Leveraging Loyalty in Commerce - what it means for Ops

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I had the pleasure of listening to Ger Keohane from StudioForty9 at the February 2024 eCom Live Meetup in Shoreditch speaking to the topic of Transformational eCommerce.

For anyone that’s met Ger, they won’t be surprised to hear that he didn’t beat around the bush and that he was not without opinions. I’m with you on AI and 360 degree views of customers by the way Ger.

The biggest takeaway for me was around Loyalty & Community building and how important they are in retail, whether you’re at the transactional end of the spectrum, or you’re a full blown luxury brand.

Ger referenced some examples that I wanted to share as they leapt out, both in terms of the experience they were offering and from appearing - on the face of it - not to be ridiculously complex operationally.

VIP

DSW’s programme has some really engaging initial hooks, including their ‘Give a Pair’ initiative and $ off on your holiday. 

They also lay out a beautifully clear pathway to engage their VIPs and take them with them as well, with the benefits of spending their way into Gold or Elite status clearly spelled out.

Things to consider Operationally

• There are a wide range of Loyalty Apps and Platforms out there that will enable tiering, reward points and the kind of functionality that DSW are leveraging here. 

• For the donation programme - in the flavour DSW operate - you’ll need to consider:

• How you’re going to hook your in store experience into your eCommerce. This will vary significantly depending on your eCommerce and PoS platforms / systems, but you’ll need to ensure that store staff are able to find the customer and their original order quickly.

• If you have multiple online stores - for separate countries or subsets of products - you’ll want to take that into consideration with regards to the customer view in-store. A surprisingly common challenge retailers face in this scenario is when customers have purchased on another country store from the Country they’re now shopping in physically.

• Traceability - adding points to the customer’s loyalty account is one thing, but what systems / processes are you putting in place with regards to recording what’s physically been donated and where it then goes. Do you want to stock control those items? Track SKUs / types of products donated? Thinking about the traceability and reporting you need in place for an initiative like this early on helps massively. Otherwise you end up with a different manual process in each store, no data you can trust in terms of reporting on the impact this is having and frustrated colleagues.

Squad

Again, E.L.F. have a tiered programme and do a great job of laying out how that works to their squad members. The standout piece from them though is how you can leverage their app to earn rewards for purchasing E.L.F. products from anywhere. Snap a copy of your receipt and you’ll earn points from E.L.F., regardless of where you’ve shopped.

Things to Consider Operationally

• The tech is going to be a big part of this - whether that’s building your own custom solution or leveraging existing platforms / apps - but the approach will vary massively depending on your transaction volumes.

• The biggest standout on this for me is around Product and SKUs. Whatever you’re leveraging for the receipt scanning will need to have visibility of your current product catalogue. On the face of it that’s not a difficult integration challenge to solve, but it does depend on you having a centralised and accessible product master. Whether that’s in your eCommerce platform, your back office, or a separate Product Lifecycle (or Information) Management tool. Dull but necessary.

• And whilst we’re on dull, but necessary, a key component of all these approaches operationally lies around the value of reward points that haven’t yet been redeemed and representing them as a liability in your Accounts.

Community

Levelling up is something Bergzeit offer within their Loyalty programme as well - as you’d expect. Their unique element is in integrating Strava. Club members are able to earn points on the back of tracking their activity on Strava as a member of the Bergzeit Strava Club. As well as through purchases and product reviews.

Things to Consider Operationally

• On a personal note, this is definitely the coolest approach to loyalty. Leveraging Strava’s platform and their own Club / Community within it feels like a brilliant fit for the brand.

• As a pure proof of concept, tooling like Zapier will enable you to pull the data you’re interested in from Strava’s API and leverage it via Google Sheets - or similar.

• Down the line, if this is something you want to double-down on as a brand, then Strava’s API will enable you to hook into the relevant data streams from a range of tools, from full-blow Integration Platforms that will then enable you to pass this data onto your eCommerce and Business Management platforms, through to no-code / low-code solutions, such as AirTable.

Membership

REI’s approach is a really interesting one. In the first instance it’s quite ‘old-school’. You need to spend enough ($50) to qualify to then spend more with them ($30 for membership). You’ll receive get a $30 bonus card that you can redeem within 30 days.

Where this gets interesting is with what comes next. Now you’re a lifetime member of the REI Co-Op, you’ll qualify for a share of the profits - typically this equates to around 10% of what you’ve spent with them annually. And that lands every year, for as long as you’re part of the Co-Op.

On top of that, there are a slew of Member offers that hook into the Co-Op model, including; buying and trading in used equipment, donations to their Action Fund for every member that joins, curated collections and offers and much more.

Things to Consider Operationally

The level of complexity at play here means that, from the outside in, it would be presumptuous of me to start calling assumed elements out.

In that context, the breadth of REI’s membership approach to loyalty means that the customer account tooling across all customer-facing platforms has to be on point. With so many elements of this offer depending on the customer’s membership to enable access / visibility, baking that into the entire customer journey is key. Building operational processes and selecting tooling that can enable that completely independent journey for members will be vital to delivering on this.

In Closing

Retention is a huge focus for brands in 2024. Building and leveraging your community is key to achieving that and an engaging loyalty programme that speaks to your customers is incredibly powerful.

If you’d like help navigating the options available, what they’re going to mean to your business operationally and getting them implemented successfully and efficiently, get in touch today - andy@cogent2.com.