1. dmn.ca ❯ DIRECT MARKETING
August 2012 |7
RETAIL
Get a
competitive
for the retailer to communicate with that customer, whether The next step for retailers is to launch a loyalty program with
by email, SMS, a mobile app or Facebook. Loyalty programs are a plastic card or a mobile version of a card. Over the next two
a powerful way to create a connection between the retailer years, we’ll see mobility become an increasingly important
and customer, and to engage that customer in a long-term part of loyalty programs, replacing plastic cards and allowing
edge with
relationship. retailers to send promotions directly to a customer’s mobile
That relationship has a direct benefit: Retailers can possibly phone. Then, it becomes possible to replace plastic cards and
increase their invoices by 20 to 50 per cent. A loyalty program work with any mobile phone that has a web browser, not just
is never an expense like an ad campaign; retailers can expect smartphones.
the latest
to see a return on their investment within 12 to 18 months, and Traditional loyalty programs use a “batch” model where it
after that it’s pure profit. can take weeks for a customer to receive their points. Real-time
They can also work with their vendor partners on promotions integration means the customer receives points within 150
— and get those partners to pay for points — and use the milliseconds and can use those points for purchases. And it
in loyalty
loyalty program as another source of revenue for the company means retailers can analyze a customer’s shopping basket and
(due to privacy laws, those partners don’t have access to the immediately apply a promotion to a specific SKU. Retailers can
retailer’s customer database, but the retailer can sell points or also immediately respond to a competitive offering.
cash-backs to the partner). But there is a caveat: when customers provide detailed
programs
If you don’t have a customer database, start with a gift information about themselves, they expect customized
card program — or, more specifically, a gift card program on promotions and offers. If you’re a vegetarian, why would you
Facebook. There are millions of gift cards in circulation, but most want to receive deals on ribs and hamburgers? This tends to
don’t have any customer information attached to them. With have the opposite effect of what was intended and can alienate
a two-way integration with Facebook, a retailer has a potential customers.
customer base of 900 million. Having a customer database behind your loyalty program
When a customer redeems a gift card on Facebook, they means you can get that detailed information and provide
By Daleyne Guay
L
simply type in the gift card number and hit a button. But more accurate, personalized communications. This is not
oyalty programs with two-way integration, the customer also associates their direct marketing, nor is it an ad campaign — it’s a one-to-one
aren’t new — Facebook profile with the retailer. The retailer can then directly transactional platform.
they’ve been communicate with the customer, providing personalized offers, It’s also a long-term relationship. Whether you’re managing
around for the past such as: “You have $15 left on your gift card balance. If you come a single store or a large chain, retaining customers is more
couple of decades. What’s into the store next week, you can save another $5.” crucial than ever in the highly competitive retail environment.
changing is the Canadian The retailer can also use the Facebook mobile app on iPhone Loyalty programs provide that competitive edge in a simple, yet
retail landscape, along with or BlackBerry smartphones so when a customer “checks in” to effective, way — by helping you get to know your customers
technology trends such as a retail location (using check-in technology from Google+ or better.
social media and mobility. foursquare) that information is received in real time and the
A loyalty program is not an ad campaign; where an ad retailer can push out a promotion, such as: “Make a purchase in Daleyne Guay is President of FANBOX
campaign seeks to attract new customers, a loyalty program is the next 30 minutes and we’ll double your points.”
designed to retain customers. Depending on which book you
read, attracting a new customer is anywhere from three to five
times more expensive than retaining an existing one.
Retention is becoming even more important for Canadian
companies as large U.S. retailers, such as Target, set up shop
north of the border, significantly increasing the competitive
environment. According to a recent report by Colliers
International, U.S. retailers are setting their sights on the
Canadian market over the next five years, so competition will
continue to heat up.
This competitive environment extends to loyalty programs.
In Canada, most loyalty programs are made up of a coalition
of retailers. And while coalition partners offer promotions and
deals through those programs, they don’t have direct access to
the customer databases — so they don’t know their customers.
In the U.S., it’s a different story. Many retailers have their
own established loyalty programs, with their own customer
databases. Canadian retailers need the tools to go up against
these new competitors, and that means getting to know their
customers better.
For retailers that are already part of a coalition program,
it may mean starting their own loyalty program rather than With the help
relying on a third party. And for those that don’t have any type of a technology
of program in place, it means taking a serious look at their
options.
platform,
But it can be a daunting task to build a customer database retailers can
and design a loyalty program. Fortunately, there are easier ways
create a deeper
to do this. With the help of a technology platform, retailers can
create a deeper connection with their customers through gift connection with
card and loyalty programs. Some of these tools use social media their customers
and mobile platforms to offer personalized promotions in real
time according to customers’ demographic profiles, shopping
through gift
algorithms and consumer preferences. card and loyalty
Each time a customer does a transaction it’s an opportunity programs.

2. DIRECT MARKETING 2012
Target in sight
By Robin Copland
Analytics and the future
of Canadian retail
FAST
forward
I HOLIDAY »4
n 1994 Canada’s retail landscape
was forever changed by the arrival
of Walmart. As a retail superpower, MARKETING
Walmart ushered in a new age of com- Looking at gift giving
petition for all kinds of Canadian retailers,
affecting everyone from Canadian Tire to
a little differently
Loblaws to Sears. Overnight, everyone sell-
ing anything in Canada had to get smarter RETAIL »6
faster to keep up with Walmart’s globally
renowned retail savvy.
Location, location, location
PBS on choosing the right location for
Next year, a similar sea change in
your customers
Canada’s retail sector will begin with the
arrival of Target. The company will enter
Canada with 24 locations to start. Since
Case Study: »6
Target announced the move to Canada Pizza Pizza
back in 2011, retailers have been thinking
about one thing: staying competitive Building better »7
through the next retail era. For companies connections
that hope to stay ahead of the pack, part of How retailers use loyalty pro-
the process means leveraging advanced grams for a competitive edge
analytics technology to become more
customer-focused, efficient and granular
in their approach to marketing and
The customer- »8
merchandising.
intelligent retailer
In the past 30 years many retailers have
spent a lot of time and effort investing
Sector Report:
NFC and Location
» 10
in supply-chain efficiency. With the rise
of e-commerce over the past decade, Intelligence
combined with increasing competition
and price pressure, retailers are re-focusing
their efforts on understanding customer
Regional Report:
Mississauga
» 12
behavior in order to survive and compete.
Getting customers through the doors—or DMTI Spatial on using » 16
at the very least on their website—is job location-based infor-
one for marketers today. This starts with
a keen understanding of their customers,
mation to maximize
the kind that can only be achieved through DM campaigns
comprehensive analytics technology.
From merchandising to marketing to
store operations, analytics technologies
allow companies to leverage all of the data
at their disposal, whether it’s about their
customers, competitors, staff or products.
The most important use of this technology,
for competitive retailers, is ensuring the
customer remains the number one focus.
Retailers can no longer simply focus on
product. With today’s advanced analytics
capabilities retailers can finally achieve the
Continued on page 9 Robin Copland is the Director of Business Development in the SAS Americas Retail Practice. Photo courtesy of Associated Press
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