Next-gen features for retail loyalty programs

by Julia Pott

To say that loyalty management is digital these days does not even begin to do justice to the revolution in customer relationship management. Consumers use their smartphones to do their shopping and manage their customer accounts. Retailers are increasingly focusing on mobile commerce, optimizing their web stores for smartphones and offering mobile loyalty apps. Omnichannel services ensure a seamless customer experience at any time, in any place and across different channels by synchronizing data and interactions. And personalization has become much more precise and powerful thanks to artificial intelligence: AI analyzes customer behavior and preferences to provide tailored offers and content in real time.

At the heart of this further development of personalization is machine learning in combination with sophisticated data analysis. The AI models are trained to recognize patterns and predict future behaviour. For example, the system recognizes that a customer prefers a certain style or that a customer attaches great importance to sustainability. Not only the product recommendations can then be automatically adapted to the preferences, but also the rewards, the contact occasions or the entire communication, for example in design or language style.

There is also the timing factor: AI can determine the optimal moment to address customers. This goes far beyond birthday greetings. Whether individual offers for an anniversary, an event or at the right time to restart an abandoned purchase: AI can calculate this better than any human and take the appropriate steps automatically.

Loyalty points, which at some point result in a discount, are still in demand, but there are also numerous ways to create customer loyalty to your brand. A long-term and valuable relationship between a company and its customer base requires a feeling of personal appreciation, exclusivity and experience.

Modern customer loyalty programs no longer just reward purchases, but promote holistic customer engagement:

Mobile customer accounts, which allow customers to manage their data, loyalty activities, purchases and communication via smartphone, have another advantage: they are genuine omnichannel tools, as smartphones are always at hand. They can also be used in stores to identify themselves, obtain information via QR code or for interactive experiences.

With interactive in-store activities and gamification such as treasure hunts, games or competitions, you can promote customer frequency and entertaining engagement with your brand and products. Such measures can easily be implemented online or in an online-offline mix, for example through the use of QR codes, NFC technology or augmented reality.

Reward lifestyle commitment by rewarding recycling, fitness, mindfulness, a healthy lifestyle, product reviews or other actions. In this way, you can build a common basis between the brand and customers based on shared values that extends into their private lives.

Encourage your customers to leave product reviews and pass on feedback. Rewarded reviews motivate customers to participate and are an important building block for acquiring new customers.

Promote your customers' social media activities by rewarding shares or unique content in your channels.

In the face of tough retail competition, an individual approach and tailored offers are becoming increasingly important. Younger generations of shoppers in particular have grown up with the convenience of the online world, mobile first and social media communication.

The integration of AI into loyalty programs is therefore more than just a technological upgrade; it is a paradigm shift in customer relationship management. It's about moving from mass marketing to personal contact with individual added value.

AI-based data analysis and automation offers many advantages in this regard: Rewards, recommendations and communication can be played out faster and more appropriately. Interaction and engagement with customers can be expanded across many channels. These measures promote customer loyalty and can lead to more cross-selling and sales. In a dynamic and digital world, loyalty management technologies have become an integral part of the retail industry.