WGSN | Loyalty Marketing 2020
Beyond the overarching trend of digitisation, this report highlights how brands are building closer bonds with current customers using CRM systems to enhance user loyalty through improving service quality, new technologies such as Blockchain and extensive rewards
WGSN Insight Team
10.20.20 · 7 minutes
title
Bitshorts
Analysis

In 2020, loyalty marketing becomes a priority for brands as many struggle to retain fickle, hyper-informed and resourceful consumers who are actively trying to cope with the disruptive effects of the pandemic.

Brand Keys' Loyalty Leaders September 2020 survey found that 20% of brands are new to this year’s top 100 list, making it the most times newcomers have infiltrated the survey in one year in its 24-year history. Further illustrating Covid-19's damaging impact on brand loyalty, a majority of the positions of the remaining 80% had significantly shifted towards other brands on the list.

Pressed by the digital spend migration and the economic challenges currently affecting consumers and retailers alike, the priority for many businesses has been to transition away from conventional loyalty programmes and develop and diversify digital and truly special loyalty schemes. A report by Juniper Research shows that membership to loyalty programmes with digital components, particularly mobile-based elements, will increase worldwide from 37bn in 2020 to 48bn by 2023.

As global markets become increasingly commoditised, adopting digital loyalty solutions is a key differentiator. While enabling brands to leverage participating consumers' data to customise products, services and marketing campaigns, it also improves user experience by making it more seamless and secure.

Beyond the overarching trend of digitisation, this report highlights how brands are building closer bonds with current customers using CRM systems and building out ecosystems that enhance user loyalty by improving service quality, and securing new consumers via new technologies such as Blockchain.

Jayson Keeling

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Brand case studies
@nikesportswear

Nike

Nike’s China-based programme focuses on giving away value well beyond its core products, driving cloud and culture. Leveraging local platforms such as WeChat, the brand's scheme offers value propositions centred around performance tracking, training and nutrition content, and events with professional trainers.

Emirates

Emirates

Boasting 27 million members worldwide and nearly 200 partners, Emirates Skywards recently marked 20 years. During Q1 2020, the company introduced personalised offers integrated within the booking flow, an industry-first loyalty benefit, and launched skywardsmilesmall.com, which provides users new ways to earn miles by shopping online.

StormX

StormX

The gamified shopping loyalty platform is at the forefront of the emerging cryptoback trend, coined the 'cashback for the digital age'. With up to 87.5% back in some cases, StormX offers some of the most generous percentage rebates on the market for shopping at thousands of online stores.

@indie_lee

Indie Lee

Indie Insider Rewards, which launched in August 2020, moves beyond the points-for-purchases model. In addition to standard offerings, members can earn points for following the brand on social media and potentially for commenting, liking posts and submitting user-generated content.

Maldives

The Maldives

A first in the world, the country announced in September 2020 a three-tier loyalty programme. Enrolled visitors will earn points for each border crossing and can earn additional points for visits on special occasions. Once tourists reach a certain number of points, privileges are rewarded.

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Blockchain-powered platforms

As traditional loyalty programmes involving physical cards become increasingly obsolete, Blockchain-based reward programmes present new opportunities for customer engagement.

From decreasing system management expenses to making transactions safer and more real-time, the incorporation of Blockchain technology is shaping future customer fidelity.

In October 2020, Singapore Airlines (SIA) updated its Kris+ reward app's interface and user experience as part of the company’s ongoing strategy to expand non-airline revenue streams. This enabled SIA to personalise offers and recommendations based on the location and interests of its customers. Building on its existing Blockchain-based loyalty wallet, KrisPay, the Kris+ ecosystem was designed to provide users with more in-app payment options and to enhance customer-merchant relationships, namely by leveraging 150 partners and increasing the utility of loyalty points. The app has been downloaded over 130k times at the time of publishing.

In May 2020, Blockchain rewards platform MiLk partnered with Korean luxury retail outlet Shinsegae Duty Free (SDF), offering loyalty points. Following the system integration, Jayden Jo, CEO at MiLk, announced that millions of customers throughout Asia could trade their SDF points for its in-house MLK cryptocurrency while also gaining access to the company's expanding ecosystem of vendors. As MiLk continues to build an integrated loyalty network across the lifestyle, leisure and travel sector, its ambition is to eliminate flaws associated with legacy systems and to minimise the waste of rewards points.

MiL.K

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Hyper-personalised help

As companies continue to develop customer acquisition and retention strategies, new technologies offer resourceful ways of personalising marketing, products and services.

By using advanced automation to collect and agency customer data, brands are taking customised loyalty programmes into new digital territory.

As part of its mass personalisation efforts, Walgreens Boots Alliance (WBA) will relaunch its customer loyalty programme in November. Dubbed myWalgreens, the programme benefits from the retailer’s recent decision to move its IT resources and on-premises applications to a cloud platform. This will allow the company to refine targeted interaction, further identify user preferences and strategically adjust output. Beyond simplifying how its 100 million existing loyalty members manage their rewards, myWalgreens will also focus on wellbeing with personalised content, services and offers.

Similarly, in its aim to bring more Chinese consumers into its loyalty programme, Dyson has been successfully developing a sophisticated CRM-based aggregation system. The company strategically collects registration information by labelling all products sold in China with unique QR codes that customers must scan to activate their warranty. Once processed, the harvested data then enables the company to segment its customers for analytics tracking, tailored loyalty and promotion campaigns, cross-selling as well as granting personalised offers and product reminders. The brand recently created a referral rewards campaign, offering users customised offers they can extend to friends and family members.

Walgreens

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Fitness-powered rewards

As an alternative to anchoring loyalty programmes in behavioural economics, some companies have designed their schemes to reward health-seeking activities.

Discovery Health’s Vitality programme, which originated in South Africa, brings together micro-incentives and gamification to encourage behavioural change. Vitality users input and track their efforts through the app-based interface and are rewarded for achieving goals by exercising, eating healthy, scheduling preventive screenings and even driving safely. As members earn points and improve their Vitality Status, they access vouchers, benefits and discounts for leisure and travel activities with the likes of brands including Virgin Active, Planet Fitness, Apple, Emirates and Qantas. Users can also donate to charity initiatives via the Vitality MoveToGive component.

Recently reaching a milestone of over 10 million Vitality members in 22 markets, the company actively adapted to Covid-19's impact by adjusting its points-earning structure and reward categories. Vitality's app was updated with various channels, including Home-Workout, Nutrition and Mental-Wellbeing. Other key updates included new healthy convenience meal rewards and a partnership with Nike, which enabled members to benefit from Nike Concept Stores.

Along the same lines, social media platform Strava and British cycling clothing brand Le Col rolled out a new beta Rewards For Riding programme in August 2020. Setting challenges that reward performance, the scheme allows cyclists across the globe to earn points for every kilometre the person has cycled and to access discounts from the brand's range. A beta 2.0 test is already underway and will add enhanced reward points for Strava subscribers with every ride uploaded.

Vitality Active Rewards

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Extended partnerships

With consumers expecting a benefit in spending options by taking part in a loyaly programme, brands have been building out ecosystems through new partnerships with other vendors and services.

Hyundai's Mobility Membership programme, which the automaker introduced in India during August 2020, boasts partnerships with numerous domestic brands, including Shell, JK Tyre, Revv, Sterling Resorts and Avis. The app-based loyalty scheme is designed to give users access to discounts on a variety of services and products ranging from subscriptions and car rentals, to hotels and exclusive dining experiences.

In June 2020, instalment payments platform Klarna, which recently reached eight million customers, launched its no-fee loyalty programme, Vibe. Partly driven by ongoing customer feedback, the programme addresses user discontent regarding spending limitations and the confusing navigation of conventional loyalty memberships. Identifying value in a model which enables customers to spend their reward points at multiple retailers, Klarna partnered with the likes of Toms, Rue21, Asos, Sephora and Uber.

Similarly, Alibaba recognised that by partnering with other digital service providers, the company could grow its own loyalty programme ecosystem, simultaneously favouring customer acquisition and retention by providing its everyday users with a self-contained, comprehensive network of apps. As part of this continuing strategy, Alibaba announced in August 2020 that the members of its 88VIP loyalty programme would be given free access to Netease Cloud Music's song catalogue. The Chinese streaming service, which has over 800 million registered users, is the first company outside the Alibaba family to partner with 88VIP.

Hyundai

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