There are some retailers that are clearly well advanced on their path to digital transformation, with shopper-facing technologies and deployments in areas such as e-commerce, m-commerce, social media, loyalty applications, scanning, checkout & payment, gamification and augmented reality. This level of progress is generally laudable, with retailers attempting to better cater to shoppers for whom mobile is a way of life; shoppers who are looking for retailers to serve them across multiple channels while minimising friction and creating genuine seamlessness.
There are other retailers who, on the face of it, are somewhat less advanced, only trading through stores having decided that multichannel retailing is currently not for them. This doesn’t mean that these retailers are less digital – far from it. Grocery discounters and convenience retailers in many countries have shied away from e-commerce, lacking the range or the basket size to make such a move a viable one. Despite this apparent lack of technological prowess, many of these retailers are digitally powerful in areas such as replenishment, social media, supply chain, loyalty campaigns, scheduling, cash management, apps and shopper data.
Even though retailers might not be directly commercially reliant on digital, it does not mean that they have ignored the strong influence that digital exerts on the path-to-purchase or the shopper journey. Most polls of retailer CEOs places digital somewhere near the top of their strategic agenda, with customer experience, digital marketing, data and analytics and process optimisation the key bullet points in digital transformation.
Despite well-documented issues in terms of measurement and return on investment, digital has become firmly embedded as a key part of most retailers’ marketing mix. Taking its place alongside press, TV, out-of-home, direct and radio, digital marketing – be it online, email or mobile – is now a prerequisite for any retailer wanting to successfully engage with an increasingly tech-savvy shopper base. While it might still be hard to quantify the benefit of a retailer’s activity on LinkedIn, Pinterest or Instagram, it is beyond doubt that other social media channels like Twitter and Facebook have become a vital part of any successful retailer’s customer service armoury. This is not only in terms of dealing with feedback, but also in terms of providing engaging content and creating genuine moments of personalised dialogue rather than the one-size-fits-all broadcasts still used in more traditional media channels.
As competition deepens for retailers, with traditional grocers, discounters, c-stores, specialists and e-commerce operations all chasing the same shoppers, the imperative for differentiation and engagement has never been greater. Whether a retailer’s main objective is to recruit new or lapsed shoppers, drive football, bolster basket size or nudge shoppers intro different categories (or all of the above!), there’s little doubt that digital has a potentially significant role to play.
Moving beyond the transactional and into the more emotional end of the shopper loyalty spectrum, digital has a demonstrable benefit in bringing a greater sense of fun and engagement into the shopping experience: it can be a great vehicle for simply saying thank you to loyal customers through the provision of a gift, discount or other tangible benefit.
Gamification has proven success at creating this engagement and delivering on both hard and soft objectives: sales lifts (primarily through higher traffic); improved shopper perception and advocacy; greater engagement with related advertising messages; and a greater willingness to share personal data with participating retailers. The benefits of a gamification campaign have proven to be long-lasting, with participating shoppers more likely to go on and buy products that participated in the game and also very likely to participate in the next gamification campaign – thereby building a long-term engaged digital audience.
Research that TCC recently conducted among over 6,500 shoppers in six key markets revealed a general disenchantment with the status quo in loyalty marketing: 63% of shoppers agree with the statement that “I want to feel rewarded for my loyalty by more than just another loyalty card.”
The shoppers that we interviewed expressed enthusiasm for other types of loyalty campaigns: those that give shoppers the opportunity to receive free or discounted products or collectible items. By providing shoppers with these tangible ‘thank you’ moments, shoppers believe that this would be an effective way to differentiate and could prompt them to switch allegiance to retailers who provide this method of rewarding loyalty.
There is clear scope for retailers to elevate their relationships with their shoppers; to transform the loyalty they demonstrate to retailers from a functional inertia or convenience-driven habit into more of an emotional bond. Digital should be at the heart of this elevation, with gamification an affordable and powerful technique to forge bonds with shoppers that go well beyond the transactional.