COVID-19 and now a variant omicron is continuing to create challenges when it comes to the retail customer experience. But data, deep insight and loyalty programs, as one expert shares, can help retailers hurdle obstacles and drive revenue.
Retail Customer Experience reached out to Dafna Gabel, VP of insights at PDI Software, which serves the convenience retail and petroleum wholesale markets. In her role she’s focused on helping retailers and brands realize the most value from large data, and to leverage that data and developing insights to enable timely decisions, optimization of business outcomes, supporting category management activities, and customer insights that drive and feed marketing strategy, loyalty programs, and marketing automation.
Dafna has 25 years of global experience in consumer, shopper and business insights, working with both retailers and suppliers in the CPG industry. She holds a Master’s degree in statistics from Northwestern University.
Q. What is the biggest challenge for c-stores striving to engage with customers at this point given the ongoing COVID fear?
A. COVID remains at the forefront, but U.S. consumers and C-store customers are continuing on the path they carved since late 2020. That means altered routines, with shoppers planning more in advance, conducting fewer trips, but spending more when they do visit the store. However, there are two key challenges for C-store operators: One is rising prices — the longer the systemic pressure continues, it is more likely customers will end up making adjustments that may have adverse effects, and therefore delivering value is increasingly important. The second is what has been established as far as convenience during the pandemic has become expected by shoppers as the ‘new convenience.’ This means that retailers who are slower to make changes may fall behind, and those who have been at the forefront may be losing their advantage as others catch up. In other words, retailers must continue to redefine convenience and be hyper focused on price-value at least in the near-term.
Q. Why is loyalty programs being looked at as a panacea for driving stronger customer engagement and where do c-stores overall, as an industry, stand in adopting and embracing loyalty programs?
A. Consumers increasingly expect retailers to offer a loyalty program. A Nielsen survey found that nearly 85% of global consumers are more likely to shop with retailers that offer loyalty programs, and over two-thirds of millennials have stated that they need a rewards program to stay loyal to a brand. The numbers speak for themselves. Retailers who view and operate a loyalty program with the mindset that loyalty is an experience and an outcome, and that the program serves as a way to get there, win. Loyalty programs in C-stores are as varied as the stores themselves. In other words, some retailers stand out, while others operate the program at a more basic level, or not at all. Having said that, even some independent operators work to offer loyalty engagement, often through category-specific programs. Overall, customers want to know and feel that the retailer knows them. That means that C-store retailers continue to have an opportunity to be moving toward a more personalized and targeted communication in today’s omnichannel world.
Q. Are c-store loyalty programs getting more innovative given consumer love for mobile devices or is it still punch cards in many places and can you share any examples of innovation?
A. C-store loyalty programs are evolving, and more and more retailers have been moving into the digital world. This is not only through mobile devices and the introduction of a loyalty application, but through active communication & engagement. This is not universal, and there is still a significant focus on promotions and offers available to all loyalty members; advancement toward personalization (1:1) has been slow. However, C-stores have made progress toward frictionless identification and ability to take advantage of rewards. Those that stand out have pushed on continuity programming designed to increase in-store engagement — for example, «buy more earn more,» and tiering memberships likened to the airline status tiers.
Q. Going forward what should c-stores be focused on with customer loyalty and what approaches do you expect to see in the next year or so?
A. C-stores must evolve their loyalty programs in order to stay competitive. A few avenues exist which are not necessarily mutually exclusive: The first is to leverage data to better understand and know their customers. This is critical to retailers in order to identify their greatest opportunities among their shopper base or prospects, and marketing strategy they should deploy (e.g., retention, acquisition, upselling, etc.). The second is to enhance technologies to move from 1-to-many (everyone gets the same message/offer), to 1-to-segment, to 1:1(personalization).
Getting to personalization may take a few years to establish and ‘perfect,’ and likely will require investment in technology/infrastructure. Those who get there will benefit from a large reward. Shoppers who feel the retailer knows them tend to return and spend more. This of course can only work with continued delivery on convenience, and/or more innovative product offerings, and attractive value and pricing to meet the shopper base needs.
