In 2020, technology will play a central role in reimagining the loyalty program construct.

Loyalty programs’ long-standing emphasis on earning points has relegated the relationship between brand and customer to a transaction. In 2020, with loyalty programs giving consumers more choices (and power) than ever, smart c-store operators and loyalty marketers will work on bringing back the emotional bond to build stronger – and more profitable – customer loyalty.

In the coming year, you can expect a movement toward personalized loyalty marketing that rewards customers with what they value most. Just as technology helped enhance loyalty programs in the past decade, it will continue to play a central role in how brands engage with their most dedicated customers.

What loyalty trends are likely to impact your marketing efforts? Let’s take a look at the following five trends:

#1. C-Stores Will Rely More on Data-Driven Loyalty Marketing

The 2019 C-Store Shopper Report confirms the enormous popularity of loyalty programs in convenience retail, with 42.5 percent of consumers belonging to a program in 2019, up 6 percent from 2018. It explains why most convenience retailers (73 percent) have a loyalty program in place.

If you have a loyalty program, it’s time to shift gears from program adoption and implementation to optimization. To transform your program into an effective revenue-generating tool, you need to capture the right customer data and have the capability to “translate” the data into actionable insights. Data-driven marketing will increase personalization in loyalty programs, including offering rewards that are relevant to individual members.

#2. C-Stores Will Focus More on Omnichannel Marketing

Email is one of the top five customer communication channels used by retailers to engage members, according to our 2019 Road to Rewards Report. That’s unlikely to go away.

However, in 2020, CRM will continue to become more omnichannel. In addition to email, c-stores will leverage other channels to increase customer engagement. Expect more in-app messaging, geotargeting, short message service (SMS) and push notifications as part of the loyalty marketing mix.

While omnichannel marketing offers more opportunities to engage members, it also makes loyalty marketing more difficult to manage. If you’re using disparate applications to run your loyalty program, it’s time to consider implementing a unified marketing solution. Be sure it’s equipped with a common UI framework and a holistic reporting and analytics platform for increased efficiency.

#3. Applying Artificial Intelligence to Loyalty Marketing Will Grow

This is directly related to the first trend and movement toward data-driven loyalty marketing. Here are two ways AI can help improve loyalty marketing.

  • Segmentation: When members engage with a loyalty program (to track and redeem rewards, visit a store, buy gas), AI capabilities record and analyze information from those actions. The analysis can help you segment members according to common factors, such as demographics and rewards preferences, for customized messaging and offers.
  • Personalization: In the same vein, AI can help build user profiles from customer engagement, which you can use to personalize each customer’s experience. Whether it’s sending a message on the customer’s birthday or offering a discount on their preferred snack or drink item, the ability to tailor offers can significantly enhance your customer relationships.

#4. Fuel Savings Will Remain the Top Loyalty Currency

In the U.S., the most preferred loyalty currency for the last 4 years has been fuel savings, and its leading position is unlikely to change in 2020. The newly released 2019 Road to Rewards Report shows that 66 percent of consumers belong to a program that offers fuel savings. Not only that, consumers love to save on the cost of fuel regardless of price fluctuations. Seventy-four percent consider fuel savings important when gas prices rise, while 70 percent want those savings when gas prices drop.

If your loyalty program doesn’t offer fuel savings as a reward, why not update your program offering to include it? Understanding consumer behaviors and adjusting your rewards to meet their needs is key to growing membership and driving profitable sales in the year ahead.

#5. Loyalty Mobile App Adoption Will Grow

Consumers want an easier way to track and redeem rewards. No wonder 52 percent of c-store shoppers prefer using a mobile app for doing both, according to PDI’s 2019 C-Store Shopper Report.

Indeed, the mobile app has overtaken websites in terms of popularity among loyalty program members. The 2019 Road to Rewards Report shows that in 2016, only 20 percent preferred mobile apps for reward redemption. The number rose to 31 percent in 2017 and 44 percent in 2019. In contrast, the choice of using a website to redeem rewards has declined from 36 percent in 2017 to 29 percent this year.

In addition to tracking and redeeming rewards, a mobile app can play a critical role in personalization by customizing messages and pushing offers when the member is on-site or nearby.

Building Relationships for the Long Haul

Resolve to make your loyalty program more than a transactional platform. It should be an effective tool for communication and building stronger relationships with your customers. With technology and consumer expectations changing at lightning speed, the ability to better understand and quickly respond to customer needs will be paramount in the new year and decade ahead.

Did You Know: Your Source for PDI News provided by PDI, the leader in enterprise management software for the convenience retail and petroleum wholesale markets.