This article was originally published in Global Convenience Store Focus.
A trio of leading convenience store industry experts are joining a Liquid Barcodes Advisory Board to champion digital customer engagement in convenience retail.
Bob Stein, president of RBS & Associates and former president & CEO of Kalibrate Technologies (formerly KSS Fuels); Dan Munford, managing director at Insight Research and an international strategist on convenience; and Christian Warning, the founder and managing director of The Retail Marketeers and the NACS representative for German-speaking markets, will provide a strategic advisory function to Liquid Barcodes, an international marketing technology company that offers self-service dashboards enabling retailers to run their loyalty/rewards programs and digital campaigns. In particular, the Board will provide strategic advice on Liquid Barcode’s innovative focus on ‘live loyalty’in the global convenience industry.
Why it matters
The retail landscape is being transformed, driven by increased competition and new digital disruptors like Amazon, Alibaba and Google. Retailers, including convenience stores, are grappling with changing customer behaviour and expectations, largely fuelled by the trend to digital. In this new trading environment of digitally-enabled, ‘always on’ consumers – Mastercard forecasts 80bn connected devices by 2025 – getting closer to your customers is critical in order to understand and preempt their every need.
Traditional loyalty does not cut it any more. It can’t engage, delight and win the hearts of today’s convenience customers in the same way as new, digital techniques.
“The c-store industry has been aware for some time that consumer loyalty is critical but that there’s an ongoing evolution,” says Stein. “For grocery retailers, loyalty programs started out as offering cents off a gallon or a litre of fuel with the aim of getting people into the supermarket and to make a larger basket spend; or there have been discounts on leading consumer brands and CPGs. But the discounting view does not always work for c-stores, where there’s a much smaller basket shop, so there needs to be another element for building loyalty, winning repeat customers and showing them that we care.”
Traditional discount- and points-based loyalty schemes are dwindling in popularity around the globe, reports Warning, a former head of marketing at Shell Germany. “Increasingly retailers are beginning to understand that owning the customer relationship and data is a strategic opportunity and should be on every CEO’s agenda. Digital enables rich dialogue and apps create an ‘extended store’, delivering retail offers directly into customers’ hands, wherever they may be,” he says.
Munford, who regularly interviews chief executive officers at leading convenience retailers around the globe, agrees digital engagement is good business acumen.
“It’s far more economic to put your dollars into the digital channel that you control, rather than investing in a channel that reaches a lot of consumers, but many of those are not relevant to your stores or your business,” he says. “There is a very inescapable argument that investments in the channel you can control, is money well spent.”
For Mats Danielsen, CEO at Liquid Barcodes, many retailers are too focused on mining transactional data in order to personalize offers. “You need to think both push and pull,” he says. “Retailers obviously need to better understand their customers and improve their personalization capabilities, but being customer centric is just as much about empowering customers with more choice and control. More pull that is,” he maintains.
What is live loyalty?
So enter the new school, live loyalty – a customer centric and customer-driven approach, which offers more empowerment than traditional loyalty programs. It’s a call to action for convenience retailers who need to recognise the strategic value and opportunity in creating their own real time direct, digital communication channels with customers – channels that they, rather than consumer brands, control and that allow for data-driven, personalized and rich engaging content and two-way dialogue. And that’s not an option with traditional card-based platforms and email-led campaigns.
“Live loyalty says ‘let’s talk about the customer’ and get the customer engaged,” says Stein, who prior to Kalibrate consulted to the retail and convenience store industries and spent 18 years at Dairy Mart Convenience Stores Inc., where he held the posts of chairman, president and CEO. “It’s unlocking what will get them to care about one retailer versus another. It’s very consumer centric and engages with consumers but in the way that they want to be engaged, on their terms.”
At its essence, live loyalty engages customers and keeps them engaged, explains Danielsen. One such example is Liquid Barcode’s concept of ‘gamification’ whereby customers play games and win rewards for themselves or to pass onto their friends via social media mediums
“We believe it is critical to engage the customer,” says Danielsen. “One core component of live loyalty is gamification. We are gamifying couponing and loyalty. I think this is essential in order to get customers’ attention and ultimately truly engage them and win their loyalty.
“Liquid Barcodes concept of ‘live loyalty’ engages people on a real time basis who like that notion of games and competition done in an appropriate and fun way with immediate and instant rewards,” says Stein. “That combination makes people want to come back to the app and use it more often because it’s cool and fun, which means to them that the retailer is cool and fun.”
Customer centric
While live loyalty uses insights and automation to bring data-driven personalization to the convenience retailer’s marketing mix, it also delivers customer-driven personalization. It’s a neat and unique differentiator, which empowers customer choice and epitomizes Danielsen’s ‘pull’ versus ‘push’ tactic.
Live loyalty enables customers to choose their own rewards such as a healthy snack or coffee, for example. “It’s letting the customer personalize the programs themselves,” Danielsen says.
Rewards can also be shared between friends, fostering the concept of caring, social communities.
With live loyalty, customers can pass their rewards onto friends and engage their own social networks. “I’ve not seen that in loyalty before,” says Stein. “Being able to pass on a reward that I either can’t or don’t want to redeem myself to a friend of mine is a great definition of live loyalty.”
For Munford, who also takes on the role of chair of the new Liquid Barcodes Advisory Board, live loyalty is very different animal to regular loyalty.
“The advanced nature of the mechanics and gamification potential of the Liquid Barcodes platform justify excitement and the new, catchier ‘live loyalty’ terminology,” he says. “Liquid Barcodes’ technology is not like primitive digital couponing – it understands consumer psychology and builds real time relationships with consumers especially through gamification but also caring/sharing-type community exchanges. These capabilities are increasingly essential for a retailer to attract, retain and delight the digital shopper.”
Real time customer engagement
Live loyalty, unlike traditional loyalty schemes, is truly dynamic. It’s instant and two-way. Live loyalty is right now, in real time and it motivates customers to return to stores sooner. For convenience retailers, who may be experiencing a fall in store traffic due a decline in traditional core categories such as fuel and cigarettes, that’s an imperative.
“The definition of convenience is evolving,” says Stein, “if that puts pressure on footfall then it’s prudent for retailers to engage better with the customers they have – to make sure they are loyal and continue to visit their stores. That makes loyalty programs and customer engagement more important than ever,” he says.
As Stein observes, loyalty is hard won but easily lost so keeping tabs on customers is crucial and live loyalty provides that focus.
“Live loyalty is instant,” asserts Danielsen.
“Every interaction is an opportunity to motivate the next. A visit in-store should trigger an immediate follow-up action from the retailer. There is no time to involve a large analytics team at head-office – immediate, automated, relevant follow-ups are what is required. It is about increasing purchase frequency and create habitual purchases – in your stores.”
With Liquid Barcodes’ live loyalty programs, retailers have access to real time data – they can see how many unique customers open the app and how many unique customers purchase in-store.
“Live loyalty is much more transparent. It’s not about how many app downloads or e-mail subscribers you have – it’s about how engaged members are, every day.” Danielsen says. The challenge, he concedes, is not to be driven only by consumer brands’ discounts but realize the importance of engaging customers. Remember, the focus is about putting the customer at the centre of loyalty, not products.”
Warning agrees and urges convenience and fuel retailers in the German-speaking markets to catch-up on digital and take advantage of the possibilities live loyalty represents. “I see Liquid Barcodes, ultilizing live loyalty,as a technology partner offering unique mechanics to drive traffic to store and providing digital capabilities to the marketing teams from day one,” he says. Warning highlights Valora as a retailer taking a lead in the DACH region. “They have a strategically anchored digitization agenda and have chosen Liquid Barcodes as a strategic partner to enable them engage and reward their customers,” he says. “They have truly adopted live loyalty for example with their share and care k kiosk app program.”
In joining the new Advisory Board, Munford also recognizes Liquid Barcodes as a leader in live loyalty and a technology company that can be instrumental in quickly bringing convenience retailers the necessary digital capabilities to both keep up with competition and customer expectations.
“Liquid Barcodes technology is impressive and, with their convenience store industry know-how and experience, a great potential strategic partner to any retailer in our industry,” he says.
