Retail loyalty programs have continued to evolve. From big box to drug, retailers tend to maintain the same general “member-only benefits and deals” through their loyalty programs. What helps set retailers apart in this day and age is differentiation amongst these programs, especially in the light of the COVID-19 pandemic. Consumers are increasingly seeking accessibility and flexibility, along with a positive consumer experience and a touch of personalization. Brands that evolve with changing consumer needs will thrive in this space, in turn boosting consumer brand loyalty.
Loyalty Programs Across Retail Sectors
Big Box Retail – Walmart
Walmart’s latest rewards program, Walmart+, rolled out on September 1, 2020. This program provides in-store and online benefits, officially available to consumers on September 15 of last year. Walmart+ benefits initially included unlimited free delivery, scan-and-go shopping, and 5 cents off per gallon of gas, on top of the preexisting free curbside pickup and NextDay delivery. Within the past year, Walmart+ has added free shipping on all orders with no minimum requirement, as well as discounts on select prescriptions. These benefits build upon existing Walmart programs, such as the Delivery Unlimited subscription services and Walmart Pay. This new rewards program allows consumers to earn points and access deals conveniently and digitally, saving both time and money.
Apparel Retail – Gap Inc.
In late July of this year, Gap Inc. announced its new loyalty program “One Membership. Four Brands.” This program combined all previous systems and linked its four brands together – Gap, Old Navy, Banana Republic, and Athleta – under one system. Membership is classified through a tiered system based on spending, with Core, Enthusiast, or Icon levels. The “One Membership. Four Brands” program allows members to earn points easier and faster, with specialized perks and brand benefits. Notably, the loyalty program includes a “Do Good” portion that gives consumers the opportunity to donate points to one of five charitable organizations. These organizations are connected to one (or more) of the four brands in unique ways, and include brands like DoSomething.org and the World Wildlife Fund (WWF). This new loyalty program helps connect all four Gap Inc. brands under one rewards system, allowing all earned points to be in one, easy-to-access location.
Drug Retail – CVS
In 2001, CVS launched its ExtraCare rewards program. Like most loyalty programs, ExtraCare allows customers to earn points on their purchases while providing personalized and limited-time deals. This program has evolved over the past two decades, with its latest update put in place this past July. In June, CVS announced its plans to launch a new feature of ExtraBucks Rewards, now giving members their 2% back immediately after transactions. This latest upgrade rolled out in July, allowing consumers to earn on their app and online right after their purchase. Changes to the CVS app also complement this new feature, allowing consumers to view, manage, and transfer their earnings and deals to their ExtraCare card. This omnichannel experience gives consumers more flexibility with their earnings while maintaining the program’s key features.
The Latest Trends and Imperatives for Retail Loyalty Programs
With the pandemic accelerating – and in some cases sparking – a brand’s digital presence, understanding the importance of mobile apps and websites in loyalty programs is critical. The pandemic highlighted the importance of understanding consumer behavior and needs, and this brought a rise in accessibility and flexibility. As brands made an increasingly digital shift, several enhanced their loyalty programs as well. In a changing industry, remaining agile and innovative will prove key to success.
Focusing on mobile strategy, loyalty programs now concentrate on data and technology to further customer engagement and retention by analyzing spending patterns and increasing personalization. Understanding the needs and behaviors of consumers, brands will receive a higher return-on-investment (ROI) with clear results and opportunities for growth.
By enhancing accessibility and flexibility, brands can provide consumers with a quicker turnaround and more perks. Whether it be a new, one-stop platform, using points to pay for a purchase, or using credit to donate to the local community, meeting and exceeding these consumers desires will enhance overall retention and loyalty.
Final Thoughts on Retail Loyalty Programs
Brands can position themselves as leaders in retail loyalty programming by continuing to innovate, differentiate, and evolve. By understanding consumers needs and desires, brands can leverage these – accessibility, flexibility, and personalization – through a detailed mobile strategy. With the effective use of data and analytics, brands can therefore boost consumer experience and, in turn, customer retention and brand loyalty.
Subscribe to Clarkston's Insights
Contributions by Rachel Ruth