TECHNOLOGY

Study: Loyalty program experiences falling short

BY By Deena M. Amato-McCoy

Despite increasing loyalty program membership enrollments, retailers continue to miss opportunities to satisfy shoppers.

Brands continue to invest more in loyalty programs, and enrollment has grown by 31% over the last four years. However, retailers are overlooking opportunities that will drive business results, according to “The Loyalty Report 2017.”

The report, from brand loyalty agency Bond Brand Loyalty and Visa, captured responses from more than 28,000 consumers in the United States and Canada. Data revealed that the average number of programs a consumer belongs to grew to more than 14 from 10.9 memberships from just three years ago, yet members actively engage with only half of those memberships.

Program member satisfaction remains steady year-over-year (YoY) at about 46%, highest among payment cards and retail such as gas/convenience, grocery and warehouse. It is lowest in telco services, apparel, automotive OEM and services and consumer packaged goods—though they hold great potential, except for coalition, the study revealed.

Marketers are spending more to maintain program member satisfaction, and 81% of consumers agree that loyalty programs make them more likely to continue doing business with a brand. Same as last year, 76% of members said that programs are part of their relationship with brands, and 67% of consumers modify the brands they purchase to maximize the benefits they earn.

However, only 22% of members said they are treated better than customers not enrolled in the program. Within this 22%, overall program satisfaction is 3.4 times higher than those who do not sense that they are treated better as a member. Yet, 57% of members do not know their points balance, and 38% are unaware of their points value.

Meanwhile, 27% of program members said they have a consistent experience across each point of interaction with the brand (e.g., online, by email, by phone, in person), and only 3 in 10 members strongly agree the loyalty program experience is consistent with what they have come to expect from the brand.

Digital influences are also playing a bigger role in loyalty programs. Online enrollment accounts for more than one-half of new memberships, and 57% of members want to interact with loyalty programs via mobile device. However, 52% of members don't know if an app exists for their programs, the report revealed.

When it comes to redemption, redeemers are twice as satisfied with loyalty programs as non-redeemers; yet more than one-fifth of program members have never redeemed rewards. The redemption experience—the anticipation of reward, as well as ease of redemption—is also more important than the actual reward.

Redemptions most impact satisfaction in drug store retail, where 41% more redeemers than non-redeemers are satisfied. Conversely, redemption is driving the lowest difference in satisfaction in consumer packaged goods, co-brand airline, private-label credit cards and bank branded points programs.

"Today's hyper-informed consumers expect personalized and shared interactions delivered through a combination of human and digital experiences,” said Bob Macdonald, President and CEO of Bond Brand Loyalty. “By engineering the program with every asset of a brand's loyalty ecosystem and making adjustments to differentiate the member experience, brands can improve engagement and substantially increase program performance for gains in lift, retention and lowered marketing costs."

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TECHNOLOGY

Report: Facebook caters to hungry members

BY CSA STAFF

There’s a new Facebook service that users are sure to “like:” mobile food ordering.

Rolling out to select users, Facebook’s new “Order Food” option can be found on its navigation menu — both online and mobile app. The service aggregates all supported restaurants together on one page, making it easier for Facebook users to place orders with their favorite restaurants, according to TechCrunch.

Here’s how it works: After locating a colorful hamburger icon on desktop or a blue-and-white hamburger icon on the mobile app, Facebook users click on the image to see a list of restaurants. All entries include a featured photo, price range (indicated by dollar signs), star ratings, and type of cuisine. Listings also display whether delivery, pickup or both are available.

Similar to ordering directly from the restaurant’s Facebook Page, users click “Start Order” to begin the ordering process. After making a mobile payment, a confirmation screen appears and shoppers also receive an email confirming a time frame when the order will arrive or be ready for pickup, according to the report.

The service is supported by two delivery platforms. delivery.com is an online platform and suite of mobile apps that enables users place on-demand orders from local restaurants. The other, Slice, is an online app that connects users with their go-to pizzerias, the report detailed.

Click here to read more.

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TECHNOLOGY

Study: More pet owners are shopping online

BY By Deena M. Amato-McCoy

Online retailing is changing the game for pet parents.

Specifically, 40% of pet owners are opting to buy pet products online, up from 37% the previous year, and notably higher than results from 2014, according to U.S. Pet Market Outlook, 2017-2018. The report, from research firm Packaged Facts, highlights mergers and acquisitions, retail channel trends, and pet owner demographics and spending habits.

According to Packaged Facts, a large percentage of pet product sales growth is online. Not only are higher numbers of consumers buying pet goods online, but they are spending more of their pet product dollars online. Further, an ever-increasing number of consumers agreed that they purchase pet products online more than they used to.

“E-commerce has accelerated its shift from being a Wild West boomtown toward becoming the market's retail California," said David Sprinkle, research director, Packaged Facts.

One factor spurring this growth is an increase in merger and acquisition (M&A) activity since 2016. This includes Mars' purchase of VCA Inc. and other veterinary practice consolidation; PetSmart's acquisition of Chewy.com, and Walmart's acquisition of jet.com. Each deal has contributed to the structural remix of the pet market, the report revealed.

“Brick-and-mortar retailers and manufacturers are scrambling to regroup to avoid losing ground. Retailers are adapting to compete with the Internet's—specifically Amazon's—ballooning strength in pet product sales,” Sprinkle said. “Brand manufacturers are adapting because their entrenched lock on shelf space is increasingly irrelevant for shelf-stable online purchasable products such as dry and canned pet food or cat litter.”

To compete, traditional retailers need to step up their game beyond beefing up their own online presence. For example, specialty pet superstores, such as PetSmart and Petco, are capitalizing on their established relationships with customers who know what to expect from the in-store experience and from the services offered there.

A critical differentiator for pet specialty stores are non-medical pet services, such as grooming, boarding and training. Indeed, as premium products have become increasingly available online, services are what make pet specialty stores stand out, according to Packaged Facts.

Supermarkets are also fighting to retain their share of the pet market against pet superstores, discount-driven Walmart, and of course, online retailers. Supermarkets are increasing the size and scope of their pet care departments, sponsoring pet contests, running promotions with animal rescue groups and even filling pet prescriptions at stores with pharmacies in an effort to lure pet owners into the store, the study said.

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