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Retailers need to re-invent loyalty programs

Loyalty of a customer is a gift for any business. Much has been done to increase the number of loyal customers and maintain the loyalty of the existing customers. It seems like whatever the retailer does, the customer expectations keep increasing. Does it mean that retailers need to forego the existing methods and adopt new methods to enhance customer loyalty? The answer lies in determining how much to re-invent and what to enhance. Customer loyalty is one of the topmost goal that each retailer wants to achieve - as a loyal customer has higher ROI than a normal customer.

Today, retailers run a number of offline and online loyalty programs. Retailers such as GAP and Nordstrom manage their cross-sell and up-sell through loyalty programs

      GAP uses cross-sell opportunities via pop-ups, based on user's online shopping behavior;

      Nordstrom makes it convenient for customers to manage their wish list by allowing customers to:

·         Share their wish list with friends and family through an email and /or find their friends and family's wish list to give gifts they want

·         Save multiple addresses, up to 150 of their favorite items and set privacy settings

·         Nordstrom emails their customers when items in the online shopping bag are about to be removed (reminders are not sent out for wish lists, but emails can be sent to friends and family)

Customer loyalty is managed and maintained by almost all the retailers, but a continuous improvement on their current offerings can be achieved by making the loyalty programs easier to adopt and with higher incentives to the customer. Nordstrom has taken customer loyalty a step further - it has tried to understand its customer better and provide a personalized loyalty program:

  1. Nordstrom's "Loyalty Program" is a service where customers can enroll themselves to avail benefits based on purchasing pattern
  2. A professional services team across the channels is in place to work with customers
  3. A point system is in place to drive traffic

As retailers continue to expand the usage of technology such as LBS (location based service), 'Design for self', bluetooth technology iBeacon, etc., it is clear that such innovative technology would be very helpful in enhancing customer loyalty.

·         LBS services are being used to notify consumers about promotions / offerings in nearby stores. These services need to be more personalized based on customer's buying pattern

·         'Design for self' enables the consumer to customize and design their products online. A few organizations - Nike (Apparel, Accessories) and Toyota (Auto Manufacturer) have empowered their customers to design their products online. Fulfilling each customized requirement may not be an easy task. To begin with, retailers can prioritize the customers based on the number of loyalty points of a customers and delight the customer by fulfilling their customized product

·         Bluetooth technology such as iBeacon is being used to provide contextual promotions to the consumers in store. Based on customer's aisle movement and selection of products, these promotions need to be targeted to enhance customer experience and thus increase customer loyalty

Targeted promotions to loyal customers would result in a higher ROI, but retailers need to keep reminding themselves that their customer has become much more tech savvy. Hence, retailers need to be a step ahead and use latest technology innovations to revamp and enhance their existing loyalty programs.


To know more about how you can use various integrated technology innovations to enhance your existing customer loyalty programs, meet our experts at Retail's Big Sow 2015. Schedule a meeting now. Visit

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