Home > Uncategorized > 62% of retailers increase loyalty program budgets

62% of retailers increase loyalty program budgets

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By Jacqueline Renfrow Comment | Forward | Twitter | Facebook | LinkedIn

As many as 62 percent of retailers have increased their budgets for loyalty programs in 2015, according to a special report by Boston Retail Partners. In addition, 46 percent of retailers say loyalty programs are a top priority.

Loyalty was the second most important priority for retailers in developing a relationship with customers, only behind customer experience and engagement, which was ranked first for 74 percent of respondents. In a recent Euclid Analytics study of the first half of 2015, loyalty was down in general for all consumers.

“One of the best ways to know the customer, reach the customer and deliver the right shopping experience is through a loyalty program,” said Ken Morris, principal, Boston Retail Partners. “Offering customers exclusive perks, relevant incentives and personalized rewards encourages them to identify themselves while shopping and allows the retailer to further tailor the experience.”

Surprisingly, 47 percent of those surveyed did not offer customers any sort of loyalty program—a loss for retailers as one-third of shoppers say they would not be loyal to a brand if it were not for a loyalty program, and 70 percent were willing to change when and where they shop to maximize points.

Loyalty is a big incentive, especially for millennials, who are willing to pay for a loyalty program membership, according to a recent LoyaltyOne survey,

In addition, very few retailers currently have the ability to identify a customer via smartphone as they walk in the store, which in turn enables the retailer to personalize the shopping experience for that specific shopper. However, 53 percent of respondents said they will implement this technology in the next five years, which is a 883 percent increase.

Of those that are currently offering loyalty programs, 12 percent are giving personalized offers, while many still rely on traditional coupons and discounts. Although gamification is not yet huge, use is up 31 percent this year from 6 percent last year, and 181 percent of retailers planned to increase the use of this loyalty platform in the next five years.

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