There was simply no choice; the industry needs must evolve because how organizations do business and how customers shop has evolved considerably and in sometimes unexpected ways. Growing smartphone and Internet penetration, for example, have provided new channels to customers resulting in a paradigm shift, with smartphone users extending by approximately two times in the past five years alone. In addition, emerging channels such as e-commerce have provided more convenience to customers, facilitating massive growth in e-commerce sales for brands. Therefore, how companies engage with their customers and secure their loyalty to the brand has had to evolve with these changes.
By Aneesh Reddy
While the Asia Pacific is seeing substantial digital growth, the recent Covid-19 pandemic has forced significant changes in customer loyalty patterns. During the pandemic, customers moved dramatically towards online channels, and companies and industries responded. As the lockdowns forced people to stay at home, there was a surge in digital transactions and e-commerce spending. Also, a shift to digital communication generated vast amounts of data, enabling organizations to analyze customer behaviour and adopt digital technologies such as AI and Analytics to personalize customer engagement and drive loyalty. Loyalty programs are thus becoming more appealing since the lockdowns and will experience a more positive impact in the coming years.
A multi-dimensional marketing strategy
Omnichannel loyalty remains an essential strategy for brands to interlink rewards across channels in global loyalty trends, allowing brands to fuse their e-commerce site, mobile app, and brick-and-mortar stores into integrated shopping experiences. Traditional engagement strategies like discounts and coupons have been replaced by more personalized interactions and meaningful incentives which speak to the customer as an individual with unique preferences. Beyond transactional rewards, brands are now creating newer rewarding opportunities through non-transactional behavioural events and gamified loyalty.
Thus, loyalty is now perceived as a multidimensional marketing strategy from being a unidirectional’ points bank’ system. Brands are increasingly looking for a single loyalty proposition that includes CDP and campaign tools that will help them get a 360-degree view of their audience, influencing how campaigns are run and understanding the user’s lifetime value with the brand. Considering so much data is available, modern loyalty platforms help cut through the analytics layer and provide straight AI models that help brands run their campaigns almost instantaneously.
With the evolution of digital technologies, legacy transactional systems are becoming obsolete. New-age technologies such as AI, Analytics, and Augmented Reality are being onboarded by companies seeking to enhance customer engagement. An astonishing 59% of customers now feel that AI will revolutionize their business interactions.
Approaching each vertical with unique loyalty elements
It has also become crucial to make loyalty strategies meaningful in each industry based on consumer demand and behaviour. In this regard, much loyalty innovation is currently happening in the oil and gas, consumer packaged goods and conglomerates industries:
Oil and gas: The global Electric Vehicle market is excited, paving the way for fuel forecourts to transform into charging hubs. Major fuel players are expanding their businesses beyond fuel sales, adding service offerings like Non-Fuel Retail (NFR) and utilities at fuel stations. Famous examples include Shell’s partnership with Food Panda in Singapore, BP’s partnership with Deliveroo in the UK etc.
Consumer packaged goods (CPG): In the consumer goods sector, loyalty has become a solid avenue to gather customer data, understand demand better and connect directly with customers. Asian brands are engaging with customers through various loyalty programs such as influencer loyalty, gamification, and coalition loyalty to meet the expectations of an increasingly demanding customer base. For example, brands in China invest in influencer loyalty as 40% of Chinese customers are affected by them.
Conglomerates: Global conglomerates have been looking to leverage a single umbrella loyalty program to link their multiple brand offerings. These loyalty strategies offer several possibilities to cross-sell and up-sell through personalized rewards based on preferences and nudges to introduce them to newer products.
Loyalty is the key to unlocking growth
The APAC region is projected to grow at 20% and is expected to hold the world’s largest share by 2024. The APAC Loyalty Management market was estimated to be ₹ 229 billion (US$3 billion) in 2021 and is expected to reach ₹ 400 billion (US$5 billion) by 2024, projecting a significant growth rate of 20% from 2021 to 2024. As a result, it is expected to beat North America in the next 4 to 5 years.
The Total Addressable market size for loyalty management in APAC is expected to reach ₹ 400 billion (US$5 billion) by 2024, projecting a significant growth rate of 20% from 2021 to 2024. This growth will be driven by increasing social media usage, high internet penetration, and the expansion of the e-commerce industry.
Companies ignore the new loyalty and engagement paradigms at their peril. Customers expect more from brands than basic earn-and-burn transactions, and the right loyalty partner empowers your customers with elements like gamification, subscriptions, and incentivizing non-transactional engagements. In addition, customers are tracking campaign performance through real-time live dashboards and can convert extensive datasets into analytical insights as to consumer behaviour.
Now is a great time to explore these methodologies, and it makes good business sense to carve out a unique place for yourself in the loyalty landscape.
This article originally appeared on Campaign Asia. Aneesh Reddy is the executive director and chief executive officer of Capillary Technologies.
The post How Brands can Grow Omnichannel Loyalty in a Sophisticated Online Marketplace appeared first on TheCustomer.