Inside Retail has partnered with Capgemini Australia to produce a loyalty report that examines the viability and effectiveness of retail loyalty programs in Australia.

Octomedia is currently offering the 2015 Capgemini Loyalty Report powered by Inside Retail as a free download to retailers and Inside Retail readers to help them understand how their loyalty programs can be tweaked for better outcomes.

Below is an extract from the 32-page report – have a read, then click on the link below to download a copy of the report.

Loyalty programs for many retailers are a means of identifying valuable customers to drive profitable behaviours and cultivate long-term brand affinity. To consumers, however, these programs are increasingly seen as transaction-based discount schemes, and as their expectations evolve, these points-based reward schemes are losing favour.

Findings from a global study by Capgemini substantiate this, with 90 per cent of social media sentiment towards loyalty programs being negative. The key reasons for this are that consumers believe most loyalty programs do not provide value, are not integrated across the channels they shop, and provide poor customer service.

While most loyalty programs fail to excite the consumer, the study did identify several organisations that have achieved success with their loyalty programs. Common themes across these programs are that they focus on engagement; integrate into and enhance the overall customer experience; align with and promote the brands’ value proposition; and reward the consumer with relevant offers.

These programs utilise digital technologies to engage with the consumer at every touchpoint, providing an integrated shopping experience across different channels and are winning with consumers.

How do loyalty programs in Australia fare?

To understand how these global themes apply to our local market, Capgemini Australia, in conjunction with Inside Retail, studied the loyalty programs of 40 leading Australian retailers. We also engaged a panel of judges who could provide a different perspective and a different context.

Following much debate and discussion, we concluded that loyalty programs in Australia are representative of the global findings. They are highly transactional discount programs, rather than long-term loyalty programs.

Leveraging customer data to personalise offers, alignment of the program to brand value, and integration of the program across channels, is limited. We recognised that establishing a Single View of Customer (SVOC) across channels was critical and there was little evidence that many retailers had achieved this. We also noted that for the most part it was difficult to differentiate between the loyalty programs of the retailers we studied.

But it’s not all doom and gloom. We found pockets of excellence across the retailers assessed, and agreed that progress was being made. Our combined knowledge of the sector clearly identified that retailers were allocating resources to creating a SVOC, and this priority for many retailers in 2015 would continue into 2016. We identified retailers who are making significant advances in how they use data driven insights to engage the Australian consumer with relevant and personalised offers.

We found that many of the more established retailers were either reassessing or re-launching their programs based on a growing understanding of their customers needs and wants.

We agreed that several specialty retailers offered loyalty programs that were aligned with the brands’ value proposition and the programs extended beyond rewarding transactions to creating a greater bond with their customer based on a shared passion.

These retailers have been recognised as leaders in this loyalty report and we congratulate them.

As the market continues to evolve and the influx of international retailers continues, we watch and wait with much anticipation on the future of loyalty programs in Australia and the continuing journey for retailers to grow their engagement with their customer. 

Download the 2015 Capgemini Loyalty Report powered by Inside Retail for free now!

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