Kevin Stirtz, a seasoned marketer and the author of “More Loyal Customers: 21 Real World Lessons To Keep Your Customers Coming Back,” said that the most powerful way to increase consumer loyalty was by making them happy. However, survey data shows that
is not as high as it used to be. Consumers are suffering from high inflation and reporting an increased cost of living. Mid-2022, more than 90 percent of the British planned to introduce
, and well over a third felt it was necessary to save on food and household goods. One way of doing it is using coupons and other deals offered by loyalty programs. Survey data shows that this is clear also to retailers, as discounts topped the ranking of
in 2022, closely followed by rewards and free things. Four in five adults in the UK have
. Among supermarkets, Tesco is considered to have the
, followed by Sainsbury’s and COOP. These three are doing the best job of easing the burden of increasing living costs.
Appisation of loyalty
Among the 10 UK food retail market leaders, all have a loyalty program and either offer a dedicated loyalty app or access to loyalty features through their general brand app. For a retailer, the main advantage of an app over a physical card is the possibility to store, access, and analyze all customer data centrally. When shopping behavior data is a competitive advantage, a digitized loyalty program is a must. However, apps also offer benefits to consumers. First and foremost,
consumers’ preferred way to engage with loyalty schemes is via mobile, regardless of whether they shop online or in a physical store. Additionally, new offers or discounts are immediately accessible and easily personalized. Further advantages include reducing paper use and savings on postage. But, there are also disadvantages. Apps may request access to data companies have no legitimate reason to have, such as the contact list or browsing history. More than four in five UK consumers were at least slightly
concerned with personal data tracking practices of retailers.
Use of AI in loyalty
The uptake of artificial intelligence among loyalty program owners is lower than among marketers in general. During a 2022 survey, 19 percent of the former said they had already implemented or were in the process of
implementing AI in their programs. In contrast, a different survey carried out in early 2023 revealed that nearly 70 percent of the
marketing professionals had already trailed the usage of AI. This gap will likely narrow as AI is already being deployed to perform tasks that could form the core of a smooth-running loyalty machine. The main application area is data analysis with the aim to produce individual discounts or other promotions based on various metrics, such as purchase history and demographics, and keeping multiple factors in mind, e.g., price sensitivity or value to the retailer. AI can also improve loyalty programs with innovations like voice activation to use the loyalty app hands-free, or facial recognition, used among others by KFC with their “Smile to Pay” feature.
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