There’s no question that rising prices have altered consumer behaviors. Whether they’re choosing lower-cost private-label items at the grocery store, cutting back on discretionary apparel purchases or spending less on electronics, persistent price increases are top-of-mind for shoppers across all retail sectors.
Our recent survey of North American, UK and APAC consumers — which is the basis of an upcoming Eagle Eye report — found similar trends globally: 61% of shoppers worldwide are using money-saving tactics like seeking out on-sale items and coupons more often. Another 58% said they eat and drink outside the home less often, and 46% are taking fewer vacations.
A basic supply-and-demand analysis of this situation would suggest that with a suddenly more price-sensitive consumer base, brand and store loyalty would diminish as shoppers seek out savings from any brand or retail outlet that will offer them.
Yet amid continued inflationary pressures that translate to higher out-of-pocket costs for consumers, the importance of offers, coupons and loyalty program rewards has never been greater. The question for retailers now is how to deliver those offers and loyalty benefits to shoppers in a way that supports sales volume, frequency and brand loyalty.
This might seem challenging, but it’s actually a massive opportunity.
Seizing the Moment
That opportunity lies in the retail loyalty program. Our survey found that 57% of global consumers actively use their loyalty program points to partially reduce or defray the cost of the items they buy online or in stores, including 63% of UK shoppers. Shoppers see the value in loyalty and demand it; 69% say getting value from their loyalty programs is their top priority. Among U.S. consumers, 33% joined new loyalty programs last year to save money, and 43% of UK shoppers use the loyalty programs they already belong to more frequently.
This has created a pool of consumers primed to be motivated by loyalty program initiatives. Fortunately, there have been advances in both digital technology and customer analytics that dramatically enhance a retailer’s ability to personalize promotions and deliver them through the loyalty program framework. This confluence of factors makes it possible to send valuable digital offers to retail loyalty program members in highly targeted, personalized ways that also incorporate added contextual dimensions to optimize and improve redemption and engagement.
This approach, which we call Marketing in the Moment, is how retailers can transform an environment that seems inhospitable to brand and store loyalty into an opportunity to engage shoppers more effectively and increase their lifetime value.
What is Marketing in the Moment?
Put simply, Marketing in the Moment is the next evolution in personalization and a way for retailers to connect with their customers using all the information available to them in the most effective way possible. From a more technical perspective, Marketing in the Moment is the ability to merge customer data and contextual data points (location, history, current activity, time, environmental cues, preferences and loyalty status) to deliver content (a personalized offer, promotion or message) to an individual shopper at the optimal moment to influence a purchasing decision.
To achieve that precision, the Marketing in the Moment model relies heavily on context-specific data. The first consideration remains the same — who the individual shopper is and what is known about them (e.g., when that shopper prefers to receive content). This profile and preference data can typically be harvested from retail loyalty program profiles and interactions.
Marketing in the Moment then factors in a range of contextual data from various sources surrounding that individual shopper, including first-party data provided by the shopper through the loyalty program or transaction history, environmental data like current weather and seasonality, location data and any other variables that are relevant to engaging with the shopper.
The “when” or “moment” to deliver content is crucial and is determined by the context. Triggered actions could include multiple messages, offers, loyalty updates or marketing communications delivered at different times across platforms like the loyalty app, ecommerce site or email.
Essentially, this is a simple model: customer + contexts = action. But what sets Marketing in the Moment apart are the contextual triggers, which consist of four groups:
- Environment: What’s happening around the customer that isn’t directly and obviously related to their shopping activity? Current weather, seasonality, sporting events and community events are all examples of what makes up the environmental context.
- Location: Where is the customer right now? They can be in a store, at home or on the subway. Knowing where a shopper is in physical space is a key contextual trigger, and it’s one too few retailers are taking advantage of today.
- Activity: What actions is the customer taking now? Do they have their loyalty app open to view their status or points balance? Are they browsing recipes or creating a shopping list? Retailers can use their existing loyalty programs to generate insight into this contextual factor.
- System: How does the customer interact with the retailer’s marketing platforms, and what is their status? Are they on the cusp of reaching a loyalty threshold, or have they recently redeemed points? Do they engage with the retailer over social media?
With all this contextual data available, personalized content can extend far beyond targeted offers and promotions, and the retail loyalty program can become much more than a vehicle for points accrual or a mechanism for collecting shoppers’ email addresses.
Marketing in the Moment’s Impact on Retail Loyalty in 2023
So how can Marketing in the Moment influence retail loyalty when (according to our survey) most global consumers think there’s room for improvement in their loyalty program experiences? In a word, relevance.
Put yourself in the shopper’s shoes: are you more likely to find value from an offer or marketing engagement that provides a discount or a bonus on an item you need or want at the precise time you need or want it? Or would you prefer a mass-appeal, one-size-fits-all promotion on a product or brand you’d probably never consider buying? Would you say the retailer that presented you with that offer really understands or cares about you as an individual shopper, and are you willing to reward them with your loyalty?
Our survey data provides that answer from the shopper’s perspective: 60% of U.S. consumers say it’s very or extremely important to receive offers from stores or brands tailored to their needs. An overwhelming majority of British shoppers — 88% — think receiving more personalized offers will help them save money. And 36% of global consumers would find it helpful to receive offers on or before their usual shopping day or be notified of promotions while they’re in the store.
That’s what Marketing in the Moment can help retailers do: demonstrate their ability to recognize each shopper as an individual, personalize their engagements based on their needs and desires, and deliver the value they crave.
As persistent price sensitivity continues to make the concept of brand and store loyalty seem tenuous this year, having the capability to be a relevant and welcome part of a consumer’s shopping experience can be an actual difference (and revenue) maker.
Now that’s an opportunity that retailers can’t pass up, and it’s why Marketing in the Moment’s moment is now.
Tim Mason is CEO at Eagle Eye. He joined as chairman in January 2016, moving to CEO in September 2016. Mason has over 30 years of experience in the grocery and retail industries and a strong background in strategic marketing and customer loyalty. Previously he was a managing director at Sun Capital Partners and is currently a non-executive Director at Gousto. Before that, he was Deputy CEO at Tesco from January 2010 to December 2012. Mason held several other roles within the Tesco Group, including CMO for Tesco and CEO of Fresh & Easy LLC. While at Tesco, Mason was instrumental in creating Clubcard, Express, Personal Finance and Tesco.com. He published a book, Omnichannel Retail – How to build winning stores in a digital world that was shortlisted in the Business Book Awards 2020.