How loyalty apps are driving in-store purchases

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Let’s take a few minutes to pour over some beacon-related research that will help underscore just how important it is to connect the physical retail experience with your digital channels – particularly your mobile-based loyalty apps.

The world of loyalty cards seems like the preserve of gigantic chain supermarkets that have to compete viciously with each other in order to survive.

But thanks to mobile apps, the mass production of plastic cards and the huge infrastructure it takes to enable these vast data collection programmes no longer means loyalty schemes are just for the retail giants.

Every digitally savvy retailer, from an independent boutique to a small city-wide chain, can build a loyalty app that sits on your customer’s phone and offers great added value, for relatively little cost.

Of course the question is… why should I bother doing that?

Let’s look at the latest stats on customer behaviour in regards to loyalty and mobile apps.

Why should I have a customer loyalty program?

Okay, good question. Simply put, any loyalty programme is obviously designed to keep customers coming back to your specific store rather than a competitor’s. But say your competitor offers more convenience than you (it may just be that it’s closer to the customer), you’re going to have to offer something pretty special to make someone come further out of their way to your store.

That’s where a loyalty program comes in. And I don’t just mean points based systems that accrue meaningless general deals, but genuinely personalised special offers or cold hard money off.

Loyalty programmes work! Here are a few stats from Bond’s recent 2016 brand loyalty report:

  • 81% of consumers are more likely to continue doing business with brands that offer loyalty programs
  • 75% of consumers say loyalty programs are part of their relationship with brands
  • 73% of loyalty programs members are more likely to recommend brands with good loyalty programs

These are huge majorities of customers, all saying “yes, offer us a loyalty programme, make it worthwhile and we’ll come back.”

And it’s not just those of us who are used to carrying around loads of different, forgotten plastic cards in our wallets, younger people who probably don’t even use a wallet anymore use loyalty schemes too…

According to Blackhawk Network’s recent study on shopping habits:

  • 69% of Millennials belong to a retail loyalty program and 70% of those are happy with the program

And according to Software Advice the most important thing that will keep millennials using a loyalty program is the speed with which rewards build up (51%) and the variety of rewards available (38%). It should be worth noting that 50% of millennials stated they would quit a loyalty program because rewards took too long to accrue

The case for building a mobile app for your loyalty program

According to Google, 84% of shoppers with smartphones use their devices to help shop while in–store. But then, you don’t really need Google to tell you this. You already do it yourself. You’d be crazy not to! With huge improvements in mobile optimised websites and network connectivity, why not do 30 seconds of research while in-store to see if you can save some money elsewhere.

But it’s not just the mobile-web that shoppers are using, research from Apptentive carried out in July 2015 shows that a vast number of US consumers are using specific retail apps while shopping, which is helping drive in-store purchases.

  • 88% of respondents used retailer apps
  • 61% said they used them at least monthly.
  • 26% of the app-user population used retailer apps seven or more times per month
  • 71% browse retail apps before buying in-stores, at least once a month
  • 51% have used a retailer app while in store.

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But what do people want from a loyalty mobile app?

According to the Bond research we mentioned earlier, 77% of smartphone users suggested they’d like to see mobile-specific offers such as surprise points or rewards, exclusive content and special birthday messaging.

All of this adds to brand loyalty and all of this is achievable with the data you can collect on your customers.

And customers will of course carry on using your mobile app outside the store. The Bond research suggests that, 57% of consumers are interested in using their mobile device to check their points balances, redeem reward points (55%), find a location/store (54%), and browse reward options (54%) at home.

Ultimately this loyalty culminates in revenue. According to ABI research: 40.4% of respondents who had downloaded a retailer branded app said that as a result, they bought more of the brand’s products and services and 45.9% said the app caused them to visit the store more often.

Joining up your physical retail store with loyalty app

Of course all of these benefits to you mean nothing if you’re not benefiting your customers.

According to 2016 research from Revel Systems and Forrester 93% of executives agree that’ it’s important to integrate digital capabilities into physical locations to improve customer experience while 94% of retailers see in-store digital capabilities as important not only for customer experience but also for store operations.

But how can you achieve this?

How beacons can help you join everything up into one brilliant customer experience

Build that loyalty app, give it to your customers for free, and place beacons around your premises to trigger specific deals and helpful store advice.

Make the most of it by offering free Wi-Fi in-store, and don’t be shy about it either. Also do encourage your customers to enable their customer loyalty apps with simple guides. Promise that that the push notifications will be ‘worth it’ then prove it by sending a brilliant one-time offer when they walk into your store.

Use the data you’ve accrued about your app users to tailor genuinely helpful bespoke offers and offer true personalisation.

Make their shopping experience as pleasurable and fun as possible, while also being brilliantly helpful. They’ll not only come back to your store, but also use your app while at home too.

Pokémon GO, millennials and proximity marketing’s big breakthrough

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Don’t panic, that headline isn’t just an excuse to cram every marketing buzzword possible into one sentence. But unless you’ve been living under a Pokéstop, you’ll no doubt be aware that around 80% of the planet have recently decided to spend their spare time taking ten-mile hikes in search of imaginary monsters.

Pokémon Go is the world’s largest treasure hunt, and while it’s essentially pointless (If fun), it is doing something important. It’s making everyone who plays it realise that location tracking and Augmented Reality can both be done really well.

It may seem odd for a beacon company to be talking about a game that runs on GPS tracking, but actually there’s a huge amount of crossover here (although of course beacons do location better than GPS, not least because they won’t drain your battery in five minutes flat).

A new audience for contextual experiences

One of the most interesting aspects of Pokémon Go! is the audience it has attracted. In the recent past, businesses have become a little obsessed with the millennial market, and there’s good reason. Millennials are the forerunners of customer behaviours that are extremely valuable, but largely absent from older demographics.

This doesn’t mean that millennials are ‘just kids’ however. According to Vox, around 40% of players are aged 25 or over, with just over a third falling into the 24-34 age group.

The incredible rise of Pokémon Go is an indicator of changing behaviour on the part of consumers, but more broadly, it also shows that we are changing the way we interact with technology.

Pokémon Go is now loaded onto almost 6% (Approx 6.46m) of US Android phones. That makes it bigger than Tinder (Which has about 2% of the same market), and almost as big as Twitter:

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Via Business Insider

The only other tech with such a phenomenal rise in recent memory is the mobile phone itself (I’ve spoken about how this is already affecting your business before).

Changing user behavior

The important thing to consider though is that this is all new territory for users. Our devices may be digital, but we still interact with them in an analogue way. We pick up a physical device and (in most cases) hold it to our ear, or jab at the screen.

Pokémon Go is changing this. Users are suddenly aware that experiences can be contextual. That they are improved by being integrated into the physical world.

In many ways this reminds me of online publishing. A couple of years ago, online magazines were published as PDFs, or on platforms like Issuu. To read them, you would download a doc, and turn the ‘pages’ manually.

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Now look at more modern forms like Flipboard, Bulletin, or even the digital comic book industry. The analogue version is changing into a digital, contextual experience.

Users are now ready for communications that blend into their daily lives. Until recently, retailers using beacons have struggled as they try to get users to enable Bluetooth. Users are downloading less apps (but spending more time in the ones they do use).

Thanks to a little gamification and a whole lot of animated Pikachus, Pokémon Go has removed these friction points and allowed its audience to see the value of digital context.

What this means for marketing

So, what does this all mean for proximity? The important thing to remember here is that they enable hyper-local communication, are far more accurate and have a lower cost than GPS-driven apps, and we now have an audience that is not only willing, but actively embracing contextual communication.

The only thing for businesses to decide is whether they want to make the most of this opportunity, or be rushing to play catch-up with competitors in a year or two…