Discount newcomers and e-commerce are threatening brick-and-mortar retail, and customer loyalty has become more important than ever. In this piece for RetailTechNews, David Buckingham (pictured below), CEO, Ecrebo, discusses strategies and approaches for retailers to keep customers coming back into physical stores by mixing digital and analog: data and coupons.

The UK retail industry is a highly competitive space, with new threats coming from innovative entrants, the proliferation of online shopping, and the increasingly savvy nature of consumers.

David Buckingham, CEO, Ecrebo

Over the last few years, we have seen the old stalwarts of the industry being challenged by newcomers that pride themselves on low costs and high product quality. Take the grocery sector, for example, which has seen Aldi and Lidl triumph over their much larger competitors – indeed, Aldi recently ranked first place in a UK supermarket satisfaction survey.

We also see the increasing threat posed by e-commerce, giving customers the convenience of having any product they desire delivered right to their door. However, with just 15.6% of overall retail sales taking place online, there is still a huge opportunity for physical retailers to drive more customers through their doors.

Loyalty is key

While price is certainly a factor, the key tool for any retailer in this battle is loyalty. By building strong loyalty schemes that form part of the wider in-store experience, businesses can drive customer engagement, foster goodwill, and reward the most dedicated shoppers – all to ensure they come back again and again.

The popularity of loyalty schemes is made clear in research conducted by Ecrebo, which found that 85% of shoppers are more likely to shop with a brand if it offers a loyalty scheme, and that shoppers aged 25-34 belong to 2.8 digital loyalty schemes on average. But it’s the substance of these schemes that really matters.

It’s no longer enough to simply present shoppers with generic offers based on their presence in a store. Nowadays, retailers need to think outside the box and personalise their communications to appeal to shoppers on an individual level. We found that 74% of shoppers surveyed in our research said that they are swayed by targeted offers that are relevant to them.

However, the question remains: how can retailers successfully deliver these schemes?

1) Use data effectively to power personalisation

The level of personalisation that businesses can deliver relies upon the amount of high-quality customer data to which they have access. The more information gleaned from customers, the better the levels of engagement can be, in terms of both communications and promotions. With advancements in analytics, loyalty has been elevated to new heights and presents new opportunities for retailers.

But it’s not always enough to rely on the long-term approach, with some loyalty schemes taking several months to yield insights, by which time consumers may have moved on. Multichannel retailers have an advantage here, given that stores present another marketing channel to reach shoppers, but all retailers need to make the most of the data available to them in order to deliver the most personalised experience possible.

2) Take advantage of the continued coupon craze

Interestingly, while Ecrebo’s research noted a considerable interest in some of the latest in-store technologies, including mobile checkouts, cashier-less checkouts, and recommendation kiosks, there was a clear consumer demand for coupons – something perhaps now seen as old-fashioned by many. In fact, more than three-quarters (76%) of consumers said coupons change the way they shop, while 40% said they now expect a coupon when they shop and almost one-third stated they sometimes don’t make a purchase without a coupon.

In terms of how often coupons are being used by consumers, 45% said they have redeemed a digital coupon in the last six months, while 45% also said they had redeemed a paper coupon issued at the till in the last six months.

Based on these figures, it’s encouraging that 38% of respondents feel they get full value from the coupons they receive. The main takeaway is that retailers need to capitalise on the opportunity to create hyper-personalised and relevant offers in order to boost redemption rates and ensure shoppers are getting the full benefits associated with loyalty.

3) Never underestimate the importance of loyalty

While the concept of loyalty is ever-evolving in the retail industry, it remains a key differentiation tool in a highly competitive landscape. However, it has never been more important to ensure loyalty schemes deliver genuine value to consumers through personalisation – if not, they’ll simply choose to shop with another brand.

Ultimately, to ensure that they can deliver a successful in-store customer loyalty scheme, retailers need to make intelligent use of the customer data they have access to and convince their customers to continue sharing their data in order to receive even more relevant offers. Secondly, they need to make use of popular communication channels including digital receipts, at-the-till coupons, and in-store promotions to further drive consumer engagement and to stand out from the rest of the crowd.