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Study: 56% Retailers Want Mobile-Optimized Loyalty Programs by 2020

Thinking about launching a loyalty program? It had better be customer-focused and not just there for the sake of it, warned a recent report from Boston Retail Partners (BRP).

Enrollment levels in loyalty programs are at an all-time high, according to a survey of more than 10,000 consumers conducted by Bond Brand Loyalty, but BRP said many retailers are introducing schemes for the wrong reason—bragging rights, mainly—and not investing in a well-designed, multi-channel system that will encourage customers to come back in-store and spend.

The study, titled “Loyalty Programs—Rewarding the Customer Experience,” used data gleaned from 500 U.S. retailers polled in March and April and found that though loyalty programs were a top priority for 46 percent of respondents, 73 percent currently do not offer mobile-based ones.

Given that nearly 75 percent of the U.S. population owns a smartphone, a customer-loyalty program needs to be mobile-optimized. “This is certainly an area of opportunity for retailers in their quest to incent customers to opt-in to loyalty programs and communicate with these customers,” the report said, adding that 56 percent of those surveyed plan to participate in app-based loyalty programs within five years.

Sixty-two percent, meanwhile, are increasing their 2015 budgets to enhance existing schemes and supporting technologies, recognizing that one of the best ways to collect customer information is through a loyalty program.

“The ability to identify the customer as they enter the store—via their smartphone ideally—allows the retailer to personalize the customer shopping experience in real-time,” the report said. “Loyalty programs need to move beyond the traditional ‘earn points and receive rewards’ structure and play a key role in enabling the unified commerce experience.”