Why Loyalty Has to be Branded in Retail

 How Marketing Automation will Disrupt Loyalty Rewards Programs 

I was busy doing a review of the literature on Retail trends this morning and I stumbled upon Vend's list of trends and predictions for 2015. I was struck by point 4 that explains how Loyalty is changing in retail. The really question in my mind is actually the following: 

Coalition Networks vs. White Label Loyalty 

I'm personally an advocate of marketing automation and customized loyalty rewards programs to a store's actual audience. Typically indie stores that know what they are doing already have extremely high brand trust, so their loyalty rewards program and campaigns should leverage that. 

 The majority of loyalty solutions available to SMB retail stores that are online on a cloud POS system are typically, coalition network based. Now I'm no expert, but why would a hipster indie brand not want to retain its authenticity of a unique small brand. When an independent store decides to opt-in to a coalition network, a loyalty card system, what are they actually giving up?

• Their high brand trust to a third party network, missing the opportunity of building a better 1 to 1 relationship with their customers. (brand diffusion) 
• Giving the data of their customers to a third party, that will exploit their customer's data not always in ways that will translate into ROI for the indie store themselves. (bigger is not always better). 
• The opportunity to customize and tailor their loyalty rewards program and loyalty campaigns with inbuilt marketing automation and data augmentation with solutions like Thirdshelf offers, that empower via white-label campaigns, where the loyalty system is embedded in the Cloud POS itself. (external vs. internal and the kinds of customer experiences this creates in the real world) 
• The customer analytics and metrics used on proof of ROI of campaigns is dependent upon the Coalition network provider, and not in terms that are typically retail friendly. Obviously, proof of ROI is a big deal for retailers, merchants and store owners. A Loyalty system that can demonstrate the ROI in gross and net sales terms, that level of transparency, is what's needed in 2016. Not just the ROI of campaigns in dollars, but the ROI of each customer. 
• Coalition networks and reward programs can often boost one-time shoppers ,but are typically not very good at increasing retention, reducing churn, triggering dormancy campaigns and analyzing data, gaining insights and connecting the dots with marketing in real-time that's specialized to the niche industry of the store. 

A store is therefore better to choose an in-house solution that generates customer-centric data in a self-learning system that strengthens their developing brand. This is just my personal logic, but try to see it from the perspective of a store owner. 

For SMB retailers who operate on slim margins, choosing a loyalty solution that can do marketing automation makes sense. Streamlining and simplifying a lightweight but customized loyalty rewards program suitable to my audience. I'd recommend choosing a loyalty solution that has data, insight, strategy and customer success built into their system. 

So if I'm an indie store owner, I want to have a say on campaigns and be able to participate directly and pair loyalty programs with the relationship I have with my customers. That is, loyalty is a function of building high-value relationships with my customers. 

So in 2016, expect loyalty solutions that move more into data, machine-learning, marketing automation all at the same time at the service of the indie store, thats's celebration lifestyle interests of their unique customers. The potential of marketing automation to create more personalized customer experiences is quite exceptional. 

Paying for a loyalty rewards service that could damage my brand, gives away my customer data over to a third party, and that are potentially not even good ROI for me, just doesn't make sense any more in 2016. This is a #BigIdeas2016 contribution, at how I see Loyalty marketing for independent retail evolving.