COVID-19 has triggered a digital transformation of the customer experience, which allows businesses to establish deeper customer connect. Businesses can provide the digital-first experience by taking ownership of the customer loyalty program, providing cross-channel loyalty program access and personalizing rewards.
The needs and preferences of consumers when it comes to their retail experiences shifted dramatically in the year 2020. Retailers have mostly addressed the transition to an all-digital retail experience, but they must continue to enhance their strategies to meet the needs of the new era buyer persona and gain their long-term loyalty.
Many loyalty programs were in desperate need of a revamp before 2020, but the pandemic has simply exacerbated the flaws of the programs that didn’t have the right strategy in place. According to FIS’ 2020 Generation Pay report, which polled thousands of consumers around the world, loyalty programs failed to meet customer expectations.
According to the survey, 56 percent of customers believe that the retailer, rather than customers, should be tracking their purchasing habits and offering rewards. Furthermore, 37% of respondents stated that collecting rewards through a loyalty program is sometimes more work than the rewards are worth, a proportion that increased by 10% when millennial and Gen Z respondents were questioned.
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COVID-19 not only expedited several retail trends, but it also acted as a catalyst for change in the retail industry. Consumers became more willing to engage with brands in more innovative ways as businesses struggled to adjust to the new pandemic landscape. Retailers now have the potential to engage with customers on a deeper level since consumers are prepared to explore new experiences and share more of their own preferences directly with brands. To be relevant in 2021 and beyond, retailers must continue to reinvent and innovate, and they may do so by following a few crucial tenets.
Increased Focus on Digital Channels
Retailers will need to continue to expand on the agility and engagement tools built during the pandemic as digitization becomes more widespread. Retailers must continue to enhance their e-commerce channels and use them as a link in their costumer loyalty strategy. In order to thrive in 2020, retailers had no choice but to focus on quick enablement. In order to extend their horizons in 2021 and beyond, they must prioritize the following areas:
- E-commerce profitability
- Maintaining e-commerce purchasing volume
- Reducing the time it takes for deliveries to arrive
- Increasing subscriptions and recurring orders by using loyalty as a currency
Consumers want retailers to use digital technologies to develop flexible loyalty programs that span several brands and businesses. According to the 2021 Global Payments Report from Worldpay by FIS, 81 percent of consumers preferred a system that allowed them to accumulate and spend points at numerous stores.
If retailers are unable to repurpose existing technology, they should look into third-party partnerships to accelerate digital channel transformation.
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Re-Evaluate the Value Propositions
In 2021, retailers will need to rethink their loyalty program value offerings in order to maximize expense reallocation and potential savings. They need to determine where the system is lagging and how to make the loyalty program more efficient and cost-effective for the company.
Brands should also explore their “social consciousness” in order to better connect with the non-purchase behaviour of their customers. By caring about what the consumers care about, brands can connect on a level that goes beyond the sale. Rather than simply reacting to concerns such as social justice, climate change, community, or anything else, businesses should get in front of their customers and display similar priorities.
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