Personalised Loyalty Programs: The Secret Sauce to Retail Media Success

Introduction:

Retail media is in the news every week as retailers and brands worldwide expand and innovate their offerings. Recent Australian examples include major players like Metcash and Wesfarmers who have announced investments in expanding their retail media capabilities through initiatives such as digital screens and in-store radio ads.

However, while most large retailers are now participating in retail media, the results are not uniform. Only a few omnichannel retailers globally are achieving the benchmark of generating over 0.5% of their sales through retail media. A key differentiator among these top performers is their strategic use of personalised loyalty programs. This blog explores how personalised loyalty programs can be a game-changer for retail media success and why they are the secret sauce behind the industry’s top achievers.

1. Precision Targeting & Personalisation Across Channels ??

One of the most significant benefits of personalised loyalty programs is their ability to deliver targeted experiences across both in-store and online channels. A recent example is Woolworths' "Worlds of Wonder" Disney Collectibles campaign, where Woolworths used its loyalty program to offer customers additional Disney-themed collectibles as rewards for purchasing brand-sponsored products. This strategy drove incremental sales and increased participation both in-store and online, creating a seamless omnichannel experience that engaged customers more deeply with the campaign.

2. Enhanced Customer Data & Insights ??

Personalised loyalty programs are a treasure trove of first-party customer data. By tracking customer behaviours, preferences, and purchase patterns, retailers can build detailed customer profiles. This enables them to create tailored messages that resonate with individual customers, driving higher engagement and conversion rates.

For example, Southeastern Grocers' SEGConnects retail media program uses its loyalty platform to gather detailed customer insights. These insights are then used to create highly targeted, personalised campaigns that cater to customers’ unique needs and interests. Advertisers can leverage this information to connect with the right audience at the right moment, leading to increased campaign effectiveness and higher advertiser satisfaction.

3. Real-Time Data for Campaign Optimization ??

Personalised loyalty programs provide a continuous stream of real-time data on customer behaviour across all channels. Retailers can use this data to monitor campaign performance, identify underperforming elements, and make adjustments on the fly. This level of agility is crucial in today’s fast-paced retail environment, especially as AI-driven technologies will empower marketers to respond to real-time data, such as shifting customer preferences or emerging sales trends.

For instance, Tesco's Clubcard data allows the retailer to track the effectiveness of its retail media campaigns, measuring sales uplift for featured products. With access to detailed reporting, advertisers can see how many customers were influenced by the campaign and how much they spent. This data can be used to optimize campaigns in real-time, maximizing return on ad spend (ROAS) and overall performance.

Conclusion

A personalised loyalty program is more than just a tool for rewarding customers—it’s a strategic asset that unlocks the full potential of retail media. By leveraging comprehensive customer insights, enabling precise targeting, and providing actionable, real-time data, personalised loyalty programs empower retailers to create highly effective, cross-channel media campaigns.

In my view, retail media's biggest winners will be those retailers who can integrate their loyalty programs into their retail media strategies to enhance the customer experience and maximize the value of every campaign.