 "Walmart joins the loyalty landscape")
I think everyone in retail circles sat up and took notice in June when Walmart announced the national launch of Savings Catcher, its first foray into loyalty after a successful test run with Asda in the UK. Loyalty marketers are watching with interest to see how quickly Walmart comes up to speed, and what learnings it will put into effect.
Walmart has been the standard bearer of the EDLP model, so the news of its defection to a loyalty model is unexpected but overdue. When the world's largest retailer (and a digital leader) sits on the sidelines of customer-centric discounts and loyalty management, it was just a matter of time before they jump into the pool with a digital loyalty offer. Essentially, Walmart's value exchange is automated price matching for the price of registering purchases. The savings spin cleverly extends its price-focused brand position while also ingeniously departing from it.
Walmart may be late to the party but it will be quick to learn some unassailable truths in loyalty.
First, loyalty programmes are the most effective tools in collecting individualised customer data. Without that, retailers are limited in their ability to address segmented needs and wants based on shopping behaviours. At the most basic level, Savings Catcher will be a tracking device allowing Walmart to link POS data to real customers and ultimately build the predictive capabilities that Loblaw, Kroger, Amazon and most other world-class retailers have.
Second, Walmart will soon find out that their customers want to be rewarded. Plain and simple. You can collect transactional data, analyse behaviours, customise product assortment, optimise pricing, integrate digital experiences, and use all that to yield efficiencies and financial returns. But make no mistake, rewards engage customers and keep them surprised and delighted. Customers count on both the expected and the unexpected. That's the magic of the retail experience.
Finally, Walmart will inevitably realise that customers change their behaviour on the basis of multiple motivators. In the early days of McDonald's, Ray Kroc had it right. Customers wanted quality, service, cleanliness and value. Walmart has defined its business by similar principles, but assuming those are table stakes for the top 3-5 retailers in the category, then what?
Let's face it. The days of the single-point solution may be over. Premium retailers are now offering discounts, EDLP players are adding loyalty. Long-term loyalty programmes mix with short-term loyalty programs and customers expect remarkable experiences, even from discounters. For example, have a look at BrightShopper from IceMobile, which mixes experiential motivators with discounts to influence shopping behaviours. If Walmart is joining this party, it is a surefire indicator of the need for retailers to enable multiple motivators and diversify their loyalty strategy.
The loyalty cheering section will watch Walmart closely, and wish it every success. Is the value-conscious customer ready to be rewarded differently? Inquiring minds, myself included, want to know.
The author is Caroline Papadatos, senior VP, International, corporate marketing, R&D, LoyaltyOne. Reprinted with permission. http://www.loyalty.com/research-insights/blog/never-say-never-walmart-joins-the-loyalty-landscape
Walmart has been the standard bearer of the EDLP model, so the news of its defection to a loyalty model is unexpected but overdue. When the world's largest retailer (and a digital leader) sits on the sidelines of customer-centric discounts and loyalty management, it was just a matter of time before they jump into the pool with a digital loyalty offer. Essentially, Walmart's value exchange is automated price matching for the price of registering purchases. The savings spin cleverly extends its price-focused brand position while also ingeniously departing from it.
Walmart may be late to the party but it will be quick to learn some unassailable truths in loyalty.
First, loyalty programmes are the most effective tools in collecting individualised customer data. Without that, retailers are limited in their ability to address segmented needs and wants based on shopping behaviours. At the most basic level, Savings Catcher will be a tracking device allowing Walmart to link POS data to real customers and ultimately build the predictive capabilities that Loblaw, Kroger, Amazon and most other world-class retailers have.
Second, Walmart will soon find out that their customers want to be rewarded. Plain and simple. You can collect transactional data, analyse behaviours, customise product assortment, optimise pricing, integrate digital experiences, and use all that to yield efficiencies and financial returns. But make no mistake, rewards engage customers and keep them surprised and delighted. Customers count on both the expected and the unexpected. That's the magic of the retail experience.
Finally, Walmart will inevitably realise that customers change their behaviour on the basis of multiple motivators. In the early days of McDonald's, Ray Kroc had it right. Customers wanted quality, service, cleanliness and value. Walmart has defined its business by similar principles, but assuming those are table stakes for the top 3-5 retailers in the category, then what?
Let's face it. The days of the single-point solution may be over. Premium retailers are now offering discounts, EDLP players are adding loyalty. Long-term loyalty programmes mix with short-term loyalty programs and customers expect remarkable experiences, even from discounters. For example, have a look at BrightShopper from IceMobile, which mixes experiential motivators with discounts to influence shopping behaviours. If Walmart is joining this party, it is a surefire indicator of the need for retailers to enable multiple motivators and diversify their loyalty strategy.
The loyalty cheering section will watch Walmart closely, and wish it every success. Is the value-conscious customer ready to be rewarded differently? Inquiring minds, myself included, want to know.
The author is Caroline Papadatos, senior VP, International, corporate marketing, R&D, LoyaltyOne. Reprinted with permission. http://www.loyalty.com/research-insights/blog/never-say-never-walmart-joins-the-loyalty-landscape