3 Must-Do Loyalty Strategies for Retailers to Re-Emerge From COVID-19

Predicting when the COVID-19 outbreak will subside, and then navigating consumer shopping behavior when it does, is a challenge for all retailers. Indicators suggest that consumers want to resume their retail rituals, with 33 percent of shoppers buying retail goods as much as they did before the coronavirus. Because of increased digital shopping and supply chain issues during the stay-at-home orders, only 48 percent of consumers were loyal to their “usual” brands.

As the market continues to expand and as key retail moments like “back to school” are upon us, the next six months are a crucial time for retailers. Understanding how to engage with consumers now is critical. Merkle recently released its Consumer Activation Must-Dos for Re-Emergence to help retailers do just that.

Must Do #1: Get to (re)know consumers via activation campaigns.

Consumer spending habits and preferences have shifted during COVID, making it critical to understand who consumers are now and how they want to engage and interact going forward.

Brands can invite customers to share how they’re doing via social hashtag promotions that collect identity or profile data, and then respond with a personalized offer or chance to win. For example, Lucky Brand is urging Instagram users via its #WinFromHome campaign to post pictures of themselves doing a daily challenge for a chance to win prizes. Hashtag-based campaigns can launch in as little as two weeks and typically result in high participation of one to three posts per participant.

Brands should also leverage their reward programs to gather new or updated information in fun and engaging ways. Loyalty incentives will drive participation rates for surveys, polls, reviews or profile updates. A small points-based incentive can increase response rates up to 30 percent.

Must Do #2: Engage and reward via “edu-tainment.”

Consumers seek content from brands, and this phenomenon has heightened during COVID. In GWI’s Wave 3 Study, 73 percent of consumers said they want practical tips from brands going forward, 66 percent want entertaining content, and 64 percent want to know how brands are helping their communities.

Brands should consider transforming their online experience into an immersive “hub” that utilizes game mechanics, content, rewards and promotional offers. Solutions like these result in 12 minutes spent on site and five to 10 logins per participant. Not only can this drive engagement with consumers, but it also rewards them for spending time with the brand.

For example, Nike continues to transform its on-site experience and its Nike+ app into immersive, customizable experiences based on not only taste, but how you utilize Nike shoes or athletic wear. Nike also has exerted extensive effort in support of COVID-19, notably offering its Nike Training Club Premium app for free in the U.S. to support people working out at home during lockdown.

Must Do #3: Reinvigorate via generosity and gratitude.

Never has a better time existed for brands to demonstrate generosity and gratitude. Loyalty programs are a key investment for both the retailer and consumer, but too often redemption rates are low and satisfaction rates along with it. The No. 1 complaint with loyalty programs is around rewards, with 79 percent citing either the length of time or the behavior required to earn a reward.

Retailers like L’Oréal, American Eagle Outfitters, and many others extended rewards through COVID, and airlines and hotel companies are categorically extending status through 2021. Brands should be evaluating and honing their loyalty value proposition to ensure it’s in line with expected future behaviors as well as to show gratitude

For example, due to the pandemic, 7-Eleven is canceling its busiest day of the year — the famous July 11, 7-Eleven Free Slurpee Day. However, the convenience store chain is making a smart pivot to its 7Rewards loyalty program: To help with social distancing, customers are encouraged to download the free loyalty app to get a coupon for a free medium Slurpee redeemable in July. Saying thank you is a simple, effective way to earn emotional loyalty now and for a lifetime. Forty-one percent of consumers indicated that saying “thank you” is one of the most important ways a brand can interact with them, and this is on the rise since last year.

This is the time to review loyalty initiatives and ensure value propositions are focused on creating real relationships with consumers in order to successfully re-emerge from COVID.

Allison Cripps is principal consultant, promotion and loyalty solutions, at Merkle, a global performance marketing agency.