Huge growth in loyalty in the 2020 pandemic economy

The pandemic economy has led to a strongly increased awareness and a strong reactivation of loyalty and retention programs by marketers globally. We see that 2 trends reinforced each other, leading to a significant higher demand of loyalty and customer experience management expertise and tools.

Trend 1: Renewed priority of current customers

A renewed consideration of the importance of existing customers is no doubt the most important factor for retail marketers to (re)value their customer programs. While stores periodically closed or were less favorable with shoppers due to social distancing, marketers with loyalty programs were able to attract their loyal customers to their webshops, to pick up shopping or to new services created specially due to the pandemic. In the latter category we saw restaurants offering new food & drink concepts and fashion retailers offering local express delivery or online personal styling advice.

Trend 2: Need for direct contact

Having a direct channel to customers has been a second growing reason to run a loyalty program. While social media and banner advertising can reach customers, they come with a high price and are ineffective to mobilize buying customers into changing behavior more drastically as we have seen throughout lockdown periods in several countries. A personalized newsletter powered by loyalty data is a cost effective and powerful tool to persuade avid offline buyers to go online in the current circumstances or to alert customers to a special last minute planned event. Many of our clients have increased mailing – and the use of data in emails to personalize them – with over 250% compared to similar periods before covid-19. And with success.

Success for brands

Globally, trends also favor a strong increase in direct-to-consumer sales by brands, powered by loyalty programs. Nike ‘Just Does It’ with their Nike Membership accumulating over 70 million new members during corona times, while using that program to grow D2C sales at the same time. They show that ‘buying-member growth’ significantly outpaces new- and active-member growth, and growth in member demand is outpacing total digital growth. Amazing results that we expect to will trickle-down to other brands in 2021.