Loyalty 2.0Creating a new conversation with customers
A Retail Executive Briefing Paper to stimulate debate and feedback
A Special Retail Industries Paper
2
Contents
Introduction Page 3
Moving Targets Page 4
Changing Perspectives Page 7
New Demands Page 9
Encountering Barriers Page 11
New Directions Page 13
SAP Solutions Page 14
Loyalty 2.0 Creating a new conversation with customers
“A loyalty programme is most effective when it is done in the context of a
full-blown customer strategy. It is about asking yourself how you will do things
differently, including segmenting the customer differently. In the past, retailers
were vendor-driven, with product chosen prices set and stores laid out from a
supplier-centric point of view. Now retailers must think how they turn their business
upside down and ask: what does the customer want me to present to them, and
how? It is a fundamental shift, but if you get this right you will then arrange stores
differently, promote products differently, position your business differently.
”Alison Lambert, HCL
Introduction
To the 1940s’ shopkeeper, who had a personal relationship with most of his or
her regular customers and was able to greet them on arrival and know their
favourite products, the concept of needing a bridge to enable the identification
and track the needs and likes of a customer would be utterly alien. To today’s
retail manager in any function at head office, who has no such direct face-to-face
relationship with customers themselves, loyalty schemes seem an essential. How
else would you be able to gather information on customers and market to them?
Loyalty schemes grew up, in many ways, to replace the lost art of direct
conversation with customers. Naturally, there were other drivers too. The first
concepts are sometimes described as ‘points mean prizes’ because early
schemes, such as Green Shield stamps, were fundamentally focused on
driving individual product-buying behaviours in return for a small but cumulative
reward. Although later schemes, even some iconic ones which are today held
up as exemplars of excellence, were far more sophisticated in delivery, they
essentially didn’t move far beyond this concept for many years.
Today, a new evolutionary shift is required which needs more fundamental
changes of perspective and has implications for organisational structures,
processes and, most importantly, thinking.
The drivers are both economic and competitive, as a large number of retailers
vie for a share of straitened consumer budgets for everything from grocery
essentials to apparel to leisure purchases. They are surrounded by retailers and
service providers who are busy creating new retail niches and online-centric
retail concepts which can potentially go from being amusing irritants to serious
competition quite fast thanks to the power of the online consumer. They must
even compete with the giants of search, as shopping comparisons are brought
front and centre of search results in an age when the internet is the first port of
call for a consumer considering a purchase.
This paper considers how the concept of ‘Loyalty’ itself is changing in a retail
world which has changed beyond recognition and in a period of unprecedented
competition for all types of consumer brands. It aims to stimulate thought and
discussion about how brands can embrace new ideas to engage and build
enduring relationships with customers who are becoming more powerful,
more cynical, more analytical about purchasing and more complex in their
buying behaviour.
Loyalty 2.0 Creating a new conversation with customers
3
4
Moving Targets
The customer is changing, bringing wide implications for how companies engage
with them. Loyalty activities, which are fundamentally focused on and around
the customer, are inevitably directly impacted, and it is simply not as easy to
build and keep faith with customers as it was in the past.
z The expectations of the consumer are rising inexorably and irrevocably
As the internet penetrated homes in the ’90s it generated a tingling sense of
excitement and potential for many people. Retailers responded and created
online shops that could be at customers’ fingertips 24 hours a day, generating
a feeling of closeness. A sense of immediacy started to grow and, as internet
speeds increased with broadband, so did the expectation to have faster
information and response times. Consumers’ loyalty began to be eroded by the
growing number of alternatives opening up to them; they started to realise they
had choice, which meant they could now exert influence via the choices they
made. The web rapidly became the place to pre-research every purchase,
compare and evaluate products and seek out great price deals on similar products.
z Social immersion is changing the power balance
As the social world enveloped and engaged the consumer, a sense of personal
power started to grow. Today consumers are demonstrably able to influence
brands, display instant dissatisfaction or pleasure, and broadcast that feeling,
firstly to their social groups and increasingly even further, to millions thanks to
platforms like Twitter. As a result, consumers are being driven towards purchases
by group dynamics and trending brands, not by loyalty. The shopping savvy that
the internet brought is also played out on social platforms as consumers swap
knowledge of lowest price deals and opportunities.
z Smart devices have handed consumers new capabilities
The introduction and then explosion of smart-phones and tablet devices has
meant that consumers can research, compare and shop any time and any place.
They are rapidly becoming a primary rather than secondary shopping platform.
Research by Affiliate Window found that iPad conversion rates in late 2011 were
3.82% compared to 1.9% on desktop PCs1. Research by Adobe shows that tablet
visitors to e-commerce sites spend 20% more than desktop shoppers and twice
as much as those using smart-phones2. Most consumer-facing brands have
responded in some way, but are they doing so enough? Only 10% of the top
100 online brands have tablet-optimised websites, according to a 2012 survey,
while 20% still have no mobile access3. UK consumers have clearly embraced
the multi-channel world, with retailer apps, social media and tablets joining
websites, catalogues and bricks and mortar stores4. The smart-phone has brought
a further phenomenon, as consumers are able to walk into a store and compare
products and pricing in real-time, neutralising much of the power of traditional
in-store techniques of merchandising and shelf promotion.
Loyalty 2.0 Creating a new conversation with customers
1. Affiliate Window and buyat Mobile Commerce Report 20112. Adobe: ‘The Impact of Tablet Visitors on Retail Websites’3. www.somoagency.com4. www.shoppercentric.com release: ‘Shopping in a Multi-channel World’
z New multi-channel behaviours are emerging
In a global survey in late 2011, PwC5 defined several emerging behaviour patterns
which are variants of multi-channel shopping:
• Spreading shopping across multiple channels. 86% were already habitually
using two channels to shop, while 25% were using four or five
• Interacting with a single retailer across more than one channel. 76% of UK
respondents have done this, the highest level in any market surveyed
• Making a single purchase using a range of channels. Over 80% of
respondents researched electronics, computers, books, music and movies
first, while over 60% researched online around apparel and footwear, toys
and beauty products.
z Basic loyalty programmes are not the differentiators they once were
Almost all major retailers are fielding a scheme, and the internet has democratised
the capability making it quite easy for smaller retailers and brands to establish
schemes, to the point that wallets and handbags are bursting with cards.
Estimates vary: according to Standard Life’s 2012 research 47% of the British
population use loyalty cards6 while an Ipsos MORI poll put the figure at 68%,
with supermarket scheme membership leading the way7. At the same time, the
most established loyalty models such as those in airline and grocery industries
are struggling to differentiate from each other.
z New loyalty industry dynamics are emerging
Loyalty concepts have spread to new channels, with companies like smart-phone
loyalty card Punchd, acquired in 2011 to form part of Google Wallet, and a similar
newcomer, Punchcard, which launched only in February 2012 and was already
live in 15 million US locations two months later. Group purchasing phenomena
such as Groupon have created new platforms on which people are more loyal
to deal-broking intermediaries than to the end retailer of goods or services.
z The consumer is not a passive player in this game any more
Consumers have realised they have power, both in generally and as loyalty
scheme members; and online advice portals are advising them how to work
loyalty schemes to their advantage. They are not so much ‘fatigued’ by loyalty,
but simply have too many memberships of schemes which deliver them little
they perceive to be of value. Instead, they want to be recognised, and want
brands to work harder for them. A survey of UK consumers in 2011 indicated
that 65% want more personalised and real-time loyalty actions from retailers,
including real-time offers sent to the mobile while shopping8.
Loyalty 2.0 Creating a new conversation with customers
5
“Customers increasingly want to
be in control of when they redeem
and what they do in-store too. They
want to manage things themselves,
when and how it suits them and don’t
want Loyalty things done ‘to’ them.
It’s a big shift, especially for those
companies still stuck on paper
vouchers, because customers are
rapidly losing interest. It can even
be a disincentive if you send them
vouchers if they would prefer e-
vouchers via their mobile. Customers
want more say, more things which
are specific and relevant to them and
less marketing clutter - otherwise
the loyalty scheme is a nuisance,
rather than a value-add.
”Alison Lambert, HCL
5. PwC: ‘Customers Take Control’ 2011 Report6. Standard Life: Report 20127. Retail Times: ‘Supermarkets have highest loyalty scheme take up in UK’ 2011 Report8. Steria: ‘Why are retailers failing to capitalise on new channels to market?’ 2011
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Loyalty 2.0 Creating a new conversation with customers
z The recession isn’t impeding this change
Despite the difficult time, consumer adoption of smart technology and social
media is accelerating. Figures vary: the most recent OfCom report suggests that
27% of UK adults and 47% of teenagers own a smart-phone, while a recent
comScore survey suggesting 42% average penetration in the EU9 as a whole.
Social media statistics continue to startle, with Facebook announcing in mid-
2011 that it had 30 million UK accounts covering half the population, while UK
Twitter users were estimated in early 2012 at 23.8 million10. All such figures are,
almost certainly, out of date as soon as they are published.
All of these points create an overwhelming and irresistible force upon brands.
They need to recognise the fundamental difference this force will make to how
they manage their relationships and work to grow customer lifetime values. It is
more than simply a technical challenge of how to manage multi-channel, because
the link between online and offline behaviour is undeniable and complex; it has
increased the pressure for retailers to learn how to link the offline and online
worlds to understand how to attract and keep customers.
It fits right alongside other macro-level imperatives to do more with less – acquiring
customers more cleverly at lower costs, keeping every customer possible
and boosting their relationship with the brand. Refocusing around this newly
empowered customer is going to be a key to success for every company that
wants to sell to them.
9. comScore: ‘Smartphone penetration reaches 42%’ 2011 Report10. www.semiocast.com: ‘Top 20 countries in terms of Twitter accounts’
Loyalty 2.0 Creating a new conversation with customers
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Changing Perspectives
There is both opportunity and challenge in how companies manage their Loyalty
activities in response to these waves of change, and there are both practical
and philosophical implications:
z Loyalty thinking must move to multiple channels
Loyalty management started off in many cases with single-channel thinking, as
mechanisms to drive bricks and mortar footfall. Of course today we are in a multi-
channel world and loyalty thinking and management has expanded, firstly from
store to online, and now to mobile. The integration of channels is far from
complete for most brands, however, and their loyalty schemes are lagging too.
Going forward, companies must manage their brand and build customer loyalty
not just on multiple platforms individually but in a truly complete, immersive,
way. Multi-channel increasingly becomes omni-channel, not only as customers
choose how to engage anywhere they choose, but as they are exposed to brands
through indirect, social and shared experiences as well as their individual
shopping activities.
z From the pursuit of basic customer data to understanding their lives
In an online and mobile buying world which is already enabled by supporting
payment models which depend on identification, that basic data no longer has
to be teased out of shoppers but is part of the first and every transaction. The
emphasis, and technical challenge, becomes to collect, understand and make
accessible other information which is far more valuable, and often less structured.
Those retailers which do not operate online, or do not have loyalty schemes to
generate useful and useable data, are facing an even greater challenge.
z From simple buying behaviour to complex emotional change
Older loyalty schemes were aimed at changing simple behaviours such as a
decision to step into one store rather than another. Now, it must change to
creating real relationships based on positive emotions which make the customer
want to enter a particular store or interact with a particular brand. This can only
come about through confidence and anticipation on the part of the customer that
there will be a really easy, positive and enjoyable interaction involved, i.e. that
the customer experience will be better than with an alternative choice of retailer.
z Becoming one of a few trusted favourites is now the goal
Despite changes in channel behaviour, online shoppers still identify favourites.
PwC research11 indicated that 86% of its respondents shopped across multiple
channels with five retailers or fewer, and in the UK the average number of regular
stores was 3.2. Retailers must work hard to stay in that ‘trusted favourites’ zone
and offer what customers seek across their chosen channels; this is increasingly
for things to be easy, convenient and seamless. The same research indicated that
24/7 access to shopping is the main influencer for 28% of online shoppers, who
also seek better offers, the ability to compare products and, find exclusives.
11. PwC: ‘Customers Take Control’ 2011 Report
“The currency of rewards is
changing. It’s all part of the
convergence of loyalty and
promotions, and becoming much
less about gaining a point for every
ten pounds I spend and much more
about how you will make it easier for
me to shop and buy what I want, and
the fact that, based on what you know
about me, you will offer me highly
relevant deals.
”David Oliver, PwC
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Loyalty 2.0 Creating a new conversation with customers
z Exchange real value between the customer and the brand
It cannot simply be a ‘tit-for-tat’ exchange of discount or points for purchase but
must be of more substantive, relevant and meaningful value. What constitutes
value itself may also need re-evaluation, as monetary value is not the only choice:
increasingly it is about intangibles such as the associated experience or the
customer simply feeling valued and taken care of. To complicate things further,
that feeling is highly personal to each individual. This also relates to the way in
which customers will need to be segmented and targeted to deliver the most
highly relevant promotions and propositions. Furthermore, the propositions will
have to be based on each segment’s defined perception of value.
z From short-term to long-term thinking
It is no longer about managing loyalty around products that created product and
price-led orientation in early schemes, but around the long-term expectations and
needs of customers. Old loyalty thinking often focused primarily on generating
the next interaction, but it is now the long-term future relationship, potential
frequency and value of future interactions combined with a person’s sphere of
influence that are considered. The key metrics are not just revenue today, but
total customer lifetime value.
z Loyalty schemes’ one-to-one relationship is no longer the only goal
Increasingly brands must also think one-to-many, as customers are identified
as part of social groups by their affiliations and likes – this has more than one
implication. In part, brands must consider how the feelings of the customer turn
into advocacy when positive, and damaging public exposure if negative. Brands
need to get smarter at making lateral analyses about customers based on their
social groupings and behaviours, since this offers a rich ground for cross-selling.
z Brand experience can today almost be thought of as a viral force
All the positive experiences that make up the Loyalty experience of one customer
can be transmitted to and ‘caught’ by others as they advocate their experience,
publish reviews and ratings, and even actively recruit friends and contacts to share
their great find. Marketplace sites like eBay and Amazon started the trend for
star ratings and have helped build expectation that only a 99% positive rating
is good enough. The faith in a brand can be destroyed in an instant on a social
platform like Facebook, not just for one person but for a large group.
z Creating loyalty communities, united by shared needs and likes
Building social media into loyalty has huge potential, as groups with clear shared
buying needs use social media to connect up – such as young mothers. This
links to smarter segmentation thinking as well as social CRM – for example,
segments of the population, such as senior citizens, are united by their time to
shop during the day and differentiated from working types by that, as one smart
home improvement retailer spotted when it created a ‘silver’ loyalty card which
rewarded this exact behaviour.
“Younger consumers are very
open to trading information about
themselves in return for some kind of
value. That might be more targeted
promotions. People will make the
trade-off they feel is right for them,
and the digital native generation is
much less concerned about personal
privacy. If once a barrier to disclosing,
that barrier is coming down.
”David Oliver, PwC
Loyalty 2.0 Creating a new conversation with customers
9
All these dynamics put new demands on information systems to produce faster,
better, deeper data insights to deliver all manner of data and information in
real-time so that it can be actively put to work to improve and enhance the
customer experience and generate real sales advantages for the business.
To fully support the new, customer-centric and data-driven world of retail and
commerce, IT systems must support a range of different new needs, all of which
support the customer:
z Create better customer knowledge and insight
The pursuit of the single, 360-degree customer view continues. Creating
integrated views that bring together online and offline interactions remains a
challenge, as brands seek to leverage the ability of the web to collect journeys
as well as actions and connect that data with what happens in the real world.
Tracking customers across channels that are ever-increasing in number is an
imperative and an enormous opportunity to build views of customers that have
literally never been seen before.
z Manage and make customer information more accessible
There is increasing recognition that a consistent application and data infrastructure
is required to access customer data. This isn’t just a challenge for the IT
department. It’s something that needs to be addressed by all parts of the
enterprise that depend on that vital access to information to deliver those
customer experiences at any touch-point. To meet customer expectations
brands must bring together customer information from web, mobile, store or
anywhere else and deliver it to the person who needs it, when they need it, and
wherever they need it to manage customer relationships and interactions better.
z Deliver a consistent, quality customer experience
The customer must rely on information delivered consistently regardless of the
channel they have chosen, since they may interact on numerous channels as part
of a single purchasing journey. This puts demands on point-of-sale information
solutions in store as well as information fielded via social media. Product in-stock
(and in-stock location) information must be accurate and identical across
channels, which demands central inventory information management that
many brands do not have.
z Real-time intelligence, instant offers
Real-time collection of customer data and instantaneous analysis are becoming
more and more feasible. It enables the next best action to be calculated whilst
the customer is in the middle of an interaction, allowing the retailer to make a
personalised offer they cannot resist. Traditional databases usually cannot offer
the query processing speeds required to manage such real-time demands.
New Demands
“Loyalty is changing for retailers in
several different ways. Firstly, they
are realising the enormous value of
customer data, and how the online
channel can be a research channel
as well as a transaction channel.
They are also trying to target their
promotions more effectively and
customer data gives them the
means. Where Loyalty schemes
were traditionally seen as quite
expensive – needing the retailer to
give back between 1% and 10% in
rewards – this new approach
effectively lowers the cost of entry.
If you know more about the customer
you don’t have to give points, there
is value to the customer simply in
well-timed, well-targeted promotions
tailored for them.
”David Oliver, PwC
10
Loyalty 2.0 Creating a new conversation with customers
z Online speed and offline ease
One of the areas of dissonance for customers can be that they are often treated
quite personally online, but don’t receive that same level of recognition and
therefore personal treatment in-store. The vision of truly personalised retail
where one is able to identify a customer through their smart-phone, track the
products that a customer is considering on a store shelf in real-time, and offer
individualised promotions right at that point of decision, is highly compelling –
but to deliver it requires some heavy lifting from the back-end technologies.
Translating what is possible online into the real world store environment could
transform how customers experience that channel.
z Link and enhance core systems
Many retailers run some kind of CRM system, but today most are not purposed
to track buying habits; they tend to be deployed to measure and control sales
and marketing activities. It is a cause of real frustration for a customer who, when
they call a contact centre, finds that there is no record of the problem they had
online the previous evening. The buying history of a customer would be an
incredibly powerful tool – yet there is little connectivity between CRM and POS
systems. Highly available and powerful analytical technology is required if any
system is to load the millions of transactions that happen on a busy Saturday
afternoon in-store to other systems. An awful lot of activity needs to happen
before it can be put to good use – from identifying the customer, to match offers
to the profile, to check stock is ‘Available to Promise’ before making an offer, to
deliver it to the right (perhaps mobile) platform, and do it all in less than a second.
z Support more mobile channels, devices and applications
Highly flexible mobility solutions, secure and flexible device management and
tools to create and manage multiple variants of mobile applications will all become
essential. As the mobile industry continues to innovate this challenge is unlikely
to become simpler. It will become more business-critical, however, as NFC
(Near Field Communication) becomes standard and contactless smart-phone
payments are likely to explode.
z Loyalty management
Although loyalty approaches are changing significantly, formal schemes will
remain a reality for many companies, along with the requirement to manage
how each customer goes through different channels and integrate this with
delivery of more personalised, relevant and immediate rewards. No single
application can handle all this; it requires a range of different technologies.
It is critical, therefore, to have a holistic approach to the modernisation and
enhancement of enterprise systems to support a new customer-centric reality.
“When mobile wallet comes in,
based on NFC capabilities in new
smart-phones, this will be the next
catalyst for change. Retailers will be
able to get very targeted and timely
about how they offer promotions,
and make it far more convenient for
customers to redeem them. The
vision, which is not far away now, is
that you will have both electronic
wallet and loyalty applications on the
mobile, and the retailer can issue
vouchers and promotions in a way
which can all be managed on the
device itself. Without the customer
doing anything, their phone can be
processing their payment, redeeming
their coupons, and updating their
loyalty account.
”David Oliver, PwC
Loyalty 2.0 Creating a new conversation with customers
11
It has never been so important for IT decision-making to follow the business
strategy which, in this case, demands that a common experience must be
delivered for customers. That means a need for a common architecture,
framework and platforms as well as common understanding. Unfortunately,
this is not the reality of most current organisational technology or, indeed,
structure. The most prevalent issues come from:
Silo Scenarios
Data and application silos act as a direct barrier to using information to its best
effect. While information is managed for the principal aim of making it accessible
to disparate applications across different functions there is no route to create
the integrated view, rapid analysis and speed of manoeuvre that is required.
Requiring ‘modernisation’ may seem counterintuitive to retailers who have the
very latest all-singing marketing, finance and call-centre management apps and
the hottest new social platform around – but it is needed, nonetheless. If a
company has hundreds of different platforms, all working to different IT standards
and architectural frameworks, the creation of a joined-up experience and free-
flow of customer information to where it is needed is nearly impossible.
There are purely practical issues to overcome also:
Data Deluge
Enterprises are already recognising that the data mountain is a problem that will
only grow as their dependence on data increases; their storage needs scale
as they meet compliance criteria for data retention and discovery, and so on.
New models will be needed for smarter, socially linked segmentation. Real time
intelligence must be gathered in order to create and deliver loyalty-building offers
to customers, which means establishing potentially vast new information streams
and finding new ways to load, connect, analyse and act on that information. All
of this adds up to an overwhelming data challenge that requires dedicated
thinking and enterprise-wide solutions.
Differentiating Differently
The economic turmoil of the past few years has put even greater pressure on
many brands to differentiate themselves cleverly. Globalisation of supply and
manufacturing tends to level out the cost base for many FMCG companies and
has driven down margins along with consumer prices. So players have to
compete for market share in ways other than those based on price, ways that
go beyond monetary value like great customer service and product quality.
Co-ordinated Control
As companies start to recognise that the customer experience sits behind all
loyalty-type activity, a question of ownership may arise. Loyalty schemes have
Encountering Barriers
“People are starting to understand
that having a Loyalty programme
alone won’t take them where they
want to go. We are often asked to
go in and refresh and revitalise
schemes in which companies have
failed to appreciate the sheer volume
of information they need to manage.
In many areas of retail there are high
product quantities, high customer
numbers, and high frequency
purchases to cope with – unless IT
systems can handle that, they can
get into trouble in a short space of
time, especially home-grown
systems.
”Alison Lambert, HCL
12
Loyalty 2.0 Creating a new conversation with customers
often traditionally sat in the marketing department, totally divorced from decision-
making on product and pricing, unconnected to questions of supply or logistics;
calling on the online team only to create executions of campaigns they have
conceived and instructing stores how to roll out promotions in-store. In a joined-
up, customer centric world that can’t be the case. The whole company must get
much better at using shared data to drive the insights it needs.
Lastly, there are some organisational legacy issues which may also trip up
companies as they rally around a new future vision:
Age & Attitude
As Generation Y moves to the top of the enterprise and the digital native becomes
middle management over the next few years, the ‘old world’ experience of the
most senior and, probably, older executive may become a retarding factor.
Despite the huge value that will remain vested in the experience and knowledge
of those individuals, the reality is that they may not always recognise what
changes may be needed. The start of this is already clearly evident in the
reluctance of many companies to become truly social business, as they resist
integrating social into the business and hold it at the periphery for marketing to
deal with. Of course, no generation has a 100 per cent perfect viewpoint –
younger staff in companies may well favour the hottest latest social technologies
and be unaware of the bigger practical challenges for wider IT – but this perfectly
illustrates the need to open up conversations across the company to find the
right path through.
Form Follows Function
The very structures and hierarchies that define many organisations may act
against embracing the customer fully into the heart of the business. Flatter
structures may be needed to empower a much larger number of people to play
a role in engaging the customer at every interface. More open, communicative
and collaborative companies will find it much easier to shift towards a sharing
culture, with an open two-way dialogue and interaction with customers.
“The biggest challenge that
companies have is joining it all up.
Loyalty doesn’t just sit in marketing
any more. Much of the benefit of the
new information you have access to
lies in supporting trading decisions.
To make it work you need many
teams involved: marketing, trading
or commercial, IT, finance, and for
lots of loyalty-related operations you
will also need store operations, plus
the online team. Lots of different
functions must get coordinated to
make the business case and then
drive it forward.
”David Oliver, PwC
Loyalty 2.0 Creating a new conversation with customers
13
The ‘Loyalty Scheme’ as a standalone marketing initiative now has a limited shelf
life. If they aren’t already doing so, brands must start to think of loyalty as one
part of a much larger aim of creating more intimate relationships with customers.
For companies that have a currently successful loyalty scheme, complacency
is a real risk. What works today may simply not work tomorrow. It is ironic that
the recession has given a boost to existing price-promotion and discount-led
loyalty approaches, and that may well continue to be at least partly the case in
the future, but there are also many other trends that need to be considered.
There is a complex set of challenges to overcome, including both practical and
philosophical ones. With a little smart thinking companies can start to integrate
some of the principles of ‘new’ loyalty thinking into promotional activities, others
will require investment and enhancements to shape up the technologies that will
allow retailers and brands to collect, understand and utilise information effectively.
Integrated data from across myriad channels, personalised offers delivered in
real time and highly engaging social CRM activities are important – but in addition
the whole concept of loyalty management must evolve too. It must transform
from a marketing activity to an organisational philosophy and enterprise-wide
way of working which supports the customer, and is oriented around them.
Companies that are best at engaging loyal communities of customers around
them to sustain their long-term growth and profitability will be those that create a
corporate culture that delivers a delightful customer experience, where everyone
is focused on that challenge.
Technologies as well as organisational and process changes cannot be
approached piecemeal in support of this kind of transformation. The new
challenges and opportunities can be met only by creating a clear roadmap for
change that puts the customer first.
New Directions
“Retailers are just starting to realise
that a loyalty programme cannot be
as effective as a business that is
completely re-engineered around
the customer. Loyalty used to be
peripheral; now they are recognising
that it must sit at the centre. It can
no longer be out on a limb but must
be an integral part of the business
strategy – and it will disappoint both
you and your customers if you don’t
have a proper roadmap.
”Alison Lambert, HCL
14
Loyalty 2.0 Creating a new conversation with customers
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The application's sophisticated, natural-
language processing engine also
extracts insights from postings of social
media users.
SAP Promotion Management for Retail
Achieve bottom-line savings and top-line
growth by streamlining your promotion
process with the SAP Promotion
Management for Retail application. The
integrated software helps you identify
profitable promotions based on shopper
demand and gives you the functionality you
need to deploy them in a timely manner.
SAP CRM for Sales
CRM Sales
Power your sales people to make a
positive impact on every deal – with
collaboration, insight, and agility from
CRM sales software. Serve customers
who are better informed than ever before
– with sales software designed for the
way you sell today – no matter the size
of your business.
SAP Web Channel
Experience Management
Turn the Internet into a profitable sales
and interaction channel with the SAP
Web Channel Experience Management
application. Provide customers with a
delightful online shopping experience,
while you leverage powerful and
convenient self-services to manage all
interactions from one place.
SAP In-Store Product Lookup
Mobile App
Give store managers and sales associates
fingertip access to product information
management tools – without leaving the
floor. Enable personnel to use
smartphones for up-to-the-minute reports
on spoilage or stock corrections. Or to
delight customers with immediate answers
about prices or product availability.
SAP CRM for Service
CRM Service
Support all facets of your customer service
organisation, from contract management
to marketing. Delight clients with a
positive user experience by quickly
resolving issues with real-time customer
support. Give employees the tools to
retain valuable customers.
SAP Business Communications
Management
Improve your customer service and fulfill
customer expectations with help from our
business contact center solutions for
communications management. Give your
customers the speedy, reliable, and
consistent customer service – delivered
through multiple contact channels – that
they demand.
SAP Workforce Management for Retail
Deliver customer service that meets
brand promise, maintain control on payroll
spend and develop greater visibility.
SAP Solutions
Loyalty 2.0 Creating a new conversation with customers
15
SAP Planning and Analytics
SAP BusinessObjects
Sales Analysis for Retail
Make better, faster decisions based on
real-time point-of-sale (POS) data – with
our retail sales analysis software. Rely
on powerful sales analysis tools to help
you understand the real impact of market
trends, promotions, stock levels, and more.
SAP BusinessObjects
Promotion & Merchandise Analysis
Identify which promotions are successful
and best fit for merchandise mix to
correlate with optimal markdown and
pricing parameters for all channels. Gain
visibility across various retail channels
(store, web, mobile, catalogue, etc) to
maximise promotional profitability.
SAP BusinessObjects Store
Sales and Labor Planning
A best practice-based, pre-built model for
integrated store/department level sales
and labor hours planning. Review planned
versus actual performance and schedule
maintenance and reporting in no time.
SAP BusinessObjects Supply Chain
Performance Management
Supply chain performance management
enables retailers to measure and improve
the effectiveness of supply chain
operations, lower costs and improving
return on capital.
SAP BusinessObjects
Information Steward
SAP BusinessObjects Information Steward
gives you the ability to understand and
analyse the accuracy of product and
customer data and attributes. Integrated
data profiling provides continuous and
instant visibility into data quality levels
and origins with data lineage.
SAP BusinessObjects
Event Insight for Retail
SAP BusinessObjects Event Insight
software helps retailers to continuously
discover and understand the business
impact of events as they unfold. It can
unite business events to provide keen
insight into what is happening to your
business at any moment.
SAP Planning for Retail
An enhanced planning engine and cost
method of accounting content – Define
corporate budgets and efficient
assortments per channel utilising real-
time what-if demand driven forecasts
that leverage by day, product, customer
and store performance indicators.
SAP Forecasting & Replenishment
for Retail
SAP Forecasting & Replenishment for
Retail (SAP F&R) is a key solution which
drives efficient inventories in stores and
DC of retailers. SAP F&R allows planning
and executing inventory strategies on a
global basis. With its advanced multilevel
replenishment capabilities it allows
streamlining inventories along the supply
chain and lower overall inventory levels
and cost while optimising fulfillment rates.
SAP HANA
SAP HANA is a game-changing, real-time
platform for analytics and applications.
While simplifying the IT stack, it provides
powerful features like: significant
processing speed, the ability to handle
big data, predictive capabilities and text
mining capabilities.
SAP Mobile
Sybase Unwired Platform (SUP)
Create and manage multiple apps on a
mobile enterprise platform that securely
connects your data sources to all major
device types. Sybase Unwired Platform
gives you the tools you need to drive
mobile initiatives across your entire
organisation – with a development
platform that is consistent, but highly
adaptable to changing business needs.
SAP Afaria
Better manage and secure all your
critical enterprise data, mobile
applications, and devices. Afaria takes
the complexity out of supporting your
mobile workforce – ensure all data
stored and transmitted by mobile devices
is protected.
As market leader in enterprise application software,
SAP (NYSE: SAP) helps companies of all sizes and
industries run better. SAP has sales and development
locations in more than 50 countries worldwide. SAP
applications and services enable more than 183,000
customers worldwide to operate profitably, adapt
continuously and grow sustainably.
SAP (UK) Limited
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Email: [email protected]
www.sap.com/uk
HCL AXON is a global pioneer in leveraging leading
technologies to drive value realisation. We provide the
complete range of consulting, hosting and BPO services,
necessary to define, realise and sustain real business
change. Our unique delivery model integrates on-site
business transformation consulting services with near-
shore and off-shore technical development and support
capabilities. This model ensures that our clients receive
the optimal solution at the right price point.
HCL AXON
Axon Centre
Church Road
Egham
Surrey TW20 9QB
Telephone: +44 (0)1784 28091
www.hcl-axon.com, www.hcltech.com, www.hcl.com
Data contained in this document serves informational purposes only. National product specifications may vary. These materials are subject to change without notice. These materials
are provided by SAP AG and its affiliated companies (“SAP Group”) in conjunction with HCL and PwC for informational purposes only, without representation or warranty of any kind,
and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the
express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty.
All SAP products and services mentioned herein as well as their respective logos, if used, are trademarks or registered trademarks of SAP AG in Germany and other countries.
Business Objects is an SAP company. Sybase is an SAP company. All other product and service names mentioned are the trademarks of their respective companies.
© 2012 SAP AG. All rights reserved.
Registered in England No. 2152073
Published July 2012. Republished September 2012.
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