Omnichannel Loyalty 101: Definition, Benefits, Trends, and Examples
Omnichannel Loyalty 101: Definition, Benefits, Trends, and Examples
Now more than ever, ensuring customer loyalty is a challenge. However, with the use of omnichannel loyalty, retailers can increase customer retention by creating a high-quality shopping experience.
Creating meaningful touchpoints at as many steps in the customer shopping experience as possible is critical in executing a sound omnichannel experience. According to McKinsey, consumers are increasingly choosing retailers based on “ease and richness of end-to-end experiences.”
In part due to the long list of consumer behavior changes the pandemic brought with it, retailers are doubling down on creating the best omnichannel experience possible. Below, we walk through the what of omnichannel loyalty, as well as its benefits, examples, and how you can go about setting up your own strategy.
Table of Contents
- What is omnichannel loyalty?
- Traditional vs. omnichannel loyalty programs
- Benefits of omnichannel loyalty
- How to set up an omnichannel loyalty program
- Examples of omnichannel loyalty programs
What is omnichannel loyalty?
Omnichannel loyalty uses technology to provide a customer experience that delivers relevant offers at the right time. It’s a way for brands to interact and engage with customers regardless of when and how they shop.
Targeted real-time campaigns across channels make it possible to integrate all customer engagements and purchases into one streamlined brand experience. As a strategy, building loyalty through an omnichannel strategy can include both online and offline touchpoints.
Traditional vs. omnichannel loyalty programs
There are notable differences between traditional and omnichannel loyalty programs.
Traditional loyalty programs
With a traditional loyalty program, customers are rewarded for purchases they make in a brick-and-mortar setting. Its main focus is selling through one sales channel and rewards users with a points system that, once accumulated, may be redeemed for discounts or special offers. Some retailers go as far as offering tiered or VIP programs that customers can access for special rewards in the form of deals or discounts.
For example, Designer Shoe Warehouse (DSW) runs a traditional loyalty program that rewards customers with points for each purchase and includes reward tiers that buyers can use to make more purchases.
However, with traditional loyalty programs, retailers can’t do much more to expand their customer loyalty strategy. Traditional channels aren’t convenient anymore. As the retail market has become more competitive, loyalty programs have been challenged to step up their customer retention strategy.
Omnichannel loyalty program
An omnichannel loyalty program focuses more on customer engagement instead of simply creating point systems that encourage customers to buy more.
Omnichannel programs are more interactive. They can gamify the customer rewards experience in a way that encourages buyers to interact with the brand even if they aren’t showing purchase intent.
For example, customers can earn points by fulfilling specific tasks—taking surveys or rating products are all fair game here. Thanks to the ability to collect customer data across sales channels, retailers are able to deliver a personalized experience with more touch points through mobile apps or in-store purchases.
The discounts or special deals customers have earned through different sales channels can be applied once they do make a purchase. With an omnichannel loyalty strategy, members can engage with brands or make a purchase at any time from anywhere while their reward status is consistently tracked throughout all their devices.
A great example of an omnichannel experience is Sephora’s Beauty Insider rewards program. Loyal customers earn rewards by accumulating points based on a traditional point system. The best part? Members have a say on how they use their reward points. Points are redeemable for gift cards, special discounts, or even in-store beauty tutorials.
Omnichannel loyalty programs are more convenient. This is because they focus on developing relationships with customers and making them feel valued.
What’s more, customers who have an emotional connection with a brand have a three times higher lifetime value than those who don’t. That’s probably why customers spend more with omnichannel retailers than with traditional ones. Plus, it’s critical to note that customers’ needs are always evolving. With an omnichannel presence, retailers have a better chance of adapting quickly and capturing more market share.