Shoppers digital demands have shifted and accelerated during lockdown. James Smithdale, co-founder and CEO of pqCode, outlines how brands and retailers can revitalise loyalty to boost footfall and grow customer lifetime value at this crucial time, with three emerging trends defining next-generation loyalty for retail’s new normal.

Before lockdown, younger customers were already demanding digital experiences as part of their bricks-and-mortar shopping journeys. With online shopping behaviours learned and accelerated during the covid-19 outbreak a joined-up loyalty strategy that rewards customers wherever they spend, and with the least possible friction, will be even more important as lockdown eases and non-essential retail is now open.

Loyalty will live in smartphones

All the latest research points to Millennials and Gen Z seeking a customer-centric shopping experience – one tailored to their wants and needs as valued customers. In Accenture’s report: Who are the Millennial Shoppers and what do they really want? shoppers describe their ideal shopping experience, which of course is increasingly digital and mobile. Accenture says the majority want ease-of-use of any scheme they sign up to, with phone apps for loyalty the natural direction consumers are leaning.

Our recent research has found that loyalty cards are considered too much of a hassle by over a quarter of younger consumers. The logical progression will be for plastic loyalty cards to be replaced by mobile apps where loyalty membership, points and data are stored securely and conveniently on customers’ phones. By eliminating the need for a physical card and having the programme live on the smartphones that consumers carry around everywhere, it’s possible to increase loyalty scheme sign up rates and ongoing engagement levels.

Personalised, relevant loyalty rewards

A survey last year from YouGov and Mando-Connect, asked 275,000 UK consumers what they want from loyalty programmes. The findings reveal that the British are far bigger fans of loyalty than most brands think. 77% of British adults are members of at least one loyalty programme, and 89% of these say they respond best to personalised rewards and offers. 72% think loyalty programmes are a great way for brands and businesses to reward their customers and 59% think all brands should offer a loyalty programme, as long as the incentives are relevant.

It follows that engaging fully with a reward programme requires points to be collected, and so making this as easy as possible for busy shoppers is essential. Our research flagged the fact that 1 in 5 (20%) of respondents said that loyalty benefits were missed out on because they didn’t have their loyalty card with them. Once again, smartphone storage of loyalty information would be a more reliable way for customers to participate fully in personalised schemes based on rewards and incentives.

Greener schemes will thrive

Our survey also supports the need for ‘green’ sustainable practices in-store, with nearly 1 in 4 young people aged 16-34 choosing not to take a paper receipt and coupons because of environmental concerns.
Sustainability is a massive issue for young consumers. It is therefore perhaps unsurprising to find that over 4 in 10 (41%) retail executives are looking at implementing or continuing paperless transactions in-store as part of their ongoing future-proofing efforts, and around 3 in 10 (29%) have sustainability issues as a primary concern on their corporate agenda. This could lead to a reduction of printed loyalty scheme coupons and loyalty points information on printed till receipts over time, as retailers strive to reduce their carbon footprints, while also meeting shopper expectations regarding sustainability.