Stagnant growth of loyalty programs

RetailWire panelists discussed some new data suggesting that loyalty programs’ growth is slowing at several retailers. Here’s my take on why this may be happening:

Loyalty involves establishing an emotional connection between the retailer and the customer, in order to move that shopper from a state of satisfaction to commitment. But far too often, retailers’ loyalty programs consist of little beyond price incentives. Extra discounts for cardholders may drive more frequency of visit but also encourage bottom-feeding when “loyalists” can apply one sale offer on top of another.

Among many other uses of data science, retailers can do a much better job using predictive technology to tell their best customers about new products of interest — not just when those products are available at the lowest possible margin to the store.

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