Since the rise of e-Commerce 20 years ago, retailers have expected a breadth of customer-specific insights giving them a holistic view of the customer’s interests and purchase intent. This data surge born out of online shopping was promised to enable retailers to deliver smarter and more relevant brand experiences to consumers.
However, flash forward to today, and 94% of all retail purchases are still taking place at physical stores, meaning brands are working with considerably more unknowns than knowns. Although consumers are interacting with retailers across digital platforms like social and mobile, when the majority of purchases still take place in-store, it’s difficult for retailers to track which digital touch points led to that final in-store purchase.
Although retailers pour billions of dollars into digital advertising each year, with the 2018 digital advertising spend expected to reach $111.14 billion by the end of the year, retailers still have little to no visibility into whether their digital strategy is driving in-store purchases. And so the questions remain: How can brands connect the dots between a consumers’ offline behavior and their online presence to serve more relevant experiences and ultimately drive sales?
Making Mobile The New Face Of Loyalty Programs
Mobile, which travels with and engages consumers during the shopping journey, is starting to clarify this opaque picture, and it’s doing so with surprisingly little friction. In particular, app-based loyalty programs are one way retailers are using mobile to bridge the in-store and online divide.
Although the idea of loyalty programs is nothing new, retailers’ approach to these rewards programs is evolving rapidly. Historically, loyalty programs have been challenging for consumers to participate in and don’t leverage mobile effectively. Often, consumers have to proactively investigate their points or rewards totals via a clunky web site. When brands do communicate information like total loyalty points or rewards available to consumers, it’s usually through a cluttered channel like email or push notifications, where it’s likely to get buried.
While mobile’s influence on the consumer’s path to purchase has been on the rise since the advent of the smartphone, the application of mobile in loyalty programs is just recently seeing traction. For many retailers, their approach to discounts and rewards are still predominantly paper-based. For example, only one-third of consumers have used a smartphone application to get cash back on a purchase, while a whopping 71% of consumers report using a store coupon in the last year.
By making mobile the medium, retailers not only make their loyalty programs more relevant and easier for consumers to engage with, but mobile-based rewards programs also provide visibility into consumer behavior online and in-store. This allows retailers to see which offers are driving direct ROI and which in-store offers will resonate best. In fact, brands with loyalty programs have found that integrating them with a mobile app instantly creates more revenue opportunity, generating as much as 10X ROAS, as consumers with the app return to their stores more often and spend more per visit than those who don’t use the app.
Using Mobile-Based Loyalty Programs To Drive In-Store Purchases
Despite the doom and gloom surrounding brick-and-mortar a couple of years ago, it’s clear in-store will continue to play a vital role in the shopping experience. However, without the help of mobile, tracking what consumers buy offline, let alone delivering relevant ads against it, continues to be the Great Unknown for marketers. It’s one of the reasons consumers still get targeted with ads for products they’ve already purchased.
As brands continue to demand more visibility into traditional digital advertising methods and want to connect digital investment with in-store purchases, mobile-based loyalty programs will become the next iteration for brick-and-mortar retailers. Shops already doing this are tapping powerful behavioral data to solve issues that have plagued marketers for hundreds of years, while incentivizing consumers to engage and make purchases in the process through mobile-based rewards. These shops now have a better understanding of the consumer while bridging the digital and in-store divide.
While the industry increasingly moves to “people-based” advertising, and more and more retailers adopt mobile strategies to engage and track individuals with unique identifiers, retailers need to be armed with the right tools to deliver a cohesive, personalized brand experience. Rest assured, mobile is slowly chipping away at the unknowns of the consumer’s path to purchase, and the onus now falls on retailers to weave mobile into their loyalty programs, to deliver smarter, relevant brand experiences.
Brad Brodigan is President and Chief Operating Officer, Dosh. He works closely with retailers and merchants to transform the buyer-seller relationship and bring in new and lapsed customers. He came to Dosh after more than five years at PayPal, where he most recently led strategy, go-to market and operations for mid-market and retail. Dosh is an online to offline engagement platform with the fastest growing card-linked network.