3 Loyalty Tools for Creating Year-Round Retail Customer Engagement
Most retail industry forecasters are predicting that 2025 will be a year of growth for the sector, including Deloitte, which recently projected a 3.1 percent increase in consumer spending over the next 12 months. But as with any broad-based metric, the benefits of that growth will be distributed unevenly. How can retailers ensure that they're consistently capturing their customers’ wallets — and their year-round attention?
They can start by honing three critical tools that are likely already in their loyalty toolboxes: personalization, gamification and artificial intelligence.
1. Personalization to Drive Frequency
Retailers have long sought to improve their personalization efforts to win customer loyalty and grow their share of spend; relevance is king. Loyalty programs provide the raw data needed to run advanced analytics which can produce personalized product recommendations, offers and information to individuals. When done right, we know that personalization is a proven route to growing brand advocacy.
Take Loblaw, Canada’s most prominent retailer. Its loyalty program, PC Optimum, is a data engine that drives the retail brand’s personalization efforts, connecting customer data across every customer touchpoint and enabling Loblaw to deliver incentives that issue points and discounts based on individual shopper behaviors. By “seeing” and connecting with customers as individuals instead of traditional marketing segments or personas, Loblaw has driven increased engagement, provided a significantly enhanced customer experience, and grown its revenues and profits.
Loblaw isn’t an isolated example; Forrester’s report, Use Personalization to Activate Loyalty Program Value, found that retailers that use advanced personalization tools like next-best-offer decisioning and journey orchestration can better predict what customers want next and create more engaging shopping experiences to drive both frequency and overall financial performance.
2. Gamification to Encourage Discovery
If advanced personalization can help increase frequency and spending, gamification also taps into consumers' appetites for interactive and goal-driven experiences to achieve different benefits. When done right, gamification can add a sense of fun or novelty to the shopping experience, keeping customers engaged, driving incremental sales and increasing average basket size. The keys to effective gamification strategies are getting (and keeping) customers behaviorally invested and rewarding them with real value.
When integrated into an existing loyalty program, gamified initiatives (like Tesco’s Clubcard Challenges) encourage new product discovery and can extend typical redemption cycles, driving year-round engagement.
3. AI to Accelerate and Scale
Personalization and gamification are retail power tools; AI is the catalyst that gives them another gear. AI’s ability to scale personalization to deliver value to millions of customers is a game-changer in retail, as we explored extensively in our recent report, Ultimate Guide to AI for Personalization & Retail Marketing. The right AI tools can harness the data retailers already hold to deliver real-time individualized offers based on thousands of metrics. Additionally, successful AI-powered data analytics creates a virtuous circle whereby AI multiplies feedback and improves the data to enhance the accuracy of predictive AI.
AI also facilitates more effective gamification, as demonstrated by many well-known retailers, including Tesco and Carrefour. AI helps to quickly generate customized marketing “triggers” and “nudges” in gamification initiatives, which also helps spot and forecast shopping trends early on and reach consumers when they're most likely to buy.
If 2025 is indeed going to be a high-growth year for the industry, it's in retailers’ best interests to spend the first quarter sharpening the loyalty tools that can yield year-round results. Investing in advanced personalization capabilities, starting with customer data management, will help retailers convert infrequent or first-time shoppers into loyal customers. Gamification will help generate incremental revenue and keep loyalty members engaged. And AI will supercharge each of these capabilities.
Sarah Jarvis is communications and propositions director at Eagle Eye, a SaaS technology company enabling retail, travel, and hospitality brands to earn the loyalty of their end customers by powering their real-time, omnichannel and personalized consumer marketing activities.
Sarah Jarvis, Communications and Propositions Director, Eagle Eye
With over 15 years of experience as a retail marketing leader in the loyalty industry, Sarah has worked with some of the world’s largest retailers and FMCG brands to help them drive profitable growth by prioritizing the customer in their decision-making processes. Her expertise spans loyalty program design, CRM, personalization, data analytics and commercialization, and the technical implementation of initiatives that bring retailers and brands closer to their customers. In addition to co-authoring the 2nd edition of Omnichannel Retail: How to Build Winning Stores in a Digital World, Sarah is a Forbes Communications Council member and the Communications and Propositions Director for Eagle Eye, the SaaS technology company enabling retail, travel, and hospitality brands to earn the loyalty of their end customers by powering their real-time, omnichannel and personalized consumer marketing activities.
