The challenges and uncertainty of the past 18 months have created a difficult operating environment for Australian retailers. Innovative solutions are now required to address unprecedented problems. Customer loyalty will remain a key battleground, and retailers that can maximise that loyalty are likely to emerge victorious.
The Australian retail sector has faced significant changes due to COVID-19, with consumer behaviour altering dramatically in response to the pandemic. eCommerce is booming, and retailers have been offering innovative products and services at an unprecedented pace.
Support from the Australian government has helped keep many retailers in business despite predictions of insolvencies due to lockdowns and restrictions. However, as this support dries up, the performance of the retail sector could be unpredictable.
The next 12 months is likely to be a time of ongoing uncertainty for retailers. Research shows that, due to the impacts of COVID-19, a lack of consumer confidence is one of the biggest challenges facing the retail industry. Nearly one-third of retailers said that consumer expectations around customer service were likely to increase the most over the next 12 months. Meanwhile, retailers that have shown a strong focus on customer safety during this time have gained more consumer trust.
Customer loyalty is more important than ever; however, it's also harder than ever to attain. Customers have a world of choice at their fingertips and will vote with the push of a button instantly if they don't receive the experience they expect from a retailer. This includes loyalty programs, which can often require customers to jump through hoops to secure their rewards.
Streamlining loyalty programmes, removing the burden of participation from consumers' shoulders, and engaging with a large and varied ecosystem of merchants have the power to change the face of the Australian retail sector.
The solution lies in open ecosystem, card-linked loyalty programs that are bank- and card-agnostic. These programs provide a more seamless process for shoppers, which lends itself to increased brand loyalty. When shoppers don't have to scan an extra card or enter a code, they're more likely to participate in loyalty programs and shop consistently.
Loyalty program operators that use an open ecosystem of card-linked loyalty programs can more easily connect with hundreds of merchants in a heartbeat. When customers can choose from a wider range of rewards options — such as cashback, charitable donations, and even direct contributions to their superannuation — they're more likely to enthusiastically engage with the program.
Meanwhile, merchants gain easy access to brand awareness and flexibility, as well as valuable customer data that can help them deliver an even greater customer experience.
As the eCommerce space transitions away from internet cookie-based advertising, confusion around last-click attribution and affiliate preference will dissolve in favour of card-linked platforms. This bypasses the need for cookies because the platform accurately and automatically captures transactions.
The future of loyalty programs is plug-and-play solutions that semi-automate the attribution process. Card-linked programs with an open ecosystem that captures both online and in-store transactions make it easier for merchants to participate in a future-proofed loyalty solution.
With data sovereignty and direct connections with merchants in an open ecosystem, program operators can easily access that ecosystem for a faster return on investment. This more open approach to loyalty programs will change the face of Australian retailing for the better, making it easier for merchants and loyalty program operators to deliver outstanding customer experiences.
