Loyalty is no longer about old-fashioned rewards systems or collecting paper coupons. Instead, enlightened retailers are employing digital innovation to modernize their loyalty programs, from using artificial intelligence to tailor rewards, offering one-of-a-kind experiences, and employing new tech such as blockchain to bring diversity and security to loyalty systems.

According to research by IRI Worldwide, in 2017 74% of consumers chose a store based on a strong loyalty or discount program. This holds true across the generations—according to the same research, 79% of millennials and generation Xers want a “strong loyalty or discount program,” as do 74% of baby boomers.

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The Future of Loyalty explores how the rules of the game are changing, as retailers explore personalization and simplify their rewards. According to Bryan Roberts, insights director at loyalty marketing company TCC Global, the key concept is “emotional” loyalty, rather than “transactional” loyalty. “We get bombarded with so many commercial messages and discounts and coupons and vouchers, so much is about the transactional stuff—it’s about price, or it’s about location, it’s about product,” says Roberts, whose firm has implemented in-store loyalty schemes for retailers such as Lidl and Co-op in Europe. He adds that, when shoppers are asked about what drives emotional loyalty, they respond that the two big drivers are “the in-store experience—is it nice, is it better, is it friendlier? And how much the retailer cares. Not just about the individuals as shoppers, but also do they care about healthy eating, do they care about the environment, do they care about suppliers, about employees? So there is a real emotional driver to loyalty.”

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In sectors such as airline travel and hotel bookings, many customers are entirely motivated by loyalty and are driven to maximize the points and miles they can earn to pay for future trips. The Points Guy, for example, which focuses on travel, flight and card deals, has evolved from a blog into a news and reviews website that attracts five million unique visitors a month.

The report looks at how to navigate the loyalty maze and point up the businesses already showing the way forward. It contains the sections:

  • Smartphone savvy
  • Experiences over points
  • Game on
  • Predictive and personalized
  • Flexibility rather than rules
  • Paying for the privilege

Download The Future of Loyalty for more.

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