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The 5 Foremost 2019 Loyalty Predictions Retailers Can’t Ignore

While no one can see into the future, if we look back at loyalty and retail over the past year, we can make some accurate 2019 loyalty predictions of what’s to come.

In the Age of the Customer, differentiation at the product level is not enough. That’s why customer loyalty strategies have become more sophisticated and evolved to the point of significant differentiation among brands.

With that in mind, what can marketers expect in 2019 from a customer loyalty perspective?


1. Many Loyalty Programs Will Be Revamped

A high percentage of retail loyalty programs (at least 25 percent) will be completely revamped/re-launched in 2019 because they can’t afford to maintain their status quo.

Revamping loyalty programs by focusing on strengthening consumer engagement will lead many brands down a path to enhanced retention and advocacy.

Take a look at what Nordstrom did earlier this year when it revamped its loyalty program.

Known as The Nordy Club, Nordstrom’s revamped loyalty program incorporates the traditional point system and favorite benefits of its previous program, while offering customers personalized and enhanced service and experiences including exclusive access to product and events, along with more convenient ways to shop.

The new program will provide more of the rewards customers desire at a faster earn rate, and additional access to services and personalized experiences no matter how they choose to shop.

Kohl’s also revamped its loyalty program this year.

Kohl’s Rewards combines the company’s three best-in-class loyalty programs–Kohl’s Charge, Kohl’s Cash, and Yes2You Rewards–into one platform based on the power of Kohl’s Cash. Kohl’s CMO Greg Revelle believes Kohl’s Rewards will be a powerful asset for the company.

“We believe Kohl’s Rewards will become the new standard in loyalty – simple, compelling, and rooted in value customers will find only at Kohl’s,” he said. “It’s designed to give every customer an opportunity to win. Our Kohl’s Charge customers will now earn 10% Kohl’s Cash on every purchase, every time they use their Kohl’s Charge. Customers without the Kohl’s Charge will earn 5% Kohl’s Cash on every purchase, every day, regardless of how they pay. That’s on top of our sales events that offer $10 of Kohl’s Cash for every $50 spent, which means members will get more Kohl’s Cash, more often than ever before.”

Since loyalty is a competitive differentiator in the marketplace, brands should consider revamping their programs to meet and exceed consumer expectations. If they don’t, consumers have too many other options to consider.

Customer experiences are becoming more personal, and the benefits of joining a loyalty program are evolving beyond discounts to provide additional value that helps establish an emotional connection between the customer and brand.


2. Loyalty Program Benefits Will Focus More on Experiences

The customer experience has become incredibly important to loyalty marketers today. Elevating your customer experience will attract and retain more customer.

Offering differentiated customer experiences can create true and powerful loyalty among your best customers. Think of any memorable customer experience and one common element exists: Something happens that is unexpected and wonderful.

The customer experience helps drive loyalty program member satisfaction and engagement. Experiences that include simplicity, a human touch, and recognition are the ones that will have the greatest impact on consumers.

Just look at what Starbucks as done with its rewards program.

It’s user-friendly design has earned it a spot among the most used engaging among major restaurant chain loyalty programs. The mobile app makes online ordering and payment extremely easy.

Having an order waiting, ready to go is an exclusive experience that only members can attain. The programs successfully combines transactional and experiential benefits through easy to use technology.


3. Technology Will Play a Larger Role in Loyalty Programs

Technology will play a larger role in the execution of all loyalty programs, especially mobile.

For example, The Finish Line’s in-store experience drives more customer engagement and loyalty.

Officials implemented an RFID Digital Display, whereby customers can view content specific to that shoe, which drives a deeper level of storytelling, product information, and service.

Customers can also try on shoes in front of the company’s SneakerFeed Mirror, which changes the background of the mirror.

Finish Line officials tailor 1-to-1, personalized experiences based on what they browse and purchase. Through those personalization efforts, they continually create more meaningful loyalty benefits while maintaining a high level of service.

It’s those emotional experiences, often derived from experiential brand events, that go a long way toward attracting your most loyal customers. Technology can power these experiences.


4. Retailers Will Use More Personalization

It’s been discussed for many years now among marketers, but retailers will use more personalization in their loyalty products because customers are demanding it and brands are collecting more valuable data than ever.

For as much as personalization has been talked about, it remains a large opportunity: Consider that less than half of loyalty marketers use experiential benefits or personalization of offers and interactions.

But, more than 61 percent of brands plan on adding personalization capabilities to their organizations during 2019.

Amazon already does it with its predictive analytics using both historical and real-time data to gain a deep understanding of its customers.

It creates a personalized homepage for each of its customers based on factors like their past orders, wish list, and shopping cart. By anticipating what its customers are interested in ahead of time, Amazon makes it incredibly easy to find what they’re looking for and discover new products.


5. More Retailers Will Launch Premium Loyalty Programs

More retailers will use a premium tier in their respective loyalty programs. In the past year we saw that many brands are rethinking their retail strategies by using premium loyalty programs.

Some brands who launched or added to an existing premium loyalty program in 2018 include AMC Theatres, Wayfair, Cineplex, Boxed, Lululemon Athletica, Bob’s Stores, and CVS.

Meeting and exceeding consumer expectations and desires is a common theme among the premium loyalty programs that launched in 2018.

In a release, CVS Pharmacy President Kevin Hourican talked about the thinking behind his company’s new paid loyalty program titled CarePass.

“We are committed to designing and testing innovative programs that meet our customers’ health needs whenever, wherever, and however they want,” Hourican said.

Canadian athletic apparel retail Lululemon Athletica just announced that it’s been testing a premium loyalty program that charges members $128 annually.

Because the results have been so successful, officials for the athleisure brand plan to expand the test into additional markets, possibly at a higher membership price point.

Marketers realize that loyalty is a key differentiator to long-term success and they can complement a traditional free loyalty program with a premium tier.


2019 Will be An Exciting Year for Retail Loyalty

Retail is going to look very positive in 2019 for brands who focus on a loyalty program as a differentiator. Many brands are already rethinking loyalty and more will follow.

Loyalty program benefits will become more experiential-based to attract more customers and build emotional connections.

As technology continues to change, it will play a larger role in loyalty programs that can significantly impact the customer experience.

Personalization, which has been even more visible during this holiday season, will be used more by retailers throughout the rest of the year to create a greater share of mind with their customers.

Due to the success of various premium loyalty programs, and the momentum in the industry supporting them, even more retailers will implement premium tiers in 2019.

How do you plan on tackling your loyalty strategy in 2019 and beyond?


Tom Caporaso

Tom, our CEO, oversees the strategic direction of the company with over 20 years of experience in the loyalty and subscription space. When he's not leading in the office, he can be found coaching his kids in sports or watching his beloved New York Yankees or Pittsburgh Steelers.

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ebbo™ is an all-in-one loyalty company. With our data driven strategy, full-service approach, and the unwavering support of the people behind the platform, our dedicated team will work with you to understand your loyalty goals, innovate solutions and help you build customer engagement on repeat.

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