COVID-19 has shaped a new customer experience as well as changed the loyalty program landscape.
No aspect of consumer life has been left unchanged in response to managing the pandemic. From reduced shopping hours to product choices, social distancing, mandatory masks and hand sanitising.
These are all changes people are willing to make in the interest of community health and personal safety. And they’re protocols that people expect (and demand) that businesses conform to.
How will you shape a customer experience that satisfies the post-COVID-19 customer? What does this mean for your brand? And what does this mean for your loyalty program?
How COVID-19 has changed customers' shopping and consumption habits.
Consumer behaviour has changed drastically in response to the pandemic and resultant lockdown. The pandemic is forcing a reassessment of values, habits and consumption patterns, many of which are going to stick around for a while.
Then there’s the host of other environmental and lifestyle changes that are also influencing consumers spending behaviours.
Some of the most common changes in consumers shopping and consumption include:
- A surge in e-commerce, which is set to remain the preferred shopping method beyond the pandemic.
- Preference for trusted brands. Particularly within specific product categories like cleaning products where 61% of U.S. consumers are likely to choose brand-name products over generic brands.
- A decline in discretionary spending. In the second quarter of 2020, there was a 10.5% drop in personal consumption in the U.S. The most significant declines have been health care, transportation services, recreation, travel and dining out.
- Larger basket and reduced shopping frequency. This is an effort to expose oneself less to the risks of contracting the virus.
- Move to shop locally. 56% of consumers are shopping in neighbourhood stores or buying more locally sourced products.
- The polarisation of sustainability. Consumers are limiting food waste and making more environmentally friendly, sustainable or ethical purchases.
Retailers need to adapt to cater for these changes in all aspects of their business, including their loyalty programs.
What does this mean for retailers and their loyalty programs?
Many retailers have recognised the importance of pushing aside growth in favour of customer loyalty, adopting a “we’re all in this together” mentality. Looking at consumer mindset shifts and adapting to create a customer experience, unlike anything seen in the past.
This mindset needs to extend to customer loyalty programs. Because, if not adapted to suit current consumer behaviours, they can very quickly become irrelevant.
A few significant changes in loyalty programs include:
- More flexibility. More retailers are offering flexibility on redeemable points by extending the expiration dates of loyalty rewards.
- More relevant rewards. Rewards are focused on what customers need right now, rather than on luxury items. Things like grocery discounts, access to streaming services or restaurant vouchers are much more relevant than travel rewards, for example.
- More ‘good deed’ incentives. With social justice causes in the spotlight more than ever, many loyalty programs are giving loyal customers the flexibility to donate their points and rewards for a good cause.
- Omnichannel rewards programs. The same rewards must be available whether you shop online or in-store.
- Monetary and experiential benefits. Customers are expecting benefits that combine both monetary and experiential features, like free shipping and returns. Experiential benefits are likely to rise in importance.
- Personalised experiences. Engaged program members expect their personal data to be used to create better experiences for them. According to the Bond Brand Loyalty’s Consumer Tracker study, member satisfaction increases 6.4 times when personalisation is executed correctly.
Engagement, fuelled by personalised digital interactions, is one of the most important metrics for successful loyalty programs right now. And while consumers are feeling anxious about finances and the state of the world, loyalty programs need to demonstrate care and empathy by adding a human element to all touchpoints.
Nurturing contactless loyalty among loyalty members.
“Contactless loyalty is the act of creating long-lasting connections with your customers and keeping them coming back to your brand – even when human contact is limited,” according to The Wise Marketer. It’s about adding a human element to create stronger connections.
Here are four tips for building contactless loyalty among your loyalty program members:
- Reduce contact as much as possible and ensure that your loyalty communications are driving awareness of the extra steps your brand is taking.
- Promote other methods for ordering and picking up. Consider offering soft benefits for loyalty program members: early/extended pickup, expedited check-out, enhanced returns, or free/discounted shipping.
- Manage inventory and resources. Use the loyalty data that you have available to ensure inventory is available throughout key shopping periods.
- Streamline your in-store pickup. Provide flexible options and clear directions for pickup, making sure the pickup experience is easy, builds loyalty and positions your brand as your customers’ first choice.
Retailers can easily go above and beyond their competitors to create a contactless experience while retaining the human touch required to maintain loyalty.
A loyalty program with benefits that matter.
Loyalty programs today are driven by activities that improve the customer experience, offering value in a way that speaks directly to the ‘new’ customer needs. Through understanding what is essential to customers, businesses can improve the customers’ experience, adding benefits where it matters to them most.
Consumers will remember how they were treated by the retailers that they supported during the pandemic.
Make sure that the memories are positive ones by changing the way that you interact with your loyalty program members. And if you need help with this, get in touch with a loyalty expert at Achievement Awards Group.