Customer loyalty and consumer data
November 05, 2014

More often than not, retailers seek to implement a customer loyalty system to build up customer retention. After all, a loyal customer is more likely to generate sales than new or incremental traffic. They are also more like to direct other people to the store to generate even further sales based on their favorable reviews of the store. However, with integrated payments solutions, loyalty becomes more than a way to generate frequent patrons. It is also a way to collect data on customer behavior, so as to improve the shopping experience overall.

The way loyalty programs used to work is that a card or item would be used to identify a shopper based on the frequency of their visit. If a rewards program was attached, the consumer could redeem points or other currency to get rewarded with something within the store. The idea was that by creating an incentive to shop more at the store, customers would come back for more. This is not always true and has become less prevalent as tastes have changed. This is in part due to technology, since many customers have shifted to using smartphones that allow for loyalty programs to be installed as mobile apps.

Making the customer feel better
However, retailers should be able to take advantage of loyalty programs being on mobile apps because they present opportunities to collect customer data. Integrated payments systems can help with collection. What it does is work with loyalty apps to receive information on each transaction a customer makes. A store manager can then look at the data over time to see what customers tend to purchase. From there, patterns can be detected regarding specific goods, especially what items get paired together.

This information can be important to merchants and not just for inventory reasons. Having access to how a customer shops through this data can be extremely significant. A store could easily shape the shopping experience based on the behavior and buying habits of its consumers. With that in mind, a loyalty program pays off by giving retailers that form of insight to create a better shopping experience overall. Rather than developing a store based on the sales of certain goods, a merchant can focus instead on improving customer service. By creating an experience that is ideal for the customer, that makes them more loyal.

Nexus: G-WEBCD2