10 Powerful Ways AI is Revolutionizing Loyalty in Retail

Posted on March 28, 2024 by Anjali Pillai

From backroom inventory management to personalized shopping experiences, Artificial Intelligence (AI) is revolutionizing the retail sector in unimaginable ways. The numbers don’t lie – AI services in retail are predicted to soar from a $5 billion industry to a staggering $31 billion by 2028, a meteoric rise that underscores the profound impact AI is having on the industry.

One significant way AI is transforming the retail space is through generative loyalty, which is loyalty fueled by AI. Generative loyalty is ushering in a new era of personalized customer experiences and data-driven strategies. In a fiercely competitive landscape where brand loyalty can make or break a business, generative loyalty is emerging as the secret sauce that retailers are using to win over their customers. A leading AI-ML-powered SaaS platform, we at Capillary have been at the forefront of this transformation, partnering with several retail brands in Asia and the US to drive their AI-powered loyalty programs.

Here are ten remarkable ways AI is changing customer loyalty in the retail industry. These AI features are not only reshaping the shopping experience but are also helping retail companies forge stronger bonds between brands and their customers.

1. Tailoring Personalized Rewards

One of the key ways AI is revolutionizing retail loyalty is by tailoring personalized rewards and it does so by meticulously analyzing customer data, including past purchases, preferences, and even browsing behaviors, to create a comprehensive customer profile. By doing so, retailers can offer rewards that resonate with individual customers on a deeply personal level and are relevant to the customers. AI also excels in determining the optimal moment to engage a customer, ensuring that the rewards feel not only personalized but also timely.

For instance, consider a customer who frequently purchases eco-friendly products. AI can identify this pattern and tailor rewards that align with their values. This might include offering them exclusive access to new sustainable product lines or even making contributions to environmental causes in their name. This level of hyper-personalization not only delights the customer but also reinforces their loyalty to a brand that understands and values their choices.

This combination of relevance and timing creates a powerful bond between the customer and the retailer, enhancing loyalty and driving repeat business.

2. Creating Personalized Recommendations

According to a study conducted by Wakefield Research, approximately 72 percent of consumers tend to have greater trust in a company when they receive recommendations that are highly relevant to their needs. Moreover, nearly 49 percent of respondents expressed a strong likelihood of returning to businesses that offer these personalized recommendations. The role that AI plays in making these personalized recommendations keeps getting better day by day.

Look at the case of Amazon.

In 2021, a staggering 35 percent of what consumers purchased on Amazon was a result of product recommendations generated by AI algorithms. These algorithms consider a multitude of factors, including previous purchase history, browsing behavior, and even demographic information. When a customer visits Amazon’s website, they are greeted with a homepage filled with product recommendations tailored specifically to their interests. This not only simplifies the shopping process but also entices customers to explore more, increasing the likelihood of making additional purchases. As a result, personalized recommendations have become a cornerstone of Amazon’s continued success, contributing significantly to customer satisfaction and loyalty.

3. Predictive Analytics to Understand Customer Needs Better

By employing statistical data modeling and machine learning techniques to identify hidden buying patterns, potential sales opportunities, and emerging trends, predictive analytics driven by AI is becoming a powerful tool for retailers. Retailers can use vast stores of historical data, combined with real-time sales data, to anticipate individual customer needs accurately.

Imagine being able to predict your customers’ needs even before they articulate them. AI predictive analytics grants businesses this superpower, enhancing customer experiences. By analyzing past purchases, browsing behaviors, and industry trends, retailers can proactively provide recommendations and support.

For instance, a fashion retailer might notice that a customer frequently purchases summer dresses in May. AI-driven predictive analytics can anticipate this pattern and recommend new summer dress arrivals to the customer just in time for their seasonal shopping. As a result, customers feel heard, valued, and understood, leading to increased loyalty and trust.

Capillary’s Insights+, an advanced AI & ML powered Business Intelligence tool has been instrumental for several of our clients in using predictive insights to model their decision-making to drive better results.

4. Improved In-Store Experience

AI is reshaping the in-store retail experience by creating a frictionless and convenient shopping environment for end customers. A BCG report mentioned that brands that create personalized experiences by integrating advanced digital technologies and proprietary data for customers are seeing revenue increase by 6% to 10% — two to three times faster than those who don’t, hinting at how this integration is the need of the hour for retailers.

Taco Bell, a QSR brand had a jumpstart here when it allowed customers to order food through AI. Their AI bot (called Tacobot) works with Slack to make it easy for customers to place their orders. Following each order, the bot in typical Taco Bell fashion responds with witty and clever remarks, establishing a connection with the customers.

Beauty brand Sephora too leveraged the power of AI to improve their in-store experience. Their bot ColorIQ scans the customer’s face and recommends personalized items based on its analysis.

By bringing AI-powered devices like kiosks, digital signage, self-checkout, and others, retailers can create seamless in-store experiences for their customers.

5. Targeted Promotion To Nudge The Customer To Make a Purchase

AI’s ability to create highly targeted promotions has become a game-changer in the retail loyalty landscape. By analyzing vast datasets, AI can understand customer preferences, behaviors, and purchasing habits. This allows retailers to tailor promotions that nudges customers to make a purchase.

Consider a beauty retailer for example. Using AI, the retailer can identify if a particular customer often purchases skincare products designed for sensitive skin. They can also notice if this customer frequently engages with content related to organic and cruelty-free beauty products on the retailer’s website. Armed with this information, the retailer can send personalized promotions that offer discounts on premium organic skincare products specifically curated for sensitive skin.

Such personalized promotions not only increase the chances of conversion but also strengthen the customer’s emotional connection with the brand. When customers receive offers that align perfectly with their preferences, they feel valued and appreciated.

6. Personalized Chat Support

AI-driven chat support is a key element in enhancing retail loyalty. It provides customers with personalized assistance, addressing their inquiries and concerns in real-time. An AI-powered chatbot can also offer details about upcoming products tailored to the customer’s preferences, allowing them to place pre-orders for these items in advance. This not only streamlines the shopping experience but also fosters loyalty by delivering efficient and tailored support.

American office supply retail company Staples uses IBM’s AI technology, IBM Watson to run their chatbot service. This integration makes ordering on Staples easier than before. The speech-to-text capabilities of the bot make it easy to place an order or ask a question. You can not only place an order but also track it and share your honest feedback.

The beauty of AI-driven chat support lies in its ability to engage customers in a conversational manner, just as a knowledgeable sales associate would in a physical store. This personalized assistance creates a sense of trust and convenience, which are essential elements of fostering loyalty.

7. Seamless Omnichannel Presence

AI enables retailers to provide customers with a seamless and consistent experience across all retail channels, whether online or offline. This cohesive approach to customer engagement fosters loyalty by allowing customers to switch between channels effortlessly.

A classic example of this seamless omnichannel presence can be found in large retailers like Walmart. Customers can browse products online, check inventory, make purchases, and even schedule in-store pickups, all from the comfort of their homes. If they decide to visit a physical store, they find the same product availability and pricing they saw online.

This level of consistency and convenience ensures that customers can engage with the brand in a way that suits their preferences at any given moment. Whether they prefer online shopping or enjoy the tactile experience of in-store browsing, they can seamlessly transition between these channels without friction. As a result, customers are more likely to remain loyal to retailers that offer such flexibility and convenience in their shopping journey.

8. Setting Dynamic Prices

Dynamic pricing, powered by AI, is a strategy that optimizes prices based on real-time market data. It ensures that customers receive competitive pricing, thereby enhancing their loyalty to retailers that consistently offer fair and competitive prices.

Companies like Amazon, and Walmart, and airlines like Delta and United have implemented dynamic pricing algorithms to adjust prices in real-time based on factors such as demand, inventory levels, competitor prices, and customer behavior.

This dynamic pricing strategy not only attracts price-sensitive customers but also maintains a competitive edge for the airline. By providing customers with optimal pricing, AI-driven dynamic pricing creates a sense of trust and fairness. Customers are more likely to choose airlines that offer transparent and competitive pricing, leading to increased loyalty.

9. AR Product Try-On

Augmented Reality (AR) product try-on is another innovative feature transforming the retail industry. It allows customers to virtually try on products before making a purchase, significantly enhancing their shopping experience and driving loyalty to brands that offer this feature.

Companies like Apple and IKEA have utilized augmented reality (AR) to enable customers to visualize how products would appear in their living spaces. High-end retailer PRADA is another company that has successfully implemented this technology to create an enriching and smooth experience for their customers.

This feature not only adds an element of fun and interactivity to the shopping process but also reduces the uncertainty associated with online shopping. Customers can confidently select items that suit their style and preferences. As a result, they are less likely to return products due to mismatched expectations, leading to increased satisfaction and loyalty.

10. Data Security and Privacy Controls

According to a Payments Journal article, direct and indirect losses from loyalty and rewards points are estimated to be more than $1 Billion, signaling immediate action for fraud detection and prevention.

AI-powered fraud detection systems are essential for ensuring a safe and secure shopping environment, which in turn fosters trust and loyalty among customers while upholding data security and privacy. These systems protect customers from online scams and breaches.

Consider a scenario where a customer shops at an online marketplace. AI algorithms constantly monitor transactions for suspicious activities, such as unusually large purchases or orders from unfamiliar locations. If any suspicious activity is detected, the system can trigger additional verification steps, such as sending a one-time authentication code to the customer’s phone.

The transformation that AI is bringing to retail loyalty solutions is not limited to these ten features. Over the years more and more innovations will take place in the generative loyalty space that will redefine retail businesses. We at Capillary are working and innovating our product suite to cater to these upcoming advancements that will help our clients foster long-lasting relationships with their customers.

As businesses continue to harness the power of AI to tailor personalized rewards, provide anticipatory recommendations, and ensure seamless omnichannel experiences, they are building deeper connections with their customers.

The result?

Increased loyalty, trust, and satisfaction that not only ensures the survival of brands in a fiercely competitive market but also propel them toward future success. As we stand on the cusp of this AI-driven retail revolution, one thing is clear: the future of retail loyalty is here, and it’s powered by the relentless innovation of AI.

Capillary’s AI-powered product suite and loyalty platform can help you kickstart your journey towards creating delightful and memorable experiences for your customer and nurture long term loyalty. Get in touch with us now.

Loyalty & New Technology: Web3, Generative Loyalty, & More

Posted on March 26, 2024 by Trevor Antley

This article features insights into new technology and customer loyalty, including Generative Loyalty from Capillary, Web3, and the Metaverse, along with how to determine loyalty program ROI, from Clarissa Schealer, SVP of Sales (North America) at Capillary Technologies. This is Part 2 of the transcript of a recent video uploaded to Capillary Tech’s YouTube Channel (February 20, 2024). You can read Part 1 of the video transcript here. The original video is part of Capillary’s #LoyaltyOutlook2024 video series.

What is Generative Loyalty? And how can businesses leverage it?

Generative Loyalty is about making data useful. Making data useful accomplishes a few things, including giving your shoppers an amazing customer experience (CX). We’re going to get to know them at a human level. When we hear AI, we think artificial intelligence, but what it’s really doing is humanizing the customer experience. We’re taking what we learned about you: what we all do in everyday life, our friendships, our work, etc.. We’re taking in things we learn about you, reacting to them, and engaging with you based on what we’ve learned. This allows a brand to do the very same thing.

We will take in everything we’ve learned and maybe surprise and delight or treat you differently than your friend because we know you are different. That human-centered data is really driven into the program. Your consumers aren’t going to be treated like just a number. They’re not just that identifier that lives in the system. We’re going to know them — the different behaviors of that individual. Do they shop online and in stores? Are they coming online and learning about the product, then going in-store and trying it on, and then going back and purchasing it online? Or are they traveling with me for business but never staying in one of my hotels when their family is out? Right?

We want to understand who they really are and then leverage the next best step for that individual, so we’re not just giving these cookie-cutter rewards. We’re doing elements of surprise and delight for individual consumers based on who they are.

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How do you see new trends like Web3 or the Metaverse being part of the loyalty experience?

There are certainly things that have become trendy or catchy in customer loyalty. You want to be careful to make those choices efficiently, whether it’s opening a virtual store or leveraging social. You want to ensure that the ultimate goal again is to give a good experience and drive revenue.

Customer lifetime value (CLV) is critical. How often does a shopper come in? Is their basket size growing? Did I encourage or motivate that additional purchase? Did I motivate a behavior outside their norm? If they’re always buying pants, did they come in and buy a top the next time? If they only flew to Chicago on business, did they take their family to Florida?

Really motivating that change in customer behavior is what’s critical. That’s what we at Capillary really look for. We’re not just that punch card who’s just tallying points and issuing rewards. We’re looking at giving a good experience that motivates change in behavior.

As a brand manager or business manager, how should I look at ROI from a loyalty program?

Everything is about giving that consumer a great experience. The reason we want to provide a great customer experience (CX) is to generate revenue. It’s to keep them coming back; it’s to improve their future lifetime value, which is something I think that brands really need to pay attention to. Are these shoppers coming once and then churning? Are they coming over and over and spending more and more money? Or is the duration between visits or between purchases shortening? Are we getting closer to the consumer and getting them to come back and engage more?

Loyalty is really the way to drive revenue by improving future lifetime value. The customer lifetime value (CLV) will grow, and that in turn is going to make revenue grow. We’re seeing brands that are increasing revenue 20%, that are improving customer happiness by over 50%. Again, there is that integral tie between happiness and purchase.

If we love a brand, we feel comfortable, just like when you walk into your favorite bar, and everyone knows you and says hi and has your favorite drink ready to go. When that experience happens, you’re going to come back again and again. That’s going to be your go-to place. Maybe they’re going to recommend a new cocktail because they know what you like, and that’s going to make you comfortable coming there. We want consumers to feel comfortable coming to your brand over and over because that’s going to grow revenue, and they’ll spend more with you.

Conclusion

Capillary Technologies provides the top SaaS loyalty and rewards platform solution for CPG brands. Our loyalty strategists and data consultants, combined with an industry-praised technology platform, can help brands improve their engagement strategies through data analysis.

By collaborating with the Capillary and Brierley loyalty experts, brands can navigate the intricacies of data analytics, unravel insightful findings, and craft engagement strategies that resonate with their unique customer base. Contact us today to learn more!

Trevor Antley edited the transcript for this blog.

Banking on Digitisation: CX BFSI UK Exchange Highlights and Insights

Posted on March 25, 2024 by Vicki Wickens

Our European team attended the CX BFSI UK Exchange in London earlier this month and it was a packed two-day summit with thought-provoking discussions and valuable insights. Throughout the event, some key themes emerged that gave us real food for thought. There’s no doubt that In today’s financial climate, securing budgets for Customer Experience (CX) initiatives can feel like an uphill battle, with the demand for operational efficiency and cost reduction often overshadowing the potential for incremental gains and profitability, particularly in the consumer banking sector. Many banks have tried to improve the customer experience through incentives and rewards, without success. These experiences, lacking a personalised touch within a curated environment, have failed to drive high levels of engagement with the banks digital assets, resulting in little appetite to focus on investment in this area, despite the potential to reduce cost-to-contact ratio by incentivising customers to move to these channels and increase self-service.

As we engaged with the sessions, it became evident that daily banking, often viewed as a loss-leader, holds the key to unlocking an engaged, loyal customer base who provide opportunity to consume a wider range of more profitable financial products. The potential to deliver intelligent, real-time product up-sell and cross-sell opportunities within the banking experience through effective digitisation, incentive & reward can be the new reality. Imagine personalised product recommendations based on a customer’s balance fluctuations, loan behaviour, and mortgage activity? With advances in technology and open banking capabilities, building a true understanding of a customer and determining their value to the bank is achievable without a huge amount of effort, using the right partner.

Strategic Investment in CX

Recognising that investment in customer experience is not simply an expense, but a cornerstone for building enduring customer relationships that are mutually beneficial, fostering loyalty, delivering value and achieving differentiation within this increasingly competitive marketplace, is paramount. The relentless focus on cost reduction, while understandable and often a necessity, can obscure the potential for the significant gains available to those forward-thinking organisations who build customer-centric strategies focused on digitisation that drive operational efficiency while offering incentive to change customer behaviour. The majority of banks find themselves at a crossroads, navigating a tightrope between immediate financial objectives and the long-term imperative of building stronger customer connections.

The Power of Personalisation in Achieving Higher Engagement

Banking institutions that have experimented with rewards programs frequently encounter a common obstacle: a lack of meaningful engagement from their consumers. This challenge stems from the generic “one size fits all” nature of the rewards and incentives, where customers are sent impersonal offers that fail to resonate with their individual needs, preferences, and behaviours. Without this personalised touch, any reward loses its effectiveness and fails to capture customer attention or loyalty, and can oftentimes lead to dissatisfaction and lower CSAT scores. Despite good intentions, oftentimes banks struggle to achieve the desired level of participation and engagement within their rewards programs, which is surprising when you consider just how much relevant information they have on each individual customer. The key takeaway here is the importance of utilising that data to curate and tailor rewards and incentives to each customer’s unique profile, creating an experience that delivers genuine value and fosters engagement.

Intelligent Upselling: A Paradigm Shift

As we came to the last few sessions at the CX Exchange, it became clear that everyday banking, while traditionally viewed as a loss leader, is actually a hidden gem within the financial landscape, serving as a gateway to establishing authentic relationships with customers, and paving the way for deeper engagement with a wider prospect pool to consume more profitable financial products and services. Understanding the value of each individual customer, building and segmenting those customers based on that value is where the real innovation lies, using intelligent algorithms and data-driven insights that draw on the pool of existing information many banks hold, to drive profitability and redefine the boundaries for up-selling and cross-selling across their product portfolio. By leveraging technology and advanced analytics, recommendations can be meticulously tailored to each individual’s financial behaviour. This paradigm shift presents a monumental opportunity for financial institutions to not only meet but exceed customer expectations, ultimately fostering deeper trust and loyalty while driving growth, and improving operational efficiency through digitisation.

Your partner in Customer Engagement, Incentive & Reward

Capillary’s comprehensive suite of products and services empowers banks and financial service providers with cutting-edge tools to manage customer engagement, automation, incentive & reward management. We help our clients realise the potential of digitisation in driving operational efficiency through the creation of truly personalised incentive and reward programs that help build meaningful, profitable relationships with their customers. If we didn’t manage to connect with you at the event, please do not hesitate to reach out to the team to learn more about how we can empower your teams to unlock the full potential of customer-centric experiences that change behaviour and deliver business outcomes.

Retail Media Networks and Loyalty Programs: A Profit-Boosting Partnership

Posted on March 25, 2024 by Anjali Pillai

Here’s a channel that is redefining the way brands advertise! Going beyond the digital ads, it creates a win-win situation for brands, advertisers, and end customers.

Introducing Retail Media Network, the next big advertising channel, as Forbes likes to call it.

With retail media advertising expected to grow by about 60% by 2027, it is all set to overtake digital ads as a major advertising channel and disrupt the advertising space.

Given the growing popularity of Retail media networks (RMNs), it is now more important than ever for brands to explore how they can generate an extra revenue stream through RMNs while also adding more value to their customers. But the key to this boils down to having a highly lucrative and effective loyalty program software. And this is what we try to explore through this blog.

How Does a Retail Media Network Work

Consider two brands, let’s call them brand A and brand B. You are scrolling through the mobile app of brand A, but you notice a similar product ad being shown, but just that it’s of Brand B.

How can this happen? Why are you seeing another brand’s product on Brand A’s mobile app?

Welcome to the world of retail media networks or RMNs. In simple words, it’s a fancy term for retailers using their own digital platforms to sell advertising space to brands. Think of it as a way for retailers to make some extra revenue by letting other companies promote their products to shoppers who are already browsing their website or app.

Retail media networks have been in existence for quite some time now. E-commerce giant Amazon has been dominating this space for a while now with an impressive share of 76.9%.

And there’s a strong pillar that adds this extra layer of income for Amazon, their 230 million members strong loyalty program; Amazon Prime.

How Loyalty Programs Can Generate Revenue Through Retail Media Networks

While loyalty programs are by themselves a great revenue generator for businesses, they also open up a new revenue stream through RMNs.

A brand running loyalty programs has one of the biggest treasure troves, access to first-party data about their customers. The end-to-end customer behavior data that loyalty programs bring in can be used to open up their platforms for other similar retailers to reach and target this customer base. They can use this customer data to create audience segments to deliver highly targeted ads and offers and also reach new customers. Retail media networks create a win-win situation for both brands and advertising retailers.

Retailers looking to advertise can use RMNs by brands to:

reach a broader audience
reach target audience segments
generate higher ROI

In the case of brands with loyalty programs, RMNs create an

an added layer of revenue through the ads placed and,
add more value to their existing customers by showcasing products and offers that are more relevant to them

The success of this partnership boils down to the accuracy of the data and insights that loyalty programs can provide. Brands planning to create their retail media networks need sharp customer insights that go beyond purchase history and recent searches. This is where Capillary’s Insights+ can help in understanding data that can be used to create ads that are more relevant and less intrusive.

Popular Retail Media Networks Ruling the Space

How Amazon became one of the biggest retail media networks

Amazon’s retail media network is known as Amazon Advertising and it operates through various channels such as Amazon.com, Amazon devices (like Kindle and Fire TV), and Amazon-owned platforms like IMDb and Twitch. Brands can place ads on Amazon’s website and app, targeting specific products, categories, or even individual shoppers based on their browsing and purchase history. Amazon offers various ad formats, including sponsored products, sponsored brands, and display ads

Expanding retail media network to physical stores through Walmart Connect

Walmart’s retail media network, known as Walmart Connect, offers an added advantage over Amazon through its physical stores. Through Walmart Connect, brands can place ads on Walmart’s in-store digital displays, website, and mobile app, targeting shoppers based on their demographics, interests, and shopping behavior. While the revenue through Walmart Connect stood at 2.1 billion US dollars in 2021, it is expected to reach 4 billion US dollars in 2024.

Retail media network in grocery retail through Instacart

Instacart’s retail media network allows brands to place ads within its grocery delivery platform. Brands can target shoppers based on their shopping habits, preferences, and location, reaching them while they are actively browsing for groceries online. Instacart offers various ad formats, including sponsored product listings and banner ads, providing brands with opportunities to increase product visibility and drive sales.

Read: 5 Best Grocery Loyalty Programs from APAC and MEA

Challenges and Considerations in Retail Media Space

We are still in the early days of RMNs, with brands still exploring the best possible ways to make RMNs a part of their customer experience as well. It comes with challenges and considerations at this stage, a few of which are listed below:

According to the Wakefield study, 99% of respondents say that the retail media network requires a minimum audience of 6 million monthly, creating a hurdle for smaller and upcoming brands to compete with the larger RMNs in existence.

In its current state RMNs offer more targeted ads and not personalized ones. Though the ads will be highly relevant to the customers, adding more value to their experience, personalization is still far from reality. With more emphasis on AI and ML in the coming years, we can hope to see more advancements in this area.

A brand with its own RMN needs to tailor their vast data to the brands buying the data. They will have a huge set of data through their loyalty programs but not all this will be needed for the advertising. They can segment their customer data and trim it down to the requirements of the buyer brand, thus ensuring effective targeting by reaching only the customers who will benefit from this targeting

Considering the fact that RMNs are nothing but data monetization, it is natural to ponder over the data privacy concerns. However, the ethical principle to run your own RMN is about protecting data through a secure data collaboration, which uses anonymized customer data and does not expose any personally identifiable information (PII).

As of now, while industries like CPG and retail heavily rely on RMNs, a recent study by McKinsey found that more than 75% of non-CPG brands plan to increase their spend with media networks in the coming years. Thus, opening avenues and opportunities for media networks outside of retail.

With newer and innovative ad formats like shoppable video ads etc. waiting to enhance the customer experience, retail media networks are creating new waves in the loyalty landscape. This brings us back to what we mentioned in the beginning- Retail media networks are the next best advertising channels.

Kickstart your journey towards creating a successful RMN with a strong loyalty program. Get in touch with us now!

CPG & Customer Loyalty: Insights from Clarissa Schealer

Posted on March 21, 2024 by Trevor Antley

Introduction

This article features Clarissa Schealer, SVP of Sales (North America) at Capillary Technologies. The article is based on a transcript of a recent video uploaded to Capillary Tech’s YouTube Channel on February 20, 2024. The original video is part of Capillary’s #LoyaltyOutlook2024 video series.

CPG Loyalty & Industry Insights from Clarissa Schealer

I’m Clarissa Schealer, and I’m the SVP of Sales in North America. I’ve always been interested in human behavior and how to motivate change. Having said that, I’ve ended up being everywhere from billboard advertising all the way through every facet of marketing technology and loyalty. The continuity across all of those experiences was finding creative ways to motivate human behavior and to use data to make behavioral changes and help brands grow.

How Important Is It for CPG Brands to Leverage Loyalty to Grow Their Business?

Leveraging loyalty marketing has certainly become important for CPG [Consumer Packaged Goods] brands for many reasons. One is that it’s one of the few ways for a CPG brand to gather consumer data. There is that distance between them because there are multiple purchase paths, and having that direct connection is key to acquiring data for CPG brands. Historically, CPG brands used loyalty to scan a QR code, much like a punch card, right, where you’re just keeping track of what they bought and then rewarding them for the next purchase.

The CPG space needs to embrace motivating change. It’s important to begin looking at things like milestones as well. For example, maybe I’m a brand that sells baby care products, and a shopper purchased diapers from me but never baby food. You would be able to see that data, know what SKUs have been purchased, and then offer rewards for purchasing across categories. So, I bought diapers and baby food, and I got extra rewards for that. Maybe I got free samples and unlocked access to products I’d never purchased before. We can even look at it from the perspective of stock. I may have an overstock of certain products in my warehouse, and I want to offer double points or buy one get one on those products to my best shoppers.

Loyalty is a great way to look at all sorts of business challenges. Motivating that change in customer behavior to encourage cross-purchases is an area where CPG brands can really leverage loyalty. Again, whether it’s moving excess stock or encouraging cross-category purchasing, there are lots of ways loyalty can be useful for CPG.

How Does a CPG Brand That Wants to Leverage a Loyalty Program Go About It?

It’s really key for CPG brands to choose a Martech loyalty solution that can come and easily integrate with all of your other tools and offer that consultative service as well. CPG businesses need a partner who’s got that marriage of technology and consultation. So, not only are they giving you a robust platform, but they’re also telling you how to use it. They’re leveraging in-solution AI and human power around you as well. So, finding a solution that gives you that 360⁰ degree use of loyalty is key.

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How Can Managed-SaaS Help CPG Brands Build and Execute Their Loyalty Programs?

Capillary is really a purpose-built loyalty solution, but we’re also couched in human expertise, and that’s a magical combination because we are certainly leveraging data; we’re leveraging AI with Generative Loyalty. Still, we have that human capital of experts that have been doing this for over 20 years, and they can really bring to the table those best practices, those ideas, and support you. And certainly, fill in the gaps because your team might not have the bandwidth to think of new ideas and implement new strategies, and that’s where our team can come in again and fill in those gaps and help you create a robust solution.

It'll start in a few ways. We’ll certainly do a deep discovery and get to understand the business challenges you might have. And again, those business challenges might not be just about loyalty. It could be challenges that your finance team is experiencing, or your logistics team is experiencing, and we’ll do a deep dive to understand all the business challenges and then figure out ways that loyalty can help you solve those.

We’ll start onboarding your data and taking a look at data because that is truly the foundation of loyalty, and we’ll start to understand your customers, and then we’ll run it through our solution, which is with different AI nudges for example. That will show us whether your shoppers are behaving as we thought, and then we will show you the data and provide recommendations. Then, alongside all that data and the SaaS platform, are also those experts in loyalty who’ll be by your side to guide you with additional recommendations and any other consultation you may need.

Conclusion

Trevor Antley edited the transcript for this blog.

In the New World of Retail AI, Knowledge Is Power, and Being Aware of the Data Nuances That Come with It

Posted on March 12, 2024 by Clarissa Schealer

Capillary was thrilled to attend eTail 2024, the premier retail marketing event, for its 25th anniversary February 26-29 in Palm Springs, California. This prestigious event brought together brands, leaders, and visionaries to discuss the ever-evolving retail and eCommerce industries. eTail also brought plenty of networking opportunities and unique experiences for attendees, including a casino night, pickleball, and a custom-made 100-pound donut!

(Photo credit – Clarissa Schealer)

The Future of Retail

This year’s event promised to be packed with innovations, expert insights, and strategies for retailers looking to stay ahead of the curve and it certainly didn’t disappoint. Designed to inspire innovation and foster meaningful relationships, eTail brought impressive sessions and speakers. Some key takeaways include:

Seamless Omnichannel Experiences: Mastering the Art of Personalization

Creating seamless and frictionless experiences for consumers is critical in driving loyalty and increasing consumer satisfaction for your brand. With the rise of consumer expectations, it is more important than ever to make each and every interaction (physical and digital) with your brand highly personable, memorable, and seamless.

It’s easy to want to provide these seamless and frictionless experiences, but it is an absolute necessity to have the right tech stack in place to actually make it happen. Clunky or siloed technologies can cause increased friction that limits personalized experiences, decreasing the customer experience and customer loyalty.

Elevating the Customer Experience: Cross-Channel Marketing

Another primary topic during the event was directed at avoiding generic and ‘one-size-fits-all’ strategies for your consumers. Instead, tailor your approaches to the specific channels that your consumer engages with. Recognize and understand the unique preferences and expectations of your consumers on different platforms, whether it’s social media, email, SMS, in-store, or omnichannel, brands need to adapt to their preferred platforms. By building consumer journeys that align with their needs and expectations on each channel, you can create a more personalized experience, fostering stronger connections and engagement with your consumers. If you’re doing this approach correctly, it ensures that your interactions are not only relevant but also resonate authentically with your audience across various touchpoints.

(Photo credit – Jason Panici)

The AI Revolution:

Artificial Intelligence was obviously prevalent throughout the entire conference. There wasn’t one conversation we had where AI was not a primary theme. Understanding and questioning your AI’s source, accuracy and underlying data is imperative to powering your operations. The effectiveness of AI hinges on the quality and relevance of the data it’s trained on, it’s not about just having AI within your services, but about understanding the foundation it stands on. If your AI is not powered by your true consumer data, you are missing the chance to connect with your consumer fully. In this new world of AI, knowledge is power, and being aware of the data nuances that come with that, allows brands to use AI to truly engage with their consumer while still creating a valuable experience for them.

Capillary takes AI a step further with Generative Loyalty, our state-of-the-art approach to customer loyalty. Our Generative Loyalty framework incorporates artificial intelligence (AI) and large language models (LLMs) to create and enhance loyalty programs with robust capabilities, with a human touch. Powered by the latest innovations in AI, Generative Loyalty can make loyalty programs hyper-personalized, more dynamic, and more engaging than ever.

Generative loyalty continually self-generates campaigns and incentives, allowing loyalty insights to drive contextualized messaging to be constantly reinvented. As the most cutting-edge loyalty solution, Generative Loyalty maximizes customer engagement and optimizes return on investment (ROI).

Connect with Capillary

Capillary’s suite of products and services offers retailers cutting-edge tools for customer engagement and loyalty management – helping retailers unleash the power of customer data, transforming it into actionable insights that drive profitability and a personalized customer experience (CX). If you didn’t have the chance to connect with the team in Palm Springs, reach out to learn more about our GenAI-powered customer loyalty innovations that transform customer engagement and customer experience in the retail ecosystem.

See you next year in Palm Springs for eTail 2025!

Essential Strategies For Ramadan Marketing: Win Hearts and Wallets Through Loyalty Programs

Posted on March 8, 2024 by Anjali Pillai

With the delectable flavors of Iftar and the heartfelt serenity of dua; the world is gearing up for the holy month of Ramadan, filling the air with goodness, warmth, and spiritual renewal.

It is also the time for brands to gear up for their Ramadan marketing and use their loyalty programs to create campaigns that:

engage their customers
attract new customers
re-activate their lapsed customers, and
build a deeper emotional connection with them

Did you know that 86% of regional consumers think Ramadan is the ideal time to find the best deals?

An added bonus during this month is that it coincides with spring break, making it ideal for brands to double down on their activities to add value and create delightful experiences for their customers.

Here’s the complete guide to help you make best of your loyalty program during the month of Ramadan.

Ramadan Marketing: Consumer Behavior and Trends

The 4 Phases of Ramadan Celebration

The first step to creating valuable experiences for your loyal customers is to understand how they behave around Ramadan month. Besides the MENA region, Ramadan is a monumental festival in Southeast Asian Countries like Singapore, Malaysia, and Indonesia.

According to Branding in Asia, Singapore experienced the most significant year-over-year sales growth in 2023, with a 19% increase in retail transactions, while Malaysia witnessed a 17% rise in year-over-year sales, indicating robust consumer spending during the festive season.

While there might be a slight shift in trends in these different regions, the larger picture of the celebration remains the same.

Understanding how consumers spend during Ramadan

Customers have a Ramadan shopping budget set aside as the month serves as a time of increased spending, with individuals seeking gifts, food, and services to commemorate the occasion.

According to a Google study, 56% of people who celebrate Ramadan in Saudi, 64% in UAE, and 74% in Egypt say they’d spend more during the holy month, opening opportunities for brands to increase the wallet share of their customers. In Southeast Asian markets, Singapore and Malaysia are anticipated to experience comparatively restrained growth in consumer expenditure.

An emotional sentiment that brands need to understand is that people don’t buy things just for themselves during this season but also for others. It can be for their friends and family and even for charity. According to the study, in 2023, 59% of people spent more on charity during Ramadan compared to 2022.

Four major shoppers during Ramadan

While brands seek to create valuable experiences through their loyalty programs, value can mean different things to different people. For some value can be associated with price, while for some it can be associated with a greener cause or even convenience. And that is why it is important to categorize your shoppers. There are different kinds of shoppers during the Ramadan month and it would be easier to split them in the above shown categories.

Industries that are high in demand during Ramadan

While food and beverages did take up 23%+ of the market share last year, Ramadan season is not just limited to the F&B industry. It is also the time people slot in their travel plans, leading to an increase in online bookings.

Think With Google

In 2023, online bookings were up 16%, just three days before Eid. This indicates a great opportunity for the hospitality and travel industry to level up their marketing during Ramadan.

Cleaning up and decorating the house is common during any festive season, and during Ramadan home decor items see a huge surge in demand.

Along with this comes the preparation for family gatherings and functions, which leads to an increase in demand for apparel, clothes, and beauty products. Apparel and accessories alone amounted to 30+ % of the sales last year.

Key Strategies for Leveraging Loyalty Programs

1. Creating Customer Journeys

Brands can leverage the journeys feature in their loyalty program during Ramadan to create dynamic and engaging experiences for their customers.

Firstly, they can design specific Ramadan-themed journeys for their Ramadan marketing strategies that guide customers through key moments and activities during the month, such as preparation for iftar, shopping for Eid gifts, or participating in charitable initiatives.

Additionally, brands can use the journeys feature to facilitate community engagement, encouraging customers to share their Ramadan traditions, recipes, and experiences, nurturing customer loyalty.

Journeys is one of the highlight features of Capillary’s product suite and one of the most loved ones by our clients.

2. Personalizing Your Communication

Understanding when and where your customers are most active strengthens your communication. In case of Ramadan, customers are active at odd hours, like during the crack of dawn.

Packaging your communication using hyper-personalization is a clear winner and we at Capillary can guarantee that based on the success we have seen for our clients in the past.

Our clients also get an AI helper, our very own Aira, to help craft converting messages that adapt its messaging for different customer cohorts and channels. Know more about Aira here.

You can also reach new customers using relevant ads. With Capillary’s Engage+, brands can create personalized ads with complex segmentation filters, reaching their best customers and scaling their returns through lookalike audiences.

4. Adding Gamification to Your Loyalty Programs

Believe it or not, Ramadan is a time when people are searching for exciting games. Search trends indicate an increased interest among users in group-oriented games during Ramadan.

This is the perfect opportunity to consider adding gamification to your loyalty program to engage, delight, and reward your customers. In case you are wondering how to get started on that, here’s our guide on taking the gamification plunge.

5. Incorporating an Omnichannel Approach

During this festive period, consumers often engage with brands across various touchpoints, including online platforms, social media, physical stores, and mobile apps. By adopting an omnichannel approach, brands can ensure a seamless and consistent experience for customers regardless of the channel they choose to interact with.

6. Engage Customers With Innovative Rewards

During the Ramadan month, brands have a unique opportunity to leverage their loyalty programs to offer exciting and exclusive rewards that resonate with the customers and enhance their overall brand experience.

One effective strategy is to tailor rewards specifically for Ramadan-related activities and purchases, such as special discounts on iftar essentials, exclusive access to themed events or virtual gatherings, or bonus points for charitable donations made through the loyalty program.

7. Leverage Data Analytics to Understand And Anticipate Customer

By diving deep into the data, brands can uncover hidden patterns and trends during the holy month, enabling them to predict customer needs and desires. This means being able to stay one step ahead in offering value that truly resonates with customers. This is where Capillary’s Insights+ shines bright. By tapping into Insights+, brands gain a comprehensive understanding of their customer base, unraveling intricate patterns and preferences that shape purchasing behaviors.

Conclusion

Ramadan might be a month-long festival, but its impact lasts far beyond, presenting ongoing opportunities for brands to elevate their connection with customers. Reach out to our experts now to explore how Capillary’s Loyalty+ can elevate your Ramadan marketing efforts.

5 Ways Loyalty Programs Are Giving Fashion Retail a “Makeover”

Posted on March 7, 2024 by Anjali Pillai

A constant state of uncertainty, economic restraints, persistent inflation, and weak consumer confidence.

According to McKinsey’s ‘The State of Fashion’ report 2024, these are the major challenges looking at the face of fashion businesses across the globe.

With these challenges looming large, fashion companies, both luxury and non-luxury sectors, need to adapt to the technological shifts, capitalize on the right opportunities, predict upcoming trends to cater to the changing consumer preferences and thrive in the competitive landscape that 2024 will present. And at the helm of this are fashion loyalty programs.

There could not be a better time for fashion retailers to dive into the world of loyalty programs. Loyalty programs are not just a contingency plan for fashion retailers, but an assurance for a long-lasting business. In the face of economic uncertainty and rapid technological advancements, loyalty programs lay the platform for brands to nurture customer relationships, and seamlessly tackle all the challenges that the current climate poses.

Wondering how exactly loyalty programs make this happen? Read along to find out 5 ways fashion loyalty programs ditching the one-size-fits-all approach and are transforming the industry for good

1. Crafting Tailored Experiences Through Personalization

The key to any great loyalty program lies in making it personal. When it comes to fashion retail, personalization can include anything from tailoring product recommendations that best match your customers to curating customized rewards that excite them.

Some fashion retailers are taking their personalization to the next level by offering personalized styling suggestions. The best example of this would be UNIQLO’s membership program. When a customer registers on their membership app and fill in their details such as gender, age, size preferences, and style preferences, UNIQLO uses it along with other data like purchase history, to create personalized styling suggestions for their customers.

When it comes to sending out personalized messaging, fashion brands also leverage the power of omnichannel communication. With omnichannel communication, retailers can transcend beyond the traditional single-channel approach to offer more personalized communications across all possible channels when and where the customers are most active. Whether browsing online, visiting a store, or using a mobile app, brands can integrate personalized communications across all customer touch points. Taking it a notch higher are nudges that help you send the right message to the right customer at the right time.

2. Sustainability to Gauge Trust and Reputation

This is the era of conscious shoppers. Value-motivated consumerism is the new buzzword in town with shoppers showing affinity towards brands that align with their value systems.

According to a survey, 63% of respondents say that sustainability is crucial for staying loyal to a brand. By incorporating sustainability into their loyalty programs, fashion brands can build customer loyalty and advocacy through shared values.

Famous fashion retailer H&M has earned a reputation for adding a sustainability angle to their loyalty programs. They reward their members for aligning with the company’s broader sustainability efforts. Bringing your own bags, recycling your old clothes, and opting for climate-smart delivery are a few of the options where their members get rewarded for conscious choices.

Such incentives cater to consumers who increasingly demand transparency and accountability from the brands they support.

Making sustainability a part of their loyalty programs has the potential to shift from solely transactional interactions to fostering deeper, more personalized relationships, where customers feel seen, heard, and understood.

3. Nurturing Exclusivity Through Exciting and Relevant incentives

Who doesn’t like to feel special? Loyalty programs offer a great opportunity for fashion brands to make their customers feel special and valued through exclusive incentives.

Calling dibs on member-only sales, offering an advanced sneak peek at the upcoming designs on these sales, and invitations to industry events, are just a few of the many possible ways brands can make sure to keep their loyal customers on the pedestal.

Arvind is one of the fashion brands that is making waves within this segment with their loyalty programs. It has several major brands within its umbrella and with its tiered-based loyalty program, Arvind offers a lot to its premium customers. Early access to End of Season Sale (EOSS), and exclusive seasonal and personalized campaigns where they offer relevant offers on the entire purchase of the customer, etc. would be a few to mention. This way they are able to create a feeling of exclusivity among their premium members and encourage their customers to jump to this premium status.

There’s a lot of space for brands to get innovative here with their incentives. Did you know that Myntra’s loyalty program, Myntra Insider offers a members-only stylist consultation? For a segment of customers that is looking to identify the best styles that suit them, such offers are too compelling to resist.

4. Seamless “Phygital” Shopping Experience

Is the future of retail brick-and-mortar stores or digital storefronts?

This is a question several fashion retailers have been grappling with for quite some time. And the answer to this question lies in this one word- “phygital”.

Phygital shopping allows the customer to seamlessly switch between offline and online touchpoints, thus bringing the best of both worlds.

Let’s say you’re scrolling through a fashion retailer’s website and come across a dress you like. Instead of making an immediate purchase online, you decide to visit the brand’s physical store to try them on. Impressed by how the dress fits and looks, you decide to make a purchase. At the checkout counter, you use your smartphone to complete the transaction, earning loyalty points that you can use for future online or in-store purchases.

By blending offline and online shopping experiences, phygital shopping is creating the next big wave in the way customers interact with brands.

Making the phytigal experience a part of the loyalty program allows customers to:

– redeem their rewards across both offline and online stores
– check a product online and then go to the physical store to try on
– shop through live streams
– pay through digital wallets
– get live updates while customers are still in the store, and many more.

According to a Forrester study, phygital experience led to a 17% increase in lead conversion and a whopping 59% increase in cross-sell and upsell ratio. The most telling piece of this data is how phygital experience boosts the business of brands along with creating satisfying customer experience.

To know more about Phytigal shopping, read our blog

Getting a 360-degree view of the customers is a cornerstone for creating a seamless phygital experience, and that demands the availability of an efficient customer data platform that can help unlock value for your customers. Capillary’s Customer Data Platform called CDP+ is one of the most comprehensive intelligence software out there that gathers data from different touchpoints and pieces them together to create a single view of your customer.

Learn more about Capillary’s Customer Data Platform

5. Staying Updated on the Changing Trends with AI

A great Greek philosopher once said that “change is the only constant”. The same applies even in the fashion scene.

Every now and then, new trends pick up and people’s interest in outfits and style keeps changing accordingly. This is one of the key challenges faced by fashion retailers. But with AI-powered loyalty programs or generative loyalty as we like to call it at Capillary, staying up to date on these changing dynamics can’t get easier.

Through sophisticated data collection and analytics capabilities, these programs enable fashion retailers to not only understand current trends but also anticipate future shifts in consumer preferences and predict their buying behavior. These programs harness AI algorithms to analyze vast amounts of customer data, including purchase history, browsing behavior, and social media interactions, enabling brands to adapt their product offerings and marketing strategies swiftly.

AI is also playing a crucial role in enhancing customer service with advanced chatbots and virtual assistants that help customers with their queries in real-time.

Conclusion

As the fashion retail landscape continues to evolve, loyalty programs emerge as the lynchpin for sustainable growth and customer engagement. At Capillary Technologies, we’re at the forefront of revolutionizing fashion retail, leveraging our cutting-edge AI-powered solutions to create loyalty programs that help win customers’ hearts and wallets.

Contact us today to discover how Capillary can help you create best-in-class loyalty programs that elevate your brand and deliver exceptional customer experiences.

1. Tailoring Personalized Rewards

2. Creating Personalized Recommendations

3. Predictive Analytics to Understand Customer Needs Better

4. Improved In-Store Experience

5. Targeted Promotion To Nudge The Customer To Make a Purchase

6. Personalized Chat Support

7. Seamless Omnichannel Presence

8. Setting Dynamic Prices

9. AR Product Try-On

10. Data Security and Privacy Controls

People also ask ⁝

What is Generative Loyalty? And how can businesses leverage it?

How do you see new trends like Web3 or the Metaverse being part of the loyalty experience?

As a brand manager or business manager, how should I look at ROI from a loyalty program?

Conclusion

Strategic Investment in CX

The Power of Personalisation in Achieving Higher Engagement

Intelligent Upselling: A Paradigm Shift

Your partner in Customer Engagement, Incentive & Reward

People also ask ⁝

1. What are the key benefits of digitization in the BFSI sector?

2. How can digital customer experience solutions improve banking services in the UK?

3. What are the latest trends in digitization for the BFSI industry in the UK?

4. How can UK banks leverage AI to enhance their customer experience?

5. What role does digital transformation play in the competitiveness of BFSI firms in the UK?

How Does a Retail Media Network Work

How Loyalty Programs Can Generate Revenue Through Retail Media Networks

Popular Retail Media Networks Ruling the Space

How Amazon became one of the biggest retail media networks

Expanding retail media network to physical stores through Walmart Connect

Retail media network in grocery retail through Instacart

Challenges and Considerations in Retail Media Space

Introduction

CPG Loyalty & Industry Insights from Clarissa Schealer

How Important Is It for CPG Brands to Leverage Loyalty to Grow Their Business?

How Does a CPG Brand That Wants to Leverage a Loyalty Program Go About It?

How Can Managed-SaaS Help CPG Brands Build and Execute Their Loyalty Programs?

Conclusion

The Future of Retail

Seamless Omnichannel Experiences: Mastering the Art of Personalization

Elevating the Customer Experience: Cross-Channel Marketing

The AI Revolution:

Connect with Capillary

Ramadan Marketing: Consumer Behavior and Trends

The 4 Phases of Ramadan Celebration

Understanding how consumers spend during Ramadan

Four major shoppers during Ramadan

Industries that are high in demand during Ramadan

Key Strategies for Leveraging Loyalty Programs

1. Creating Customer Journeys

2. Personalizing Your Communication

4. Adding Gamification to Your Loyalty Programs

5. Incorporating an Omnichannel Approach

6. Engage Customers With Innovative Rewards

7. Leverage Data Analytics to Understand And Anticipate Customer

Conclusion

1. Crafting Tailored Experiences Through Personalization

2. Sustainability to Gauge Trust and Reputation

3. Nurturing Exclusivity Through Exciting and Relevant incentives

4. Seamless “Phygital” Shopping Experience

5. Staying Updated on the Changing Trends with AI

Conclusion

People also ask ⁝