Enhancing customer loyalty: Key advantage for mid-size retailers

Businesses have long recognised the benefits of loyalty programs in attracting and retaining customers.

Mid-size retailers, in particular, can leverage these programs to gain a competitive edge by enhancing customer engagement and driving long-term growth. According to Loyalty Now, implementing seamless and secure digital loyalty platforms is key to ensuring customer loyalty amidst evolving market competition and changing buying behaviours.

Anurag Vasisth, co-chair and group chief executive officer of Loyalty Now, emphasised that modern loyalty programs extend beyond merely offering points and rewards. "Loyalty programs have evolved to offer much more than points and rewards; they extend to experiential privileges, which can create ongoing 'money can't buy' value for customers and keep them engaged over time," he said.

Vasisth highlighted the importance of creating a seamless experience across platforms and payment methods to reward loyalty without causing friction, thereby securing long-term partnerships and fostering repeat business.

Mid-size retailers, hospitality brands, and service-based businesses are identified as prime candidates for end-to-end turnkey loyalty platforms. These programs enable businesses to incentivise repeat purchases through personalised discounts, exclusive promotions, and early access to new products or services. For example, mid-size retailers can reward loyal shoppers with tiered benefits based on their purchasing history, while service-based businesses can offer special incentives to long-term customers to encourage continued engagement.

Vasisth explained how practical implementations of these programs can be beneficial. "For example, a mid-size retailer could implement a loyalty program that rewards customers with discounts for frequent purchases and supplement it with money can't buy experiences to attract ongoing loyalty. These money can't buy experiences may include privileged access to new product launches, special events and special offers for key dates in customers' lives, further incentivising loyalty. This type of program encourages long-term relationships while reducing churn," he noted.

Additionally, the role of trust in loyalty programs cannot be overstated. Vasisth asserted, "Loyalty programs assist in creating deeper relationships by rewarding consistent engagements and fostering trust. This lets mid-size retailers remain competitive against both larger businesses and smaller, more agile competitors. However, loyalty is built on trust, and trust depends on security, making data security a non-negotiable aspect of any loyalty program. Customers need to feel confident that their personal and payment information is protected at every touchpoint."

Investing in secure loyalty platforms, especially those that are PCI-DSS Level 1 and ISO 27001-2022 certified, is crucial. Such platforms ensure the highest level of data protection, minimising the risk of breaches and reinforcing customer trust. According to Vasisth, this commitment to safeguarding data deepens client loyalty and engagement, as customers feel reassured that their personal and payment information remains safe.

Besides security, personalisation and flexibility are essential components of a successful loyalty program. A generic approach no longer suffices in today's consumer environment. Personalised programs, which offer tailored rewards based on specific customer needs and purchasing behaviours, help retailers build stronger relationships with customers. Loyalty programs are also a rich source of data, enabling retailers to gain insights into customer habits and refine their offerings to better meet buyers' preferences.

Retailers must also ensure their loyalty programs can adapt to changing needs and expectations. This includes integrating new payment methods, evolving with data storage requirements and regulations, and maintaining alignment with customer demands. Rigid systems risk alienating shoppers and falling behind in a competitive market.

Vasisth concluded by stressing the importance of adaptability in loyalty programs. "Personalisation, simplicity, and flexibility set a great loyalty program apart. Consumers are more likely to stay engaged when the program reflects their unique needs and preferences. A loyalty program that adapts to customer behaviours and needs while offering meaningful rewards will create deeper engagement and secure repeat business. This is especially important for mid-size retailers that want to differentiate themselves from competitors and build lasting client relationships."

"At the same time, loyalty programs must evolve with the shoppers they serve. A platform that supports diverse payment methods will ensure ongoing success. The right loyalty program can be a game changer; retailers that invest in secure, adaptable loyalty programs position themselves to retain customers, drive engagement, and remain competitive over the long term as market conditions evolve," he said.