In the department store landscape, where customers are spoilt for choice – where to shop, how to shop, which brands to choose, loyalty is becoming more crucial than ever. It’s not anymore only about unique experiences, or value offering, but also effective rewards like customizable digital reward programs that make it worthwhile for shoppers to stay engaged. The space in the last few years has witnessed a lot of departmental stores reinvent, tweak and upgrade their loyalty programs. With rapid technological advancements and innovative programs like reward schemes, the concept of loyalty programs evolved with new opportunities and futuristic features. According to a report emailed to Retail Dive from Gartner, L2 stated that loyalty programs increased across several different sectors, with launches reported in 2018 by 14.9% of department stores, 5.2% of specialty retailers and 5.9% of activewear retailers. A report from intelligence firm Beroe claimed that the market will reach $201 billion by 2022. Department store loyalty programs mostly aim on achieving enhanced value propositions, sometimes with the help of a complex reward system. A department store loyalty scheme benefits recurring spenders compared to the general audience due to their higher lifetime value. Department store loyalty programs have the potential of making remarkable changes to the business as these programs heavily utilize in-store services and products even for brands having a major ecommerce presence.
Best Loyalty Program Features for Department Stores
Below mentioned next gen loyalty program features will help your department store to bring in more profitable leads to the business and assist in the successful retention of loyal customer base-
- Instead of the traditional method of using a plastic loyalty card, invest in a digital card. By simply showing the e-card on their phone customers can get hold of the best offers without having the brand compromise on important customer details.
- In large retail hubs like Department Stores, businesses can benefit by arranging cross brand reward programs to give customers the ultimate journey of convenience and enticing perks. Value seeking customers love indulging in cross brand contests as that gives them the chance to connect with other brands that could possibly bring them other added benefits.
- Introduce partnership rewards. Through this technique brands will identify and engage with other foreign or domestic partners. This can in turn help the business invest in other profitable sectors of the market for mutual partnership.
- The perfect positioning of experiential rewards in loyalty tiers can help businesses gain higher profits and achieve desired results in a shorter span of time. High tier privileges and VIP treatments entice customers into higher engagement. Give customers early access to VIP clubs and grant them surprise premium memberships. This will make way for the customers who want to make high volume purchases.
Strategies for formulating a winning Department Store Loyalty Program
By understanding the target customers and the business objectives, it is easier to formulate a program that assures high value proposition and converts more first time buyers into loyal brand advocates
- Focus on minimizing the distance between your customers and the brand. Proximity plays a massive role while marketing or advertising your loyalty program. Your proposed program should be advertised on all social media channels. The goal is to make it easy for customers to enroll themselves.
- Keep a check on the frequency when drafting your loyalty solution. This is particularly important for department store business as customers often engage in purchases without having any intention to further engage with the brand. It is a crucial aspect of customer lifetime marketing, that customers cannot stand out to be profitable to the business if they only engage for small purchases.
- Understand the objectives that you need to focus on while designing a loyalty program for your department store. While formulating it, try to achieve longevity and add some enticing elements in the end of it. This will keep customers engaged and engaged till they reach the end of the program. Make sure that your loyalty program and schemes are thoroughly explained to avoid confusion and uncalled for chaos.
- Make sure the incentives offered are personalized and memorable. Customers love experiences that they will cherish forever. Aim on acquiring the trust and confidence of your customers.
- Allow customers to upload or turn in physical or digital receipts to earn points for missed orders. This can reduce the burden on customer service for having to award additional points from the backend.
Top Department Stores with Brilliant Loyalty Programs
- Macy’s- Macy’s had already set the benchmark for creating convenience and satisfaction for every customer possessing or not possessing a card, to join the loyalty program. Revamping its reward program, Macy’s allows customers to claim rewards on every purchase. Dividing the entire structure into tiers of Bronze, Silver and Platinum, this US based department store has enabled free enrollment of customers into any one of the exclusive tiers. The unique All Stars Reward program of Macy’s permits its members to spend the earned points either online or in-store based on their convenience.
- Walmart– The world’s largest retailer came up with the most innovative customer loyalty program. The brand has turned out to be more powerful when they executed the ecommerce based strategies that brought them more deals and massive response within a rather short span of time. With the new Walmart App customers can get cash rebates. The recent collaboration with the Ibotta Performance Network, customers will be delivered the cash back. Attaching customer accounts to the ecommerce site, any discounts or cash bonus can be directly claimed back to the Walmart Account.
- Target – Target powers their Circle Rewards program formerly referred to as the CartWheel program, gives exciting rewards like 1% cash back as Target credit, birthday discounts and other benefits to its registered members. Customers can also upload digital and physical receipts separately to earn points for missed orders. They recently completed a major milestone of 100 million registered members and continue to deliver a holistic omnichannel program for their customers.
For over 10 years, Annex Cloud has been the worldwide leader in technology and service solutions that transform customer loyalty experiences for organizations, extending valued customer engagements, and tracking valuable customer information for marking strategic decisions. Powered by the comprehensive and scalable Loyalty Experience Manager™ solution suite, Annex Cloud customers capture and use zero and first party data to seamlessly deliver hyper-personalized experiences across the entire customer journey – from awareness to purchase to retention, loyalty and advocacy. Big brands in the department store industry have partnered with us to take advantage of our robust platform capabilities as well as industry expert recommendations that have helped them implement successful loyalty programs. The company is recognized by industry respected organizations like Gartner and Forrester and integrates with over 100 market-leading technologies. Get in touch with us today!