There is a growing trend for brands to create their own loyalty programmes, rather than sign up to coalition loyalty schemes, says Belinda Clark of RAPP UK

When Sainsbury’s announced it was buying Nectar from Aimia earlier this year, we all nodded knowingly. That made sense. As the retailer that issues the most Nectar points and provides the most rewards¹, it’s not surprising they saw value in owning the coalition, rather than merely being a part of it.

But when news broke that Avios.com would close on May 20^th, with Avios currency transferring across to the Executive Club², it signalled a clear change. And, of course, we can’t ignore the imminent merger between Sainsbury’s and Asda and what that means for its loyalty strategy – but we do know that there is a growing trend by big brands away from third-party-owned coalition programmes and towards brand-owned programmes.

So if brands (especially big brands) are no longer buying into coalition-driven loyalty, that raises the question: is there any future for coalition loyalty programmes?

Recent evidence would suggest, no.

Why? Because coalition programmes are not designed to drive loyalty to any one brand. They drive loyalty to the coalition at the expense of individual brand loyalty. Yet this individual loyalty is ultimately what brands are after, as it offers the best long-term value.

Coalition programmes have instead leant on the marketing potential from their massive customer databases. But many brands have found this access to be limited, too – limits that could deepen when GDPR legislation comes into force on May 25th – less than two weeks from now. While aggregate data, insight and trends are useful to a point, customers are demanding more than being treated in aggregate. And brands have responded by creating their own customer databases, which are arguably bigger and better than those available from a coalition.

Coalitions undoubtedly benefit the consumers who are members by allowing them to earn and burn points from just one programme. But as the value of a point begins to decline³, so too does a coalition’s popularity. Without value, the simplicity of earning and burning in one program simply loses its sparkle.

So what lessons can brands learn from coalitions?

When done well, brand-owned programmes can achieve many of the benefits of a coalition… and more. Yes, it will require investment, or a coalition purchase such as Sainsbury’s and British Airways have opted for. But this investment is in more than just a programme; it’s in your customers, your company’s data collection capabilities and your competitive advantage.

There are some simple tips for those running loyalty programmes:

OPTIMISE THE VALUE EXCHANGE
Coalitions were known for their no-brainer value-add. Over time this became a reason for customers to share their data; but while the value-add has eroded over time, the principle of offering a strong value exchange (namely, rewards for data) still holds true as it makes the exchange valuable for both sides.

TO REMAIN RELEVANT, ENSURE YOU REMAIN VALUABLE
For all customers, a valuable programme is one that offers something in exchange for their continued purchase. But as the point declines in value, so too does a programme’s popularity, unless it’s able to demonstrate value beyond just monetary terms. In the case of Nectar, this meant its alignment with Sainsbury’s and its ability to target their customers with personalised offers based on their purchases. Something which gave loyal Sainsbury’s customers yet another reason to shop.

SIMPLICITY, SIMPLICITY, SIMPLICITY
Coalition programmes that last get this one right every time. They offer a programme with a minimum of steps to join, participate and earn and burn. This familiarity of structure was key to their success because it meant customers knew what to expect without having to re-learn the rules every time.

But if brands are to succeed in a coalition-less world, they also need to go above and beyond this. They need to:

BE GENEROUS:
With much more than just their money – their time and people too. Because money doesn’t talk like it used to! Customers demand brands be generous with their entire offering in an effort to make them feel special and give them a reason to return again and again.

BE VALUABLE – AND MAKE PEOPLE FEEL VALUED…
To be valuable means to offer something that customers see real value in. While rational reasons like money are still core parts of this equation, to be a valuable programme means to give customers bragging rights (think myJohn Lewis…free coffee and cake anyone?). To make people feel valued, means to make the programme feel like it’s been created just for them – even if its offering is available to everyone (think Harvey Nichols’ complementary concierge service…yes please!).

DELIGHT WITH AN EXCEPTIONAL CUSTOMER EXPERIENCE…
A simple, seamless end-to-end customer experience is now expected as standard. To delight now means to make customer’s lives easier; to demonstrate shared values and to improve their experience not only with you, but with the environment and community you both live in.

The best of both worlds really is possible, as Sainsbury’s and British Airways will no doubt demonstrate in time. While coalition programmes used to make sense, they just don’t cut it in today’s world. And as Sainsbury’s and British Airways have now shown us, a new world is opening up. And that world just so happens to be owned and run by brands.

Belinda Clark is Senior Strategist at RAPP, a London-based integrated agency which is part of the Omnicom Group. Rapp works with clients including Rapp UK is based in London, working with clients including PayPal, Virgin Media, Mercedes Benz and Nestlé Waters.

Sources:

¹ Sainsbury’s buys Nectar rewards scheme from Aimia for £60m. The Financial Times. February 1, 2018 https://www.ft.com/content/584f106e-0766-11e8-9650-9c0ad2d7c5b5

² British Airways’ Avios scheme is closing down – here’s everything you need to know about your points. UK Business Insider. April 11, 2018
http://uk.businessinsider.com/british-airways-avios-frequent-flyer-scheme-closing-points-2018-4?r=US&IR=T

³Sainsbury’s Nectar point cut angers customers. The Guardian. 10^th April 2015. https://www.theguardian.com/money/2015/apr/10/sainsburys-cuts-to-nectar-points-anger-its-customers

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Upmarket Russian supermarket operator, Azbuka Vkusa, has launched a retailer loyalty scheme offering customers the chance to collect World Football Stars 2018-themed Top Trumps cards.

The promotion was created by retail loyalty specialist BrandLoyalty and games company Winning Moves, which owns the Top Trumps brand and licences it for bespoke promotions as well as for sale in retailers.

Azbuka Vkusa – which translates into English as ‘The Alphabet of Taste’ and which has been called the Waitrose of Russia – is rewarding customers with packs of four random cards every time they spend a minimum of 400 roubles. Shoppers can also buy collectors’ albums to keep and display their card collections.

Winning Moves worked with top UK and European football clubs, including CSKA Moscow, to bring together the collection of 96 leading international soccer stars.

Carl Cliss, Partnerships and Promotions Director at Winning Moves, says: “This type of promotion involves an enormous amount of time and effort, but when you see it come to life it is immensely satisfying – even more so with the promotion being selected to run in a territory where the Top Trumps brand is still relatively unknown. But that’s the beauty of Top Trumps – it’s a simple, straightforward game, with worldwide appeal and relevance.”

Winning Moves, which is a member of UK marketing industry trade body the Institute of Promotional Marketing (IPM), is a leading games company operating in UK, Europe, South Africa, North America and Australasia. As well as owing the hugely popular Top Trumps brand, Winning Moves has a license from Hasbro which allows it to create special versions of games such as Monopoly, Cluedo, Trivial Pursuit, Connect 4 and Guess Who, which are often used in promotional campaigns. Winning Moves has worked with companies including Shell, Sky News, McDonald’s, Kerry Foods, Ferrero, Mirror Group Newspapers, Singapore Airlines, BMW, Peugeot, BT TV, Hovis, British Gas, Merlin Entertainment, Metro Group, Cadbury’s, Nestlé Purina, Coca-Cola and Weetabix.

BrandLoyalty is a global leader in providing innovative, tailor made loyalty programmes for food retailers. Through a tailor-made, data and digital driven approach, it creates incentive-driven shopper loyalty programmes designed to drive immediate improvements in retail performance for food retailers worldwide. BrandLoyalty is part of LoyaltyOne, which also owns AIR MILES, Precima, ICEMOBILE and Colloquy. LoyaltyOne is in turn owned by Alliance Data, which provides the data and analytical support behind loyalty and marketing campaigns for more than 1,000 consumer-facing companies worldwide across retail, travel, pharmaceutical, financial services, auto and more.

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Benefit Cosmetics ran an activation at London’s Southbank Centre earlier this week featuring an Extreme Brow Bar – a cosmetics counter experience on a scissor lift truck which gave consumers the chance of a complementary brow wax, style and pamper brow 65 feet up in the air, with views over the River Thames and London skyline.

The Extreme Brow Bar was open for one day only as part of a promotional experiential activation to support the launch of GimmeBrow+.

Consumers with a problem with heights were offered the same treatment from the ‘BrowMobile’ brow bar on wheels, parked alongside the scissor truck.

Benefit is also running a 15% discount offer off any brow service or product for consumers who trade in their tweezers at any standalone Benefit Boutique until 22nd April 2018.

Benefit Cosmetics was founded in San Francisco in the 1970s, It now has 2,000 BrowBars in 41 countries worldwide and claims to be the world’s number one brow brand.

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Tim Eales of IRI looks at the implications of the massive fall in the number of price promotions in retailers

Increasing pressure on UK retailers to be more transparent in their pricing has seen pure price-based promotional activity drop to its lowest level for around a decade. For the retailers and suppliers involved in managing the fallout of these reduced levels of price promotions, the challenges are great.

For consumers who have become used to taking advantage of the numerous multibuys, BOGOFs and other special offers in store during their regular shop, the fact that there’s been a significant reduction in the number of items on discount in store might come as a bit of shock.

When it comes to price promotions, the most recent change we have seen in the industry is the direction encouraged by the Office of Fair Trading (OFT) back in 2012 when it set out its guidelines around the idea of pricing transparency. Since the demise of the OFT, many of its responsibilities have been taken over by the Competition and Markets Authority (CMA), including issues of pricing and how prices are communicated to consumers.

Back in 2012, the OFT raised concerns about prices being artificially inflated to make later discounts look more attractive, and stated that products should not be on promotion for longer than they are off promotion. This actually led to concerns by some retailers at the time that it would increase incidents of ‘yo-yo pricing’ rather than make it more transparent.

We’ve also seen pressures coming from other quarters, including increased competition from the main discounters, Aldi and Lidl, who have made it their mission to create a much more simplified approach to pricing than the major multiples, offering a limited range but at attractive low prices.

As a result, they have rapidly grown market share in the UK, forcing the supermarkets to rethink their strategy on ‘everyday low prices’, rather than simply relying on discounts and special offers to get shoppers through the doors.

According to a recent study by IRI on Price and Promotion (launched in August 2017), there was a 25% reduction in the number of items on discount since November 2012 (when the OFT guidelines were announced), with the proportion of items on price promotion as a percentage of all items stocked falling from 37% to 29%. The effect, it seems, is more pronounced in food categories.

During 2017, trade promotion levels were lower than they have for almost 10 years, while deal depth has been falling since early 2016. Shoppers effectively lost £3.7bn worth of offers.

This represents an 18% reduction in the overall benefit that price-based promotional offers have previously provided, although it has been offset to some extent by everyday (off-promotion) prices having been held lower than they would have been, or even going down in some cases.

For retailers and manufacturers, we are already seeing them pulling back from trade promotions, preferring to put emphasis on communicating the brand benefits rather than on consumer price promotions.

There is now increased competition for promotional slots and for off-shelf displays in stores, so in this climate of greater price transparency, it’s clear that brand owners need to know which categories are performing well and which aren’t, which deserve the highest levels of promotional support, and, most important, what effect different promotional strategies are having on different products.

The challenge of price promotions is not an easy one. It’s generally accepted that promoting products on price alone can drive short-term sales, but also eat into profit margins. Once the cost of discounts, displays and in-store marketing materials are taken into consideration, the positive effects reduce or even cease altogether.

However, there are other benefits, over and above driving short-term sales, including driving trial and penetration for both the retailer and brand, generating footfall for retailers, maintaining premium value positioning, and also augmenting the benefits of advertising, where this can be proven.

So, when prioritising promotional choices, retailers must look for categories where the effects from price promotions on the products promoted also result in a volume benefit for the category as a whole, delivering a win-win for both retailer and supplier.

Tim Eales is Strategic Insight Director of IRI, is a leading provider of big data, predictive analytics and forward-looking insights for FMCG, OTC health care, retailers and media companies.

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To celebrate Mother’s Day on Sunday 11^th March 2018, Thorntons has been giving retailers the chance to ‘Pass the Love on’ with its latest competition, offering them the chance to treat the mother in their lives to a spa day.

Hosted on brand owner Ferrero’s trade website, Your Perfect Store, all retailers need to do to enter is to visit the ‘Your Rewards’ page on Your Perfect Store, fill out the application form and tell Thorntons why (in no more than 50 words) the special mother figure in their life deserves a spa day.

The winner will receive a spa day for two, to make Mother’s Day special, as well as a spa hamper and box of Thorntons Continental. In addition, five runners up will also receive a spa hamper and a box of Thorntons Continental.

Levi Boorer, Customer Development Director at Ferrero, says: “With this competition, we wanted to ‘Pass the Love on’ to our valued retailer community and Thorntons Continental Collection is the perfect gift for the Mother’s Day occasion.”

The competition opened at the beginning of February and runs until February 28^th.

Ferrero is the fourth-largest player in the global confectionery market and has been present in the UK since 1966. Ferrero’s brand portfolio includes Nutella, Ferrero Rocher, tic tac, Kinder, Kinder Bueno, and Thorntons. Ferrero’s multi-million pound acquisition of Thorntons in 2015 was part of its continued investment in the competitive UK market.

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Independent shopper insights consultancy Shoppercentric has published its Shopper Stock Take Index for a third year, which reveals that 41% of consumers use store loyalty cards ‘a lot’ and 47% use them ‘occasionally’. Only 1% of survey respondents said they had never heard of loyalty cards.

However, Danielle Pinnington, Managing Director at Shoppercentric, warns: “Retailers and brands must keep a finger on the shopper pulse and appreciate that each customer is now using a range of strategies to cope with increasing pressures on household budgets. Which categories or sectors will suffer most this year is likely to depend on how they react to changing shopper needs.”

Pinnington adds: “With shoppers picking and choosing between stores for particular items based on their own experience of how well different retailers deliver, there is even greater pressure to differentiate and create memorable in-store experiences. Equally, avoiding or challenging misconceptions based on bad experiences has become more important. If, as our report shows, shoppers are actively widening their repertoires, loyalty as we used to know it is an outdated term.”

Shoppercentric collected more than a thousand online survey responses from shoppers, covering how they felt about the stability of their household budgets, how their shopping habits are changing, and what brands and retailers need to do as a result.

The 2018 Shopper Stock Take index reveals that while shoppers aren’t yet feeling the same pinch as in the worst of the recession, they are certainly starting to feel more pressure. Only one in four claims to be unaffected by the current economic situation, with a considerable proportion of UK shoppers having to make minor changes to spending.

The speed of change is rapid – just 12 months ago, the proportion of those making minor changes was just 16%, but today it stands at 44%. 26% of shoppers have noticed prices increasing a lot, and 56% have noticed small increases.

Shoppers primarily put these increases down to the state of the economy (54%) and Brexit (50%), although the exchange rate, cost of ingredients and greedy companies are also ‘blamed’ by a fair proportion of shoppers.

80% of shoppers are now “being careful to avoid waste”, while 75% are “avoiding being tempted to buy things I don’t need”. 50% are “going out of their way to find the best prices” and will “split shopping across different stores to get the best deals.” 60% are now buying “own label where I can to keep costs down” and 33% are now using “online shopping to check spending as I go.”

2017 saw a continued increase in the proportion of shoppers who had abandoned weekly main shops in favour of shopping little & often – rising from 11% to 16%. This year, however, there has been no change in that figure, suggesting this trend may have reached its ceiling.

Instead, shoppers are becoming more active as they make the most of the choice available. Shoppers’ average repertoire has changed to five stores or websites in the last fortnight, up from four in 2017. 26% of UK shoppers say that they fit their grocery shopping in where and when they can. 33% of shoppers switch stores based on what they need – to get the best places for what they want (versus 28% in 2017).

The biggest change in the five channels covered by the report was in the use of discounter stores – up 13% on 2017 figures to 57% of UK shoppers. Use of the Big Four supermarkets rose by four percentage points on 2017 figures to 83%. There was no significant change in convenience store or online grocery usage penetration – 49% and 30% of shoppers using those channels respectively.

With the exception of Smart TVs, all digital devices covered by this report saw increased usage by UK shoppers. Computers/laptops were cited as the most used touchpoint – up six percentage points on 2017 figures to 63%. In second place were smartphones with a huge 18 percentage point increase on last year to 45%.

Interestingly, despite a number of retailers and brands moving away from catalogues, usage by shoppers rose to 22%– up four percentage points on 2017.

There has been a seven percentage point increase to 58% in the number of shoppers that have been triggered to shop by content on their smartphone. Using a smartphone to carry out ‘research’ has remained on a par with last year at 61%. However, using the device to ‘find’ an item has risen from 56% to 60%, while the number of shoppers using smartphones to buy a product has gone up from 37% to 42% of shoppers.

However, despite the considerable shift in shoppers using their smartphones as they shop, particularly in relation to actual purchasing, there has been no increase in the uptake of mobile-based promotions, which remains at 20%.

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Every Sub made in Subway stores across the UK today (November 3^rd 2017) will trigger a 5p donation to a the Fare Share food bank charity, to help feed people in need.

The promotion marks World Sandwich Day and the fast food chain will also be handing out free Six Inch Subs to people who downloaded and registered the Subcard app by October 30^th. Anyone who did hit the deadline was rewarded with 500 points – the value of a Subway Sub – to spend today in store. If the points aren’t spent by midnight today, they will disappear.

FareShare has 20 regional centres in the UK focusing on providing nutritious meals to vulnerable people. Donations to the charity will be triggered both by purchases of Six-inch Subs and also by redemptions of the free sub offer both on World Sandwich Day and the day before.

All Subway Stores accepting Subcard are participating in the promotion.

Subway is the world’s largest submarine sandwich franchise, with more than 44,800 locations in more than 113 countries. It is a committed partner to the UK Government’s Public Health Responsibility Deal and is the only QSR to have endorsed eight of the nutrition-related pledges. The Subway brand has reduced salt, eliminated trans fats, displays energy information on menu boards, cut KJ/Kcal across the product range and increased access to fruit and vegetables as part of a balanced diet and reduced saturated fat.

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Shoppers are highly likely to boycott brands which run “promotions that aren’t as good as they sound” according to new research into how much UK consumers trust retailers and brands.

Nearly six in 10 shoppers (59%) cited disappointing promotions as a key irritant in future purchasing decisions, putting it top of the factors which put shoppers off retailers and brands.

The latest industry report from Shoppercentric, a leading independent shopper research agency, “WindowON…Trust Issues”, reveals high levels of cynicism and falling levels of trust amongst the UK population.

This could have dire consequences for brands and retailers, because shoppers are increasingly voting with their wallets:

• 36% of UK shoppers have ‘stopped buying a brand or using a company’ because they were uncomfortable with something they did or stood for.
• Having taken a stand in relation to one brand or company, 58% of these ‘boycotters’ said they were more likely to do the same again in the future.
• 41% of boycotters were 55+ compared to 34% of non-boycotters.
• 55% of shoppers always or frequently look for products that are transparent about their contents e.g. see thru packs/clear labelling information.
• 32% always or frequently look for products that demonstrate their ethical policies.

Danielle Pinnington, Managing Director at Shoppercentric (pictured), says: “Over the last few years, with the rise of social media and 24/7 news, it has become clear that consumers are increasingly aware of shortfalls in the behaviour of the companies they buy from… If consumers are as cynical as our research indicates, it highlights the need for brands and retailers to be more aware of how trust issues can develop and what they need to do to avoid this. There’s the potential for serious impact on businesses when trust issues lead to a negative change in behaviour, something retailers can ill-afford to happen.”

Nearly half of all UK shoppers – 46% – now fall into the cynical bracket, failing to agree at all with the statement that they are ‘trustful of others’. These shoppers are also less likely to agree that ‘most people are trustful of others’, ‘most people are trustworthy’ and ‘most people are basically honest’.

Trust is a major issue, as nearly three quarters (74%) of UK shoppers agreed that they ‘want to feel good about the retailers they use’ while almost the same percentage (73%) ‘want the money they spend to go to companies they trust’.

Shoppers rate corporate retailers and brands poorly in relation to putting consumer interests first, in comparison to other institutions and businesses.

Shoppercentric also asked people what factors irritated them most, drawing up a list of key irritants (those that scored 8+ out of 10, where 10 is annoying enough to not buy that product or use that retailer).

As mentioned above, ‘Promotions that aren’t as good as they sound, was ranked number one irritant by the most respondents, followed by so-called ‘shrinkflation’, where reduce their size or quality but keep the same price with 58%. In third place are retailers and brands who make changes which negatively impact shoppers but lets them profit on 55%.

Pinnington concludes: “The individual irritations may seem relatively harmless in isolation, but these can create real frustration and annoyance among shoppers. To see a considerable proportion of shoppers giving such high annoyance points for so many factors should be a red flag to retailers and brands. When all else feels equal, such as price, range and accessibility, it can be the sense of connection, or not, that can lead a shopper to remain loyal to their usual brand/retailer, or choose to go elsewhere.

She adds: “Our research implies that 1 in 3 UK shoppers have taken action – to shop elsewhere or stop buying a particular product so this willingness to act is not limited to a small minority. This is the context in which trust issues need to be viewed and unless retailers and brands understand the potential impact that trust issues – big or small – can have on shoppers, they run the risk of falling foul of shoppers who are increasingly aware, thoughtful and willing to act.”

The Shoppercentric report can be found here.

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New packaging technology is helping promotional marketers create even greater impact on the way people shop, says Chris Baldwin from Sodexo. PROMOTIONAL FEATURE

Technology is moving faster than ever with new ways to find, buy and redeem products popping up every day.

Not to state the obvious, but that makes technology more important than ever in driving a successful campaign — and brands who get on board with innovation can reap the benefits in terms of appeal and functionality. Great tech should make life easier, right?

Is there anything new about packaging technology?

According to the Savvy Cynics 2016 Consumer Promotions Survey Report, nearly 70% of people either look for, or are attracted by, promotional messages on product.

Clearly, on-pack promotions have traditionally played a huge role in promotional campaigns but the whole industry is now changing dramatically and with it come new packaging opportunities.

Retailers can tap into innovative packaging ideas, overcoming issues around space, design, and manufacturing to reach more customers and make an impact.

Augmented Reality – looking forwards, and up, and down….

A ‘newish’ way to take your conversation with customers to the next level is with Augmented Reality (AR). With AR, brands can boost an offer with loads of extra, fun content. Consumers simply use a zapcode to access more info from games – and competitions too.

Casper Thykier, co-founder of AR specialists Zappar, is a leader in AR technology. He says: “If you get the three Cs right, you get engagement and dwell time.”

In this case, the three Cs are:

• Context
• Call to Action
• Content

Thykier adds: “AR packaging is great for increasing frequency with your product and giving you rich data analytics, turning your physical products into a living, breathing multimedia channel you control.”

Some of the best examples in recent years include inspiration from traditional consumer promotions, fused with technology to appeal to the discerning 21st century shopper.

In 2011 Heinz used technology created by Zappar’s rival, Blippar, to grant access to a Heinz recipe book (which when you think about it is a surprisingly traditional offering.) By downloading the app and holding it up to a Heinz ketchup bottle, shoppers could view the recipes which appeared on pages as if they were on the bottle itself. Heinz used this to drive people to its Facebook page to access more content.

NFC Keeping in touch with your Customers

Near Field Communication or NFC for short is also allowing consumers to interact with brand packaging. By tapping their smartphones on the labels the tags transfer data between devices wirelessly and without data or internet required.

Potential brand applications are numerous, such as advertising, shopper activation and engagement and loyalty schemes.

Malibu recently used NFC technology to great effect as part of their #BecauseSummer campaign in September 2016. They encouraged consumers to tap the image of a Malibu sunset on select bottles, to gain access to exlusive content, as well as being entered into prize draws.

Let’s get personal…

Personalised experiences with brands have become easier than ever thanks in part to a rise in digital printing.

Brands such as Marmite, Coca Cola, Nutella and Vaseline have seized the opportunity to create fully bespoke personalisation for consumers and considering that the worth of the digital print for packaging market was valued at £10.5bn in 2015 and is expected to grow annually by 13.6% according to a study by Smithers Pira, I think we can agree this trend is set to explode in popularity.

Coca Cola’s ‘Share-A-Coke’ campaign which featured 100,000 of the most popular names printed on bottle labels around the world contributed to a 6.8% increase in Coca Cola’s global Facebook community, as well as boosting their index scores from 9.6 to 12.4 on the first day of the campaign alone.

So has digital printing reached its tipping point?

With so much potential in this approach to packaging, not to mention digital printing’s economic and speed to market advantages, it’s a proven way to engage with customers whilst remaining very cost effective, so it seems like a no-brainer to continue going forward.

As technology continues to advance and experiences with AR, NFC and iBeacon become more seamless, Global brands have an exciting opportunity to exploit ‘new-age packaging’ to create a new kind of customer experience that has a holistic focus on the creation of ‘marketing moments.’

Those brands able to find the right balance of brief, slick and seamless product interactions with their audience, will reap the most reward-  building trust, relationships and loyalty over time in the most fun way possible.

Chris Baldwin is Director of Consumer Programs at Sodexo. The Sodexo family, which includes the Promorati brands Protravel, Filmology, Fotorama and Entice, is Headline Sponsor of The IPM Awards 2017.

Fotorama, part of the Sodexo family has published a new eBook, How new technology is driving the promotional marketing industry, taking a closer look at the digital revolution and how it can help marketers influence shoppers.

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We’ve heard it all before – but, as we enter one of the most uncertain economic periods in recent history, rewarding customers for loyalty really is now more important than ever, says Chris Baldwin of Sodexo. PROMOTIONAL FEATURE

A loyal customer is more profitable and their value cannot be overstated; and, with so many new technologies becoming mainstream in 2016, there is a great foundation to build on and refine in 2017 when honing a strategy for loyalty.

Here are the five top loyalty trends of 2016 that should shape your strategy in 2017.

Personalisation

With 65% of marketers seeing loyalty schemes as an essential part of the marketing mix, retaining customers is imperative – and personalisation has a key part to play in keeping shoppers loyal.

Tesco have been doing it for years; you buy something in store and you’re offered Clubcard points on similar products.

As a more tech savvy generation takes over, this has evolved to include cookies and suggested ‘items to buy’ following internet shopping.

Brands need to take a leaf out of the retail playbook and take personalisation on board, making it a huge part of what they offer their consumers. Whether this is through a points system or through preferential treatment via a membership scheme or loyalty platform, it is important to remember that adding specific value to an offer makes it infinitely more attractive.

Be technologically advanced

These days, offering a coupon on promotional packaging is just one of the ways to offer consumers added value. Technology means there are now so many other avenues available to get in front of consumers.

Much of the new technology available to be used in promotions can be delivered via an app or smartphone camera, and that means that the speed at which redemption can be achieved is extraordinary.

Brands can deploy coupon and barcode scanning apps, which can recognise scanned receipts or QR codes displayed on restaurant tables offering instant-win prizes, or sophisticated 3D object recognition software which identifies products within the real world space and can then offer real-time sales promotions.

Travel experiences

Walk through any supermarket and you’ll find promotions offering luxury getaways and chances to win ‘once in a lifetime experiences’ on the shelves. With 75% of people saying they would be interested in entering a travel promotion, this trend looks set to continue. The idea of an experience as a reward isn’t new; in fact, research shows that Millennials prefer this type of reward over cash bonuses, so it is important the B2C market tap into this to reward loyal customers.

Travel is easier than ever before, and short city breaks can also hold appeal when it comes to rewarding loyalty. A price-sensitive choice becomes far less clear-cut when, for example, there is the option to renew your current insurance and potentially win a city break versus having to research a new provider for a minimal saving.

Instant rewards

Although we may have found them annoying at some point, no one can deny the effectiveness of text alerts from your favourite stores or push notifications direct to your mobile offering limited time discounts or exclusive prizes.

With Millennials coming into their own in the consumer market, the time is ripe for instant rewards. The Millennial generation question the traditional ways of doing things and are more willing to research for themselves. So for them, a push notification reminding them that their insurance is due for renewal, but with the added value of a downloadable £20 e-voucher is a very attractive prospect.

The gratification offered by an instant tangible reward helps to inspire loyalty in a generation often seen as frivolous. Marketers know that Millennials tend to have less loyalty to brands and will often chop and change to get the best deals, rewards and benefits. Therefore, it is important that rewards are not only personalised, but also readily and instantly available without the need for additional communications.

Retention is the new buzzword

On average it costs a business 5 to 10 times more to acquire a customer than it does to sell to an existing one and just a 5% increase in customer retention can lead to 25%-100% increase in profit. Current customers spend roughly 67% more than new customers so it pays to appeal to this demographic.

The autosave password function means that customers can return again and again to their favourite retailers making it prime space to host promotions rewarding loyal customers.

By encouraging customers to log in via a specific portal with enticing discounts and rewards for doing so, brands and businesses can reinforce brand recognition and loyalty simply by being convenient and offering added value. There is a great opportunity to create brand association every time they use the portal. For example, offering additional discounts on further products in the range or in partnership with other brands makes the reward not only more attractive but also more memorable.

The 21st century is fast paced, with older technology making way for the new, and a younger and savvier generation holding the purse strings. It’s more important now than ever before to keep rewards attractive for loyal customers. ‘Instantancy’ – the demand for instant rewards – and convenience are key aspects that will only become more prevalent going forward as we rely more and more on technology in our day to day lives.

The ways in which we access and interact with traditional consumer promotions continues to evolve at an alarming rate. However, with great change often comes great opportunity and the promotional marketing arena is no exception to this rule. In 20 years’ time, we may look back and regard this as the age of digital experimentation; but whilst there is so much new ground to cover, the chances for creative and exciting ways to interact with customers are yet to be fully explored.

Chris Baldwin is Director of Consumer Programs at Sodexo. The Sodexo family, which includes the Promorati brands Protravel, Filmology, Fotorama and Entice, is Headline Sponsor of The IPM Awards 2017.

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