Customer loyalty programs have been around for many years, and smart retailers are adapting them to take full advantage of today’s digital world. In addition to the traditional loyalty-driving benefits, digital loyalty programs can provide retailers with access to customer insights and enable the delivery of innovative experiences that strengthen the relationship between the brand and the customer.
The rising use of digital wallets has changed the loyalty equation, providing a new avenue through which retailers can optimize loyalty programs and build stronger connections with customers. Increased use of and confidence in digital wallets has spurred consumer adoption of digital loyalty programs, which can be integrated with gift cards and other stored value mechanisms to increase engagement with the retailer.
3 Ways Gift Cards Can Bolster Digital Loyalty
Pairing gift cards with a digital loyalty program presents a powerful yet simple opportunity to connect with customers beyond a one-time purchase. Retailers can bolster digital loyalty by using stored value accounts to streamline how reward points are managed, move cash back into a closed-loop account, issue coupons, and store retailer-branded gift cards, all within the retailer’s digital wallet. Here are three of the innovative ways we see our retail clients using stored value to bolster digital loyalty:
- Stored value-centric apps: Retailers are using incentives to fuel stored value accounts within their apps. Doing so promotes customer engagement within the brand’s digital wallet and allows the customer to seamlessly accumulate points for every dollar spent, exchange loyalty points for gift cards, and conduct more commerce with that brand.
- Closed-loop cash rebates: By enabling customers to earn cash back digitally, businesses can replace physical coupons with a closed-loop rewards program that immediately moves funds into a stored value account. Doing so creates a much better experience for the customer, with cash back funds available for redemption almost immediately for a subsequent transaction. Our clients that have implemented closed-loop cash rebates have seen dramatic increases in activity in the first 24 hours, increased savings for customers, and created new ways to engage.
- Cashless transactions: Converting customers who typically use cash to digital transactions improves the value of the loyalty program and strengthens customer engagement between the brand and customer. One strategy to help drive cashless transactions is to encourage the use of stored value as the primary transaction method. Doing so allows the retailer to easily track customer behavior, decreases the cost of payment acceptance, and increases basket size at checkout.
Move Beyond Facilitator to Innovator
Implementing digital loyalty programs is a great way to deliver innovative experiences for customers. Businesses that can seamlessly connect gift cards and other mechanisms of stored value with digital loyalty can create more value for their customer, while also cultivating deeper relationships with their brand. By making loyalty programs easy to use and navigate, creating a better customer experience, and adding in-store value-adds via digital wallets, retailers will stay ahead of the competition.
Tom Niedbalski is vice president, gift solutions at Fiserv, a leading global provider of payments and financial services technology solutions.
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