Mobile Engagement Builds Customer Loyalty for Retail Profit
Customer loyalty is the foundation of profit generating retail businesses. From the very origin of retailing, providers have relied on myriad engagement initiatives to garner customer loyalty. The promise of exclusivity, product or service value, constant accessibility, etc. delivered via word of mouth, pamphlets, and later, electronic or digital media has always worked. Markets and customers have changed over time but the one thing that hasn’t is the immeasurable value of customer engagement.
Customer loyalty is an important revenue generator for retailers. According to The Economic Times, loyalty program members in India were estimated to be 20 million in 2010. Lifestyle draws 50% of its annual revenue from 2 million members of its ‘The Inner Circle’ programme while Shoppers Stop derives 73% of its business from more than 1.9 million of its ‘First Citizen’ members.
In the internet and digital media era, retailers have the opportunity to engage customers via their “always on” mobile handsets. In 2010, the contribution of smartphones to the overall mobile handset shipments in India was only 2.5%. This share increased to 7% in 2011 and is expected to grow to 29% by 2017, according to consulting firm Frost & Sullivan.
For retailers, the mobile platform is a cost-effective yet secure means of engaging the customer, delivering m-vouchers, and even authenticating a purchase. With smartphones proliferating across masses, retailers expand their customer outreach manifold. The convenience of mobile connectivity also boosts loyalty program memberships. At the same time, retailers reduce operational costs by cutting down paper and printing expenses, manual record keeping and management. Peter England, Dabur’s newU, Odyssey Bookstores and Puma India have successfully launched mobile loyalty programs in the country.
