By Mario Toneguzzi
In a market that’s increasingly crowded with loyalty programs all vying for the same share of wallet, what opportunities – and options – do retailers across Canada have when it comes to offering customers more flexibility and choice in how they redeem their well-earned rewards?
Many major Canadian retailers are looking for ways they can achieve this, says Tim Mason, chief executive officer of Eagle Eye, a global loyalty technology and digital marketing company that enables retailers to create an intelligent, real-time connection with customers.
Loblaw, for example, recently merged two of Canada’s most-loved loyalty programs – PC Plus and Shoppers Optimum – to gain more insights into their customers and their behavior across multiple brands and locations. The consolidated PC Optimum program, powered by Eagle Eye’s AIR platform, allows Loblaw to personalize the offering based on individual shopper behaviours, then give customers the choice to earn and redeem through their preferred channel and location.
Eagle Eye, which works with many leading retail and grocery companies in the UK (most notably Tesco and Sainsbury’s), has expanded into both Canada and Australia this past year. The company specializes in loyalty and digital marketing solutions that deliver individualized rewards and messaging in real time, and help brands establish a deeper connection with their customers. Eagle Eye is one of the few companies with the capability to support an initiative on the scale of Loblaw’s PC Optimum program, which serves millions of members in 2,500 locations (soon to be 4,500).
The platform also provides secure, real-time issuance, management and redemption of digital promotions and rewards across all online and in-store purchases. With its sophisticated rules engine, the Eagle Eye AIR platform enables Loblaw to vary the proposition, points, or offer to the customer by division and product category. This in turn allows Loblaw to create truly personalized experiences for its customers.
“Loyalty programs are successful when they deliver the right offer to the right consumer at the right time. Personalization is key for driving customer value and long-term loyalty, and by leveraging the Eagle Eye AIR platform to connect their customer data into one view, Loblaw can do just that,” said Mason.
Canadian Tire Shifts Gears
Mason also mentioned that Canadian Tire is the latest major retailer to expand its loyalty program across its various brands to provide a better loyalty redemption experience for its customers. Interestingly, Canadian Tire was one of the forerunners of the loyalty program concept, introducing Canadian Tire “money” in the 1950s.
But it wasn’t until the 1990s that retailers could capture customer data from a loyalty program and begin building a better connection with the customer. That process is still being perfected today, and according to Mason it’s more important now than it’s ever been.
“Providing a better redemption experience is obviously important. But for Canadian Tire’s program to grow in popularity, it will need to meet customer expectations of ongoing communication and lasting value,” continues Mason. “And that starts with connecting their data across all banners and channels in order to gain insights into shopper behaviours, which then enables greater personalization and ultimately relevancy.”
Shifting Canadian Loyalties
In the “Shifting Loyalties in Canada” survey and report Eagle Eye conducted with Ipsos late last year, it found that 87 percent of Canadians belong to an average of five loyalty programs or less — fewer than the average of 13 memberships per household reported in older surveys.
“The finding illustrates consumers’ unwillingness to participate in programs they no longer find valuable, relevant, or easy-to-use,” explains Mason. “Programs that aren’t tailored to customers’ individual needs and habits will have a hard time staying in that ‘top 5’.”
Changes in the Canadian loyalty marketplace may be driven by consumer preferences, but they are not limited to consumers’ attitudes and behaviors. Major corporations that have relied on traditional approaches to loyalty for decades are changing their strategies to meet new customer expectations.
“The Canadian loyalty market is undergoing a sizable shift, particularly in the recent evolution of legacy loyalty programs. Air Canada announced the creation of its own loyalty program by 2020, Loblaw brought together two major programs to form the PC Optimum program and Canadian Tire has expanded its loyalty program across its various brands,” says Mason. “What’s consistent across these companies is the decision to merge, consolidate and bring their loyalty programs in-house. This is a trend we expect to continue across the retail landscape and different categories.”
Data, Insights, and Personalization
As companies bring their loyalty programs under their own roofs, they will be better equipped to track and analyze consumer behaviors across banners, channels and touchpoints. Retailers can use this data to inform marketing strategies and customer outreach. Mason believes this will be a significant competitive advantage for retailers that can execute these strategies well.
“The most successful retailers will connect their data and leverage the insights to create personalized offers based on each loyalty member’s individual shopping habits, preferences, and even in their preferred channels,” he said. “Gone are the days of generic offers and mass communications. Consumers expect greater value from the data they share, and retailers need to connect that data into one single customer view to engage with consumers wherever they are on their shopping journey, in real time.”
Loyalty, a Rewarding Experience
Loyalty programs are pivotal gateways for this customer data, according to Mason. Not only are they effective sources of data, they are also ideal vectors for delivering communications, offers and rewards that are personalized according to that data.
“And by personalizing it, brands make that communication more relevant and therefore make it more attractive,” he added.
If a brand is committed to personalizing offers and rewards, it should also expand its concept of rewards beyond the transaction. Eagle Eye’s “Shifting Loyalties in Canada” report found that Canadian consumers are interested in rewards for activities that do not necessarily require a purchase or financial outlay. This means retailers will need to extend rewards beyond the traditional cash transactions, enabling program members to earn non-transactional rewards—the kinds of experiences that create emotional loyalty for their favourite brands, such as:
Meeting consumers’ expectations is crucial to the success of a loyalty program, including understanding which customers will be motivated by non-transactional rewards. But to achieve this level of understanding, Canadian brands must have access to their customer data across all consumer touchpoints, and a technology partner that can connect all this data into one single customer view. Only then can today’s brands action their data effectively. This is where Mason sees Eagle Eye’s potential for growth in the market.
For more information about Eagle Eye, visit: www.eagleeye.com
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Mario Toneguzzi, based in Calgary has 37 years of experience as a daily newspaper writer, columnist and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, city and breaking news, and business. For 12 years as a business writer, his main beats were commercial and residential real estate, retail, small business and general economic news. He nows works on his own as a freelance writer and consultant in communications and media relations/training. Email: email@example.com