Malls used to be the centerpiece of consumption and urban life. The advent of e-commerce has diluted the relevance of brick-and-mortar retail. Malls are hyper-local entities with the majority of their consumers within the 20 KM radius. Hence, the growth in revenue for malls from a B2C aspect is impacted scarcely by new shoppers as compared to frequent shoppers around the mall.
What is a mall loyalty program?
Today majority of the retail brands in the mall would have their loyalty programs which incentivize shoppers to have a higher brand affinity — purely brand specific and would not be responsible to drive loyalty and advocacy for the mall as a whole.
Shopping mall loyalty programs are generally an inventive system where customers can earn points for shopping and using services inside the mall. The lure comes from the multi-brand nature of the program: customers can earn points for shopping at a fashion outlet and redeem those points to avail of an offer at a Spa.
A research by McKinsey & Comapny has found that the top-performing loyalty programs can boost revenue from customers who redeem points by 15 to 25 percent annually, by increasing either their purchase frequency or basket size or both.
Unspoken Territory — The Marketing Approach
Technology in retail has to date served to ensure that transactions were quick and efficient. Today, there’s an unprecedented opportunity to go a step further and leverage data-driven and digital technologies to elevate the customer experience.
“Over 78% of consumers would choose to spend money on an experience or an event” -Retail Trends Report
Malls are a B2B2C setup, where the real customers for the mall are the tenants and for tenants are the shoppers. To drive footfall and sales, malls have exploited newspaper ads, billboards affiliate marketing, and social media promotions. The consumers of these advertisements might drive footfall and sales at the mall, but the conversion tracking ends at a view or a click. This creates an entire black hole of highly-seeded yet uncaptured data.
“73% of consumers use multiple channels to shop” — Harvard Business Review
Full-funnel marketing is not just a campaign strategy; it’s a total shift in how marketing works. Full-funnel marketing has been around for years, but malls haven’t been able to overcome the organizational or technological barriers to implement it effectively. The primary requirement for holistic full-funnel marketing is to be where your customers are. Today, customers are spread across multiple channels — web, app, social media, chat, and more. Implementation of multiple non-integrated solutions that help you connect with your customers across these channels eventually creates data silos, increases your operational efforts, and fails to provide users with an omnichannel experience.
It’s extremely easy to get and acquire customers by giving that first free reward at the beginning. Doing ephemeral gratifications which make someone feel important is a smart way to initiate the spark. However, it’s the convenience and consistency which attracts loyalty over time. A study by John Gattorna reveals that 68% of your customers will leave because of the brand’s perceived indifference. Loyalty efforts to consistently deliver convenience, ease of connection and milestone-driven micro-gratifications go a long way.
The Target Group
Malls attract consumers from all age groups — from teenagers and university grads to house-makers, corporate employees, and senior citizens. Each consumer segment comes with their own preferred exploration and interaction channels and various levels of technological affinity. The task of ensuring that the right communication is targeted to the right audience across the correct channels can be extremely time consuming, draining and tedious. With so many different target groups and varied levels of revenue contribution, malls will need to curate & customise rewards which attract these different types of shoppers.
The Ally — who isn’t leveraged (as much)
Malls are a multi-brand hub, allows you to create a coalition loyalty program. Retailers play a core role in the mall’s entire coalition loyalty ecosystem. Retailers, while aligned to their primary KPI of driving higher sales, should be informed on how to drive an experience at the store by leveraging data to personalize and curate the customer’s journey in their store. Consumers’ brand affinity allows businesses to leverage the same to make the correct communication up-sells and cross-sells. Shoppers can only perceive a sense of holistic news when the retailers they interact with are aligned and integrated with your loyalty ideology and the ecosystem as a whole.
The Acquisition Conundrum
While in all business sense, getting more users/consumers is equivalent to gaining more business; for malls — the same logic doesn’t expand beyond a horizon. The most successful strategy would be to boost acquisition through retention — leveraging existing customers to acquire new ones.
92% of consumers trust the referral of a friend, family member, or acquaintance over any form of corporate advertising.
The Data (for?)
Consumers are willing to share data with brands if they feel that the outcome will be a better experience. Customers have demands and cannot necessarily be the same as what you think. Capturing, storing, and analyzing customer preferences and transactions across channels can be taxing. By the time the data-set is analyzed and recommendations for customers are in place — is it too late by then?
62% of customers expect personalized discounts or offers based on past purchases.
91% of consumers are more likely to shop with centers that recognize, remember and provide relevant offers and recommendations
Personalization is not just about showing relevant communication to your consumers, but understanding when they shop, where they shop, and accordingly curating their customer journey in your mall.
What do shoppers expect in the near future?
Paying for a purchase in one full stroke is so 2018 — shoppers want options every step of the journey. Next-generation of shoppers is already demanding pay-over-time and buy-now-pay-later schemes.
Consumers are spending from 10% to over 40% when they use buy-now-pay-later schemes — Forbes
While e-commerce and single-brand retail have caught up to the BNPL trend; Malls are still yet to leverage the potential revenue growth they can drive. Further, a cash-back mechanism can seamlessly integrate with your loyalty ecosystem, enabling you to allow your shoppers to convert their loyalty points into currency, redeemable only at your mall.
What can make you stand out amongst other Shopping Malls
Investing in CX
Experiences are no longer limited to theaters and entertainment parks and cannot be clubbed with services. They are independent identities that need to be staged, personalised with surprising elements invoking value in the minds of the customers. Stores have already begun adding this value – with cafes, museums, workshops, VR displays, etc into their physical space. This experience is not for selling, it’s staged to stimulate buying & conversions.
Gamification and Engagement
A basic Earn & Burn is limited in terms of the overall satisfaction and engagement it can drive for your shoppers. Multiple gamified avenues like Scratch Cards, Spin-the-Wheel, and other Micro-games open up the opportunities for you to capitalize on the fleeting moments and micro-dopamine rushes.
Shop & Win campaigns have always incentivized a short jump in the average basket value of the shopper. Executing Shop & Win campaigns through digital channels allows for a more convenient experience for the shopper and more accessible for the mall team to capture the data avoid manual data entry and data silos.
Illustrating the Tier Benefits
A tiered loyalty program basis customer spends at the mall creates an entire structure for you to inspire them to climb up your loyalty ladder. The goal is not to stop at converting viewers to shoppers but to create advocates. Tiered loyalty program allows you to better segment your customers and eventually personalize and engage better.
P.S. Customer Experience is the key. Technology is the enabler.
FutureRetail.Tech by Unifynd is a multi-channel customer engagement & loyalty Enterprise SaaS solution designed to drive customer success and customer experience for Malls. Our software and hardware modules suite enables malls to effectively manage their entire customer lifecycle, from acquisition to retention across online and offline touch-points, including Web, App, Stores, Kiosks, WhatsApp, and more.