Shopping has changed almost beyond recognition over the last few decades. Increasingly, shoppers don’t jump in the car to get those must-have Christmas presents; they instead open up a browser window. And this trend has only been accelerated by the Covid-19 pandemic.
Our changing shopping habits have been accompanied by changes in the way that loyalty programs are structured. The digital world provides plenty of tools for retailers looking to secure repeat custom. Customer data can be gathered and analysed with greater precision than ever before.
The history of Loyalty
The loyalty program is often thought of as a modern innovation. But the truth is that it’s been around, in one form or another, for far longer than computers and the internet. As early as the 18th century, American store-owners were dispensing small copper tokens to loyal customers, that could be redeemed with later purchases.
This was an early form of vouchering that quickly evolved into stamps, which could be exchanged for products in catalogues. By the 20th century, these vouchers were being printed directly onto product packaging. By the 1990s, retailers had the means to dispense magnetic cards. These provided an economical means of running a loyalty system – and they allowed retailers to monitor shopping habits far more easily, as every transaction was logged automatically.
Today, these loyalty-securing methods are more sophisticated than ever before. Much of this change has been effected by the rise of the internet, and by digital technology in general. But the seasonality of shopping has also played a big role in shaping the modern loyalty program.
The rise of Black Friday and Cyber Monday
Black Friday has, in the space of just a few years, gone from a niche American phenomenon to a global one. The sales are no longer restricted to a single day; they instead extend over the entire month of November. Of greater interest to online shoppers is Cyber Monday, when the world of e-commerce traditionally offers its discounts.
In practice, these two sales events have become blurred into a single large pre-Christmas giveaway, and an opportunity to drive sales in the run-up to the season of goodwill. As well as being a sales opportunity, they’re also an opportunity to revamp and relaunch a loyalty system. A sudden influx in registrations provides a valuable marketing opportunity that’ll persist into the new year.
Given the shift to online shopping, customers and retailers have to contend with shipping costs. Free shipping might be offered as a benefit to especially loyal customers – which fosters goodwill between customer and retailer.
Today, an enormous proportion of seasonal shopping is done on mobile platforms. And this habit is especially concentrated among the young, with millennials and gen-Z being more likely to make a purchase via their phone than their older counterparts. For this reason, the investment in a loyalty app can reap dividends. Customers can be encouraged to install the app in question through loyalty points, and the retailer can thereby secure a considerable competitive advantage.