Data is your brand's gold - leveraging your loyalty program to drive business growth and monetisation
Another key topic in retail right now, and one that I've been thinking about following the CX Network Exchange event last week, is what an invaluable asset zero and first-party data from loyalty programs is for a brand.
This data doesn't only help personalise customer experiences, but can also enable brands to drive incremental profit, through advertising and partnerships. Retail media networks, powered by this rich data, are transforming the industry, and are here to stay!
The Stats:
Retail media spend globally is poised to grow by 10% this year, after reaching $128.2bn in 2023, according to WARC Media’s latest Global Ad Trends report. In the UK, retail media’s value (excluding Amazon) totalled £283m in 2023, and is also growing, up 12% from the year before, according to IAB UK / PwC 😲
Grocers have always been at the forefront of using customer data to build huge media networks selling targeted ad space - Sainsbury's & Tesco have been leveraging their extensive loyalty data for years, with Tesco recently telling suppliers recently that it will be bigger than TV advertising by 2025. Even the travel industry is getting in on the action, with Expedia Group set to build the equivalent for that space (big up #MeSo!🙌🏻 )
Why are they doing it?
Increased ROI: According to Gartner , companies using data-driven marketing experience five to eight times the ROI on campaign spend. This high return is due to the precision targeting made possible by loyalty data.
Customer Engagement: A study by Boston Consulting Group (BCG) found that personalised ads based on loyalty data can increase ad engagement by up to 30%. Retail media networks leverage these insights to create highly relevant ads, driving better engagement and conversion rates.
Revenue Growth: European retail giants like Carrefour and METRO AG have also embraced retail media networks, using loyalty data to enhance their ad targeting capabilities. This has driven better engagement and higher ROI, contributing significantly to their revenue growth. A virtuous circle, where the brand always wins!
So, how can your brand leverage its loyalty program to unlock incremental profit through monetisation, and drive your own marketing efficiency?
Centralised Data Collection: Loyalty programs collect comprehensive data on customer preferences, purchase history, and behaviour. Centralising this data into a single platform allows for a unified view, facilitating better analysis and targeting.
Advanced Analytics and AI: Utilising advanced analytics and AI to interpret loyalty data helps predict customer trends and preferences. This enables more effective and personalised advertising campaigns that resonate with the target audience.
Strategic Partnerships: Collaborating with brands and advertisers who align with your customer's interests enhances the relevance of ads. Loyalty data ensures that ads are tailored to specific customer segments, driving higher engagement and conversion rates.
By effectively leveraging loyalty data, brands can not only enhance their loyalty programs but also create powerful retail media networks that drive significant incremental profit.
#CustomerExperience #LoyaltyPrograms #DataDrivenMarketing #RetailInsights #RetailMedia #MarTech #Technology #Monetisation