THE FUTURE OF LOYALTY PROGRAMMES
Those that adapt to changing consumer behaviour keep the shoppers coming back, writes Sanet Oberholzer
Loyalty programmes are proven performers when it comes to buying behaviour. However, according to new research from McKinsey, consumers are more willing than ever to try out new stores, brands and websites as a result of the Covid-19 pandemic.
Jess Huang, a partner at McKinsey & Company who co-leads their loyalty work, says consumers are not necessarily becoming less loyal. “It’s just so much easier for them to try something new,” she says. “So brands are really attempting to figure out a way to develop and maintain that relationship with the consumer.”
According to an article published by the company last year, 35% of US consumers have tried new brands since the start of the Covid-19 pandemic, and 77% exhibited new shopping behaviours such as new channels and new stores — a trend that has been observed in consumers around the world.
Clicks chief commercial officer Rachel
Wrigglesworth can attest to this shift in shopping trends. She says the company has observed a significant move to online shopping since the beginning of the Covid-19 pandemic, with a growth of 191%.
Andrew Mills, Pick n Pay retail executive in marketing, concurs, saying more customers started opting for the ease of online shopping during lockdown and have continued to be regular online shoppers.
But despite this shift in customers’ preferred shopping channel, their Smart Shopper loyalty programme — which to date has over 8.5-million active members — reached its highest participation levels this past year since launching in 2011.
In a similar vein, following the success of the Shoprite Group’s Xtra Savings rewards programme launched in Checkers stores in October 2019, the programme was introduced in Shoprite supermarket chains in October 2020. Since then, it has grown to become one of SA’s largest supermarket rewards programmes with more than 17million members.
“The future of loyalty programmes lies in offering real value in the most seamless way possible,” Mills says. “Our loyalty programme lets us reward our customers, but also enables us learn more about their shopping needs. With this knowledge, we can adjust and innovate our offerings to better serve them.”
Some of the innovations the supermarket chain has implemented include digital grocery vouchers and PnP Mobile, which lets customers earn instant free data rewards by
linking their Smart Shopper card, in addition to existing Smart Shopper rewards and offers.
Johan Kleu, the executive head at Momentum Multiply, says loyalty programmes offer value to members where they need it the most. That said, he is adamant that rewards programmes cannot become complacent.
As part of the Shoprite Group’s strategy of adapting and offering consumers more benefit, Shoprite Xtra Savings members are also able to register for a free funeral benefit — at no cost — as of April 2021.
“Loyalty programmes will continue to remain relevant as consumers are always looking for added value, be it discounts, exclusive offers or entry into competitions,” says Lynne Blignaut, head of group loyalty and customer rewards at Dis-Chem. “The economy is strained and we know that customers want real value, discounts and tangible ‘cashback’ in their wallet.”
Blignaut says at the beginning of lockdown they saw a drop in customers visiting stores over the course of a month as people avoided spending time in public spaces, but they did see a large increase in the number of online transactions. “This highlights the importance for brands to evolve and adapt to offer customers the same rewards, regardless of the channel they are using to engage with your business,” she says.
For Blignaut, this means ensuring that customers are made aware of the numerous options available to them via Dis-Chem’s online store and app services.
Says Kleu: “Covid-19 has accelerated the need for digital transformation — particularly across Africa — and rewards will quite literally need to get with the programme or be left behind.”
In an attempt to “get with the programme”, Momentum Multiply decided to make numerous changes to show value to consumers at a time when they were under more financial pressure.
For example, in the early stages of lockdown, when South Africans could buy only essential goods, they offered additional cashback at essential goods partners. They also responded to changing exercise trends and the fact that members were not able to go for their normal in-person health and fitness assessments.
“For loyalty programmes to remain relevant now and in the future, they need to recognise the changing market behaviours and reassess how they engage with members — not only to offer the immediate value they seek, but also to retain them as clients into the future,” Kleu says.