Moving into 2023, there are many uncertainties on the horizon for consumers, and retailers are faced with inventing new ways to retain loyalty and encourage spending. Some of the major factors at play that retailers must consider are the recession, rising interest rates and gas prices, and the dissolution of third-party data.
Companies need to find new ways to capture complete shopper profiles without the data they have relied on for so long, and then entice those customers to spend more at a time when money is tight. Retailers and brands can — and should – take advantage of their loyalty programs to combat these issues. After diving into the up-and-coming trends in the loyalty program space, we will see that retailers are already beginning to do this by using some old tricks that have been revamped to fit modern-day needs.
2023 Loyalty Program Trends
Trend #1: The Rise of Zero-Party Data
With new privacy laws going into effect this year, browsers are beginning to limit the share of personal information for targeted advertisements. This year, Google announced its plans to phase out third-party cookies by the end of 2023. While Chrome isn’t the first browser to make this move, it may have the most impact due to the fact that Google Chrome accounts for over half of the global web traffic. While these efforts are a huge win for data privacy, brands now need to leverage other methods for data collection.
The best candidate to replace cookies is Zero-Party data. This is data that is intentionally and proactively shared by consumers, making it a much more trustworthy and accurate way to collect information. An excellent way to collect these types of data is through loyalty programs. An example of this would be shopper preferences that are shared when first creating a loyalty program account.
Companies can also use techniques such as quizzes, size calculators, and surveys to build a more comprehensive customer profile. Annmarie Gianni is a small skin care and beauty product company that built a customer loyalty program around rewarding customers who take their “What’s Your Skin Score” quiz. With the combination of the data collected from the quiz and the incentives offered to customers for completing it, Annmarie was able to generate $200,000 in revenue and 20,000 leads within two months of implementation.
While shoppers may be wary of sharing data at times, they’re more likely to do so if they feel there’s value in sharing it or there’s something in it for them. These incentives can be important, as can being transparent in what the data will be used for – such as personalizing recommendations or potential deals.
Trend #2: Cross-Brand Partnerships
In 2022, brands aimed to broaden their customer base by partnering together to offer rewards across platforms. That trend is continuing into 2023 with retailers partnering to expand the scope of their loyalty programs drastically.
A fitting example of this is the partnership between Dick’s Sporting Goods and Nike. A benefit of this partnership is that customers can now link their Nike Membership account to their Dick’s Scorecard to earn additional loyalty incentives online and in-store. Brands can increase engagement and loyalty by offering exclusive benefits for purchases made through retailers, and, in turn, retailers can increase overall sales. Meanwhile, both parties are gaining insight into customer demographics and buying patterns, which makes this a strategic move going into a cookie-less future. Another example of this trend is the partnership between Amazon and Kohl’s that was launched in 2019. Amazon customers are now able to return items to Kohl’s stores, which has increased foot traffic in Kohl’s, especially from the younger generation. Continue reading by downloading the full report below.
Read last year’s Customer Loyalty Trends Report here.
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Contributions from Cathryn Cohenour