The difficulties and opportunities of retail loyalty programs

The online domain is quite the easy place to create and uphold a smart retail loyalty program, due mainly to the abundance of quality data points that enables personification in offers and high quality customer communications. Physical retail loyalty programs however, are a lot tougher to personalize and make useful for customers. In this article we will define some common problems and of course some of the ways in which we think new technology can be leveraged in the said type of loyalty program.

The problem of physical retail loyalty programs

At the center of all challenges lies what we see as the clearest, most central hurdle for success in physical retail loyalty programs. The comparatively total lack of data points, data that provides you with the most fundamental insights for personification. In a well developed physical loyalty program today, at the peak of development, lies some of the larger FMCG-companies.

A typical loyalty program at, say, a company similar to Walmart, can adapt its campaigns and discounts, at a maximum, based on what a statistical model, based on POS-system registered + partner registered purchases, along with what any fetched demographics say.

The upsides of the physical domain

The main upside for Walmart-like companies, is its convenience (location) and share of wallet. Most of these companies can be your supplier of both foods, prescription drugs and construction materials, meaning, it makes sense for consumers to enroll into a program within which system there is a guarantee that they will have to spend money in the future.

The upsides can be developed

When locations make for the biggest positive factor in a loyalty program comparison to strict e-tail companies, it becomes important to instill the weight of the physical space. Rewarding customers for physical store visits, campaign usage and social sharing in-store, through a delivery model like an app, can be very effective, as you can visualize the customers engagement with badges and similar graphical content.

Creating a seamless loyalty program

The introduction of a customer application also serves other purposes. It onboards the customer onto your digital space, where you want the customer to be. In terms of tactics for guaranteeing downloads, its all about incentives and a little bit of force. You can’t continue with loyalty cards, as they have been habitualized in every customers mind for a very long time. You have to force customers more or less to use the application, through creating big upsides to it. Application exclusive offers, easily used in-store, is a great way to do just that.

If you another layer to the application, social functionality, you can create an engagement monster. Among the normal campaigns, why not add offers like “Review your last purchase and get a 20 dollar gift certificate”. When using any of the better review systems available for omni-commerce, every review will give you multiple values. Reviews create domain authority (SERP D.A.), creates brand trust and guarantees customer reactivation.


These are just some of the examples of how effective a well-constructed, greatly communicated, physical retail loyalty program can help you drive retention.