The Top 2019 Loyalty Trends for Retailers

In the Age of the Customer, consumers hold all the cards and that’s why differentiation at the product level is not enough for brands.

As a result, customer loyalty strategies have become more sophisticated and evolved for many brands seeking a competitive edge.

Given those factors, what 2019 loyalty trends can marketers expect?

Here are five things to watch for this year:

1. Many Loyalty Programs Will Be Revamped

Armed with huge amounts of information at their disposal, consumers are more empowered than ever in the retail world. Due to this reality, loyalty marketers need to act.

Since loyalty is a competitive differentiator in the marketplace, we’re going to see more brands revamping their loyalty programs to meet and exceed consumer expectations.

As customer experiences are becoming more personalized, the benefits of joining a loyalty program are evolving beyond discounts to provide additional value that helps establish an emotional connection between the customer and brand.

A high percentage of retail loyalty programs will be get makeovers in 2019 because they can’t afford to maintain their status quo.

Retailers realize that maintain the status quo won’t cut it in today’s ultra-competitive market.

2. Loyalty Program Benefits Will Focus More on Experiences

While there is still a place for transactional benefits, things like discounts and free shipping don’t do much to differentiate. Most traditional loyalty programs feel similar.

These types of benefits do bring out emotional responses in customers. After all, getting a deal makes people feel smart. However, balancing these elements with experiential benefits will make customers feel smart and special.

Offering differentiated customer experiences is the key to attaining true loyalty. Loyalty programs benefits need to add value and be relevant.

The customer experience helps drive loyalty program member satisfaction and engagement. Experiences that include simplicity, a human touch, and recognition are the ones that will have the greatest impact on consumers.

3. Technology Will Play a Larger Role in Loyalty Programs

Given the enormous amount of time that people spend on their phones each day, technology will play a larger role in the execution of all loyalty programs, especially mobile.

Consumers want simplicity from a brand and to connect on emotional levels to give their loyalty. Those emotional experiences, often derived from experiential brand events, go a long way toward attracting your most loyal customers.

And technology can play a huge role in creating these types of power these experiences. Brands will constantly adjust their loyalty programs via technology to meet the needs of their customers. Leveraging emerging technologies will be crucial for brands to enhance their loyalty programs.

4. Retailers Will Use More Personalization

Personalization has been a buzzword in the retail world for quite some time now, but it’s been difficult to scale effectively.

For as much as personalization has been talked about, it remains a large opportunity: Consider that less than half of loyalty marketers use experiential benefits or personalization of offers and interactions. But more than 61 percent of brands plan on adding personalization capabilities to their organizations during 2019.

Personalization has been based around consumer behavior and basic trends. The challenge for loyalty marketers is going beyond this. It means integrating customer behavior with a retailer’s product data while understanding different buyer categories.

Things like their individual order rates per year, spending category, preference between mobile or desktop, which product category each consumer has an affinity to, and how price-sensitive each customer is are key.

5. More Retailers Will Launch Premium Loyalty Programs

Some are calling them subscription programs or membership programs, but the power behind all these paid, such as Prime, will be reflected in other brands in 2019. Brands realize that a premium tier doesn’t replace a traditional program, but merely enhances it.

We’ll definitely see more retailers launching premium loyalty programs in 2019.

Some brands who launched or added to an existing premium loyalty program in 2018 include AMC Theatres, Wayfair, Cineplex, Boxed, Bob’s Stores, and CVS. Canadian athletic apparel retail Lululemon Athletica just announced that it’s been testing a premium loyalty program that charges members $128 annually.

Because the results have been so successful, officials for the athleisure brand plan to expand the test into additional markets, possibly at a higher membership price point.

Premium loyalty spotlights your best customers, who become exponentially more valuable.

2019 is About the Loyalty Moments

Retailers are realizing that loyalty isn’t set it and forget it. Loyalty programs can be a deep differentiator at every loyalty moment. Many brands are already rethinking loyalty and more will follow this year.

As technology improves rapidly, loyalty program benefits will become more experiential-based to attract more customers and build emotional connections.

As a result, personalization, which was highly visible during the holiday season, will be used more by retailers throughout the rest of the year to create a greater share of mind with their customers. Due to the success of various premium loyalty programs, and the momentum in the industry supporting them, even more retailers will implement premium tiers in 2019.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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