% vs 8%
- Feeling special 2% vs 7%
- Bonus points to spend later 8% vs 5%
- Added layer of confidence 3% vs 5%
- Cross-platform functionality 2% vs 4%
- Longer-lasting shopping pleasure 0% vs 1%
2% see no benefits in being part of a loyalty program
www.explicato.comFindings: Segmented Motivational Drives
Perception of quality in relation to loyalty programs is
lowest in the most desirable market segments –
upper-middle classers between 25 and 55
0% <10%
www.explicato.comFindings: Cross-industry participation
Consumers taking part in loyalty programs in different
industries are still few…
But 65% are interested in cross-platform functionality
37%31%
19%31%
6%11%
FMCG chainsGas Stations
Both industries
30%
30%14%
Lower-Mid Mid Upper-Mid
www.explicato.comFindings: Is plastic still fantastic?
Loyalty programs are often associated with cards. But a
peek into people’s wallets tells a different story…
Plastic is becoming a thing of the past
21%
42%37%
36%
34%30%
www.explicato.comValue Chain: The big picture
Retailer’s
sales data
Customer basket
analysis
DED
ICA
TED
CA
MPA
IGN
S
Other SystemsLoyalty SystemPOS System
Retailer IT
infrastructure
Transactional sales
and loyalty data
Incremental data loads
following own designed
data modelPoints
Earn & burn
Discounts
Promo
Information
Privilege
www.explicato.comValue Chain: SaaS, Data Warehouse, BI
ETL
sFTP
Client 1 Cube
Client 2 Cube
SSAS/SSRS
Web-based Reports (SSRS)
MS Excel Reports
Client 1 Site
Client 2 Site
Multi Branded
Web Portal
Client 1 User(s)
Client 2 User(s)
Standard Input Format
(extracts)
Unified Data Model
POS System Loyalty System Other Systems
ETL
Client s Site
Native Data Formats
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