The Changing Face of Loyalty: 5 ways the loyalty industry has evolved

28 September 2017

The industries we have today have evolved massively since they started out. Just look at smartphones; ten years ago they were just coming into existence and only a few people had them, now Apple have just launched their anniversary iPhone and 2.53 billion people around the world have a smartphone.[1]  For the loyalty industry, changes in customer behaviour and their expectations of brands, advances in technology and overall innovation has led to some big changes; and they aren’t about to stop. Here are some of the most significant changes that have shaped the loyalty industry, all with the same goal: improving customer experience. 

1. Stamps have evolved into apps.
Green shield stamps were one of the first methods of gaining customer loyalty back in the 1950’s. Shoppers would be issued stamps at retailers and petrol stations and the number they received would be based on the value of their purchase. The stamps were collected in books which could be redeemed for gifts in a catalogue once full. However this method is on its way out as everything becomes more digital. Consumers are now able to download apps and collect their points or stamps that way. All of this is to help consumers, not just by avoiding filling up their wallets with multiple loyalty cards but also by making it easy to find out how many points they have quickly and easily, wherever they are. 

2. Catalogues are now online.
It’s fair to say that one of my favourite pastimes as a child was going through the Argos catalogue and circling everything I wanted for Christmas. Paper catalogues used to be the most convenient way to browse without actually having to go into a store but now it’s a completely different story. Websites that are accessible at all times from any location allow you to filter and categorise search results as well as build wish lists of all desired products so you no longer have to trawl through pages and pages of things or actually be in store.

3. Little Black Books have been replaced by databases.
In the past most retailers kept the details of their most loyal and valuable customers in a little black book. Knowing their name, D.O.B, address and a few of their previous purchases was the closest a retailer got to being able to personalise the customer experience. Today, you’ll rarely see a physical little black book, as all customer information is properly stored in a database as retailers try to expand not only what they knew but also how many people they know about. Expanding knowledge about customers, learning more about what they like to do in their spare time and what their interests are allows brands to really personalise experiences and keep customers loyal.

4. Shop assistants are being aided by innovative technology and machines.
Traditionally people have been the only ports of call for customer service; however major advances in technology have meant that machines are being used to augment this process. When you walk into a store you probably don’t want to be met by a robot and in a brick and mortar situation machines would generally not be appropriate; it’s mostly online that this tech revolution is taking place. The use of chat-bots to help with online queries and live chats is becoming more frequent as machines learn more and more quickly. From the other side of the screen you’d have no idea you weren’t talking to an actual person. Brands like Amazon are also bringing AI into the home: with an Echo or Alexa consumers won’t even need to log onto the site to order a product, they can just simply ask and their machine will do it for them. Innovation in this area isn’t slowing down and the impact it could have on the industry is very exciting. 

5. Transactional rewards are not enough, consumers want experiences.
This change is a more recent one and can be seen more prominently with the luxury brands rather than high street; but I expect the line between the two to blur in the upcoming years if not months. Previously consumers have been perfectly happy with 10% off each time they shopped and looked forward to the summer and Boxing Day sales as a great chance to “bag a bargain” but today they are demanding more. To gain customer loyalty, brands need to offer their customers something that they can’t get anywhere else; tickets to concerts, invitations to VIP events, pre-sale previews, race days, holidays, days out, the list goes on. It is these types of rewards that differentiate brands, giving them an advantage over their competitors when it comes to securing customer loyalty and in turn, advocacy.

These aren’t the only examples that are out there; the loyalty industry is constantly evolving and in a year’s time things will look different again. The industry has become much more consumer focused as retailers look at ways to use technology and innovation to make the customer experience as seamless and easy as possible. The pace of this change isn’t expected to slow.