The retail landscape has been going through a lot of adventures and rapid changes over the ongoing year due to the consequences of the novel coronavirus pandemic. It showed a great deal of promise, growth and digitalization even before the pandemic, especially in the MENA region.
The GCC retail sector was forecast to grow to $308 billion by 2023 from $253 billion in 2018, according to a report published by VISA. The aforementioned report further noted that, “A sharp surge in digital adoption has revolutionized the online food delivery service sector in the GCC. Nearly 87% of food operators in the GCC are listed on food delivery apps and 60% of consumers use apps to order food.”
And again, this was all before the pandemic. The digitalization of retail only accelerated faster than expected and the disruptions that the sector witnessed made many of its inhabitant companies a lot stronger. And as is the case with many other industries, retail is struggling to fully grasp and keep up with the changing behaviour of different segments of consumers.
But where do customer loyalty programs fit in the retail picture?
The Opportunity
There is strong evidence that members of customer loyalty programs generate significantly more revenues for retailers when compared to non-members. Accenture’s United States-based research found that the members of customer loyalty programs generate 12%-18% more revenues for retailers than non-members.
When a customer is loyal to a brand – according to a 2019 global KPMG survey — 86 % will recommend it to their circles, 66 % will probably review it positively online after a pleasant experience, and 46 % will stay loyal even after a bad experience should the problem be resolved.
The Challenges
Companies in the retail sector are expected to spend more on loyalty solutions in the coming period. A new report published by Allied Market Research that, “The global loyalty management market was valued at $1,931 million in 2016, and is projected to reach $6,955 million by 2023.” This forecast was for multiple industries, among which are retail. This will lead to saturation in the marketplace of retail loyalty programs, which will necessitate more innovative programs and solutions for retailers looking to remain competitive.
Customers who identify as “highly loyal” are looking to be treated differently. A Capgemini survey found that 75% of its decent sample who identified as ‘’highly loyal” to a retailer in specific expected them to deliver a differentiated shopping experience superior to that of a less engaged customer.
Loyal customers won’t be forgiving if they faced problems that weren’t properly resolved. A Wharton Baker Retailing Centre and WisePlum study revealed just that as it analysed the effect of different factors on retail’s loyal customers before and after COVID-19’s shutdowns in the United States.
Recommendations to Boost Loyalty in the retail sector
Adopting a customer loyalty is a must for retailers. If the aforementioned challenges teach us anything, it’d be just that.
Minimize the problems your loyal customers face through working with the right customer loyalty solutions providers. With a company that has enough experience success stories in managing end-to-end customer loyalty solutions that utilize cutting-edge digital to technology, you’ll have a better chance at mitigating any negative experiences your loyal customers might face.
Resolving problems in your loyal customers’ experience is key. This was one of the Wharton Baker Retailing and WisePlum study’s findings as well. Resolving problems restores the loyalty lost because of them, according to the study mentioned above.
Digital is here to stay. Internet penetration and e-commerce are on the rise around the globe, so make sure your digital customer journey – especially for your loyal customers — is ready, streamlined and fulfil omnichannel expectations.
