S1E11 – The Retail Avengers & The Legions of Loyalty

Welcome to Season 1, Episode 11 of The Retail Razor Show!

As a retailer transforming your business post-pandemic, where do you stand on customer loyalty and loyalty programs?

The Retail Avengers team is back for a topic so big, and so challenging, we brought in TWO special guests to tackle the future of loyalty in retail: Erin Raese, co-founder of Loyalty 360, a cutting-edge association for research, best practices, and networking opportunities for loyalty practitioners, and now the global SVP of revenue for Annex Cloud; and Alicia Esposito, VP of Content for Retail Touchpoints and a fellow RETHINK Retail top retail influencer!

Together the team covers a wide range of loyalty topics, while hosts Ricardo & Casey wrap up with a few key thoughts on the latest technology trends driving the future of customer loyalty. Don’t be surprised if they dig into web3, NFTs, and crypto before the end of this pod!

Have you heard the news! We’re up to #20 on the Feedspot Top 60 Retail podcasts list, so please keep those 5-star reviews in Apple Podcasts coming! With your loyal help, we’ll be moving our way up the Top 20 in no time! https://blog.feedspot.com/retail_podcasts/

Meet your hosts, helping you cut through the clutter in retail and retail tech

I’m Ricardo Belmar, a RETHINK Retail Top Retail Influencer for 2022 & 2021, RIS News Top Movers and Shakers in Retail for 2021, a Top 12 ecommerce influencer, advisory council member at George Mason University’s Center for Retail Transformation, and lead partner marketing advisor for retail & consumer goods at Microsoft.

And I’m Casey Golden, CEO of Luxlock. Obsessed with the customer relationship between the brand and the consumer. I've spent my career on the fashion and supply chain technology side of the business. Now I slay franken-stacks!

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Host → Ricardo Belmar,

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TRANSCRIPT

S1E11 The Retail Avengers & The Legions of Loyalty 

[00:00:20] Show Intro

[00:00:20] Ricardo Belmar: Hello. Good morning. Good afternoon. And good evening, whatever time of day you're listening. Welcome. Welcome to season one episode 11 of the Retail Razor Show. I'm your host Ricardo Belmar a two years in a row, RETHINK Retail top retail influencer and lead partner marketing advisor for retail and consumer goods at Microsoft.

[00:00:38] Casey Golden: And I'm your co-host Casey Golden CEO of Lux lock. I've been obsessed with the relationship between the brand and the consumer. The experience is everything. I spent my career on the fashion and supply chain side of the business. Now I'm slaying Franken stacks to power the future of commerce.

[00:00:53] Ricardo Belmar: So Casey, we are back to another Clubhouse session. This time, the topic was loyalty. Understanding and building customer loyalty, both with, and without loyalty programs. And keeping with our recent themes on innovation and leadership, our Retail Avengers crew brought in not one but two leading experts on the subject of loyalty to really dive into how loyalty needs to transform in the industry.

[00:01:16] Casey Golden: This was another really killer clubhouse discussion. I'm a retention girl. So really building that loyalty and you're right. It, it was so big. We had to bring in two guests. First, we had co-founder of loyalty 360, a cutting-edge association for research, best practices, and networking opportunities for loyalty practitioners, and now the global SVP of revenue for annex cloud, Erin Raese. And second, we had Alicia Esposito, VP of content for Retail Touchpoints and a RETHINK Retail top retail influencer as well. This one really dials it up for a few notches. As we cover a lot of ground in the loyalty space. 

[00:01:57] Ricardo Belmar: Yeah, 100% and loyalty is a tricky topic going from, you know, how to make your best customers become loyal customers that are also advocates of your brand, not just loyal shoppers to having free versus paid loyalty programs to grow your brand. To consumer relationships and coming outta the pandemic, this field is really changing. Lifetime customer value is something every brand and retailer has to look at now as part of their growth plans. And you have to build more loyal customers. If you wanna see that metric go up.

[00:02:24] Casey Golden: Yeah, spoiler alert. You'd be surprised how dramatically loyalty has changed for consumers since the start of this pandemic, and how that has impacted how retailers and brands use the customer data that they have. seen a rise in the paid memberships, like you mentioned for loyalty program pricing, personal services as a tier that's being productized that we used to kind of just keep secret.

[00:02:46] I think it's 80, 86% of adults belong to at least one loyalty program, but managing multiple is increasingly difficult. It has to be more about price. With honey providing that instant cash back or coupon codes. So grab your notebooks. This is gonna be a great discussion to really start getting the, the wheels turning on how to drive this and create the value because emotion is still a very important factor to driving loyalty.

[00:03:16] And that doesn't even consider how new technology is going to change loyalty, even more going forward 

[00:03:21] Ricardo Belmar: Yeah, that is so true. So I remember, like 75% of US consumers reported new shopping behaviors since the pandemic started and 50% of consumers globally saying they switched brands during the pandemic. This is definitely one of our more meaty topics for discussion. So let's not keep our listeners waiting. We'll be back here to layer on a few game changing ideas for loyalty that we didn't have time for in the clubhouse session. But first let's give a listen to the Retail Avengers and the legions of loyalty. 

[00:03:52] Clubhouse Session

[00:03:52] Ricardo Belmar: And welcome everyone to the Retail Razor room. We're back today with a couple of special guests that we'll introduce in a few moments. Our topic today is the future of loyalty. And let's get started with some introductions.

[00:04:04] I'll kick that off I'm Ricardo Belmar. I started the retail razor club here on clubhouse. I've been in retail tech for the better part of the last two decades working for managed service providers, technology providers most recently joined Microsoft as a senior partner marketing advisor for retail, and I've also done some advisory work for other retail tech startups in the past.

[00:04:25] So I've got a lot of fun experiences helping retailers implement technology and digital transformation. I'm gonna move through the list here starting with one of our special guests this week. Erin Raese, why don't you introduce yourself?

[00:04:38] Erin Raese: Hi everybody. This is Erin Reese. Thank you so much for having me for a couple of decades now on the vendor side selling different technologies and services. And then back in 2008, I co-founded an organization called loyalty 360, and the whole idea was to bring people together around the concept of loyalty, not necessarily programmatic loyalty, but the, the concept of, Hey, we all need long loyal, profitable customers in order to succeed.

[00:05:04] So I'm excited to be here , and learn from you all. 

[00:05:07] Ricardo Belmar: Great. Thanks, Erin. We're really pleased to have you here this week. Jeff. 

[00:05:11] Jeff Roster: Jeff Roster, former Gartner and IHL retail sector analyst now co-host of this week in innovation. 

[00:05:16] Ricardo Belmar: Great. Thanks Jeff. Shish

[00:05:17] Shish Shridhar: good afternoon. Shish I'm part of Microsoft for startups.

[00:05:21] I'm the retail lead and I'm creating a portfolio retail tech startups been in Microsoft for 24 years working primarily retail, consumer goods with a focus on AI and IOT. Thank you. 

[00:05:33] Ricardo Belmar: Great. Thanks Shish, Brandon. 

[00:05:35] Brandon Rael: Thanks Ricardo. Great to be back after the hiatus Brandon Rael I've been in and around the retail consumer sector, it's my entire career.

[00:05:41] Having worked for some fortune 100 retailers directly in their merchandising and planning and fashion teams. And now I've migrated over to the business transformation and digital transformation side, to help drive outstanding customer experiences and, and revenue growth.

[00:05:54] Thanks again. 

[00:05:55] Ricardo Belmar: . Thanks Brandon .Casey? 

[00:05:57] Casey Golden: Hi, I'm Casey golden. I'm the founder of LuxLock a retail experience platform. We mobilize a digital workforce and allow everybody to shop live with a stylist online. All about the luxury experiences on my end. Bridged all the enterprise software and had about every single job in a fashion house.

[00:06:16] So happy to be here as always. Thank you so much. 

[00:06:20] Ricardo Belmar: Thanks Casey, Trevor! 

[00:06:21] Trevor Sumner: Hey everybody. I'm Trevor Sumner. I'm the CEO of perch. Perch is interactive digital engagement platform in store. So you can think of it as digital signage, although digital signage is terrible.

[00:06:32] What's great about what we do is we use computer vision to automatically detect that click stream about what actually happens in the shelf and the types of content and promotions that actually change cut shopper behavior at the shelf, including loyalty.

[00:06:45] So excited to talk about this topic today. 

[00:06:47] Ricardo Belmar: Great. Thanks Trevor. And last but not least, another special guest, Alicia.

[00:06:51] Alicia Esposito: Hello everyone. I'm Alicia Esposito. I'm the director of content and new media for Retail TouchPoints. We're a online media network and producer of retail events. Customer loyalty has been a very big topic of coverage for us over the past few weeks, we actually did some new research around it.

[00:07:11] So I'm excited to dig into some of the trends, hear what other folks are hearing, and of course get some some new trends and best practices. Thanks for having me. 

[00:07:21] Ricardo Belmar: Great. Thanks everyone. Thanks to all our speakers. Our topic this week, again, we're gonna talk about the future of loyalty and retail and loyalty programs.

[00:07:30] The Loyalty Dynamic from the Pandemic

[00:07:30] Ricardo Belmar: A good place for us to start is with some interesting stats around loyalty and where things are today. In fact, during the height of the pandemic, we see numbers along the lines of 50% or more consumers saying that they switched brands or considered switching brands throughout the pandemic most likely given to stock out considerations when they couldn't find their favorite brand.

[00:07:51] But in my mind, it's fair to say that one of the major issues going forward is that brand loyalty that consumers have shown in the past, may be up for grabs again, in the sense that there's been more of a willingness now to try new brands and recognize that you don't always have to have that, that brand loyalty.

[00:08:07] And of course this may vary by age demographics and other factors, but I think that's something to consider. Other points that I have found noteworthy is stats like 75% of consumers saying they have new shopping behaviors. You know, a lot of that also is going to impact their expression of brand loyalty.

[00:08:23] And then I know of recent studies have shown retailers reporting that when they have fee-based loyalty programs, whether we're talking to extreme versions like an Amazon prime or Walmart plus or CVS' Carepass, those loyalty members are worth as much as four X or more in terms of lifetime customer value to the retailer as compared to non-members. So definitely some incentives there for that.

[00:08:45] I'd like to kick things off and Alicia, I'm gonna go to you first, because I know you've got some interesting studies that you guys have recently published what retailers are saying about their loyalty program. So I thought you might have some interesting facts to share with us. 

[00:08:57] Alicia Esposito: Yeah, a absolutely.

[00:08:59] And we actually just published a benchmark survey, essentially covering some new realities around customer acquisition. Some of the issues or challenges that retailers faced in terms of customer retention. So kind of looking for those new opportunities, but most importantly, the gaps that retailers have seen over the past year.

[00:09:21] And there's a really interesting juxtaposition that we saw. So from an acquisition standpoint, obviously digital was huge for them. 58% said they gained new e-commerce customers over the past 18 months. So they invested more in those digital engagement and digital acquisition tools, which I think kind of is in line with what the broader industry has been saying.

[00:09:44] But what I thought was interesting for loyalty programs specifically, Is that we actually saw a bit of a year over year shift when we were looking at total revenue generated by loyalty program members, which, there's always that benchmark data point around how more loyal customers buy more frequently.

[00:10:04] They have higher basket sizes, et cetera. So in twenty twenty, twenty two percent of retailers said 50% or more of revenue came from loyalty program members in 2021 that dropped to 8%. So I think it kind of speaks to your point, Ricardo, around that brand switching that took place over the course of the pandemic and our findings also point to out of stocks and overall supply chain and delivery issues, being that big pain point from a retention perspective.

[00:10:35] So even though they get that acquisition, there's kind of a bit of a gap, right. And being able to fulfill that brand promise. Looking a bit more closely into those loyalty programs specifically. We saw general loyalty programs, pretty much status quo in terms of the benefits, you know purchase discounts and points were the top two tactics, but some really interesting movement in the way of premium loyalty programs.

[00:11:00] So I'm not sure if we're gonna be getting into that a little bit later, but we saw things like free gifts with purchase being widely implemented, but sadly not as much movement in the more high value, in my opinion, offering such as services you know, guided selling that those richer engagements that I think really have a true impact.

[00:11:19] So I know I just kind of jammed a lot out there, but really, really interesting times, like you said, those shifts that took place over the past 18 months in the way of brand loyalty and changing brands. But definitely a lot of opportunity I think moving forward. 

[00:11:33] Ricardo Belmar: Thanks. Alicia has a lot of good data points to unpack there.

[00:11:38] I wanna ask Erin what your thoughts are on that and how that may, or may not may be in sync with other factors that you may be seeing.

[00:11:45] Erin Raese: Thank you. Yeah, we are. We're seeing some of the same things. I mean, certainly the, the supply chain has affected so many people and left a lot of brands reeling a bit and where we're coaching our clients. It was through the whole thing, make sure you're, utilizing your loyalty initiatives and staying connected to those customers because if they did have to leave for whatever reason you have that as a tool to bring them back.

[00:12:11] And on the premium side, we, see premium. But we typically will guide toward Really, why do you want to do it? And perhaps using it more surgically than as a blanket, because it may make sense for a particular segment of your audience, but not all. And then I guess the third with retail in particular, especially when we're looking forward the discounts obviously have, have been out there for a long time, and are associated more with loyalty programs and such, and talking more and more to people and they seem to really be grasping this.

[00:12:46] I think also because of the third party data going away how do I get more of that data and how do I use that data to build my relationships and, and try trying to get away from the discounts. I think everybody's realizing that so much discounting has obviously hurt the bottom line and there's fatigue.

[00:13:04] And so can I turn this around and build more stronger emotional bonds with my customers? And by doing that, can I begin to raise the price a little bit and can I provide a value that's different. 

[00:13:18] Loyalty Tactics & Benefits

[00:13:18] Ricardo Belmar: So with that, let's talk a little more about tactics in loyalty programs, in terms of, there's always a lot of discussion of what consumers say they want in loyalty versus what retailers either think consumers want, or what the benefits the retailer wants to see from the loyalty program.

[00:13:34] So I'll open this up to everybody on the panel. I have some thoughts here, but I'll, I'll let everybody else jump in here. I mean, what do you think are tactics? You, you don't see enough of today, but feel we should see more of them tomorrow just based on the history of loyalty programs and what you feel works or doesn't work.

[00:13:50] Trevor Sumner: So one thing that's interesting in balancing these competing desires and goals, you mentioned CVS and care pass. You know, one of the things I, I do think that value is, is the key thing to a loyalty program. And, you know, especially in a broad range of segments, not at a, you know, a Gucci or Chanel or Macy's necessarily, but definitely at the, at the grocery stores or CVS, and one of the big ways that you can continue to do that is by promoting private label.

[00:14:17] So CVS care pass, which you mentioned it gives you a 20% discount, 20% discount on private label products. Right? And I think loyalty increasingly will be adapted to promote private label products, because that is a tactic being used by all retailers to capture more margin. Which also gives them the ability to offer better discounts.

[00:14:38] And one of the things that we're seeing in, in a push to private label is I was talking to a supplement provider who has a very large retail partnership. And one of the things they talk about is yes, that first sale happens at the retailer, but the refill happens usually off the side of the retailer, right?

[00:14:55] So if you own the private label, you can own the full life cycle value of the client, which is why private label and loyalty becomes so entwined in private label that I think you're gonna see a lot more of that tied together. 

[00:15:08] Brandon Rael: Great points, Trevor don't mind jumping in here. I think we've seen that movement to that direct to consumer model, especially with Nike, who are taking ownership of the brand ownership, of the experience, ownership of that personalization imperative to, to drive what the experiences as the customers are looking for to gather only the insights and to really offer things that the customers want based on their preferences and the behaviors.

[00:15:31] So that private label proposition is a big one. And I also think the direct consumer model is is an open, open landscape for brands to engage and to provide great experiences to customers. 

[00:15:43] Ricardo Belmar: That's an interesting point. As far as how private label can be intertwined with loyalty, given that we know a consumers really expect to be rewarded for a loyalty program.

[00:15:52] So what better way from the retailer's point of view, and to offer that reward on a private label where presumably if they've done the private label correctly, there's more margin, there's more room to offer a discount. I always find it interesting in a lot of studies that get published about this, that the expectation is consumers want number one discounts, better pricing from being on loyalty. And there's either a hesitation from a lot of retailers to offer that. And of course, to Trevor, Brendan, to your points, private label is a good mechanism in which to offer that. But let's go a little deeper in this one, too. I'm curious what everyone thinks about loyalty tactics, other than discounts and price and where you think that's going.

[00:16:29] So for example, gap announced their loyalty program that's cross brand. So it's one unified program across gap stores, banana Republic, Athleta and Old Navy. And one of the interesting options on there are using your points to generate charitable donations to charities that gap works with, and that I believe gaps comment when they announce this is that they heard their customers voices on how they care about what the retailer's contribution to the world is and that's one way that they're giving back. So what do you think about tactics like that as an enticement in a loyalty program.

[00:17:03] Shish Shridhar: So one of the things you mentioned just now about social impact and brands really driving that is I think one of those areas that I'm seeing a lot of in the startup world, for example, and working with a company called Sparrow, that's doing exactly that they're providing this API so that brands and retailers can really embed that capability into transactions and enable shoppers to be able to select charities of their choice and, and really have that social impact element really stand out with the brand.

[00:17:34] The other one that I think is key and we are probably not seeing enough of is personalization. And I would say hyperpersonalization this is along the lines of, what maybe Netflix is doing or Spotify is doing where the personalization, the relevance of the content for the customer is really what draws or, or defines that loyalty.

[00:17:57] I think that is an element that a lot of retailers and brands should be doing more of. And this is really to do with the data ,data across all of the channels and pulling it all together and, and driving more than just segmentation, but going very hyper personal in, in providing offers and experiences that are personal and relevant to the customer.

[00:18:20] And that really reduces the churn. And I think that's, that's an element that has a lot of potential the advances in, in data and AI is making this even more real and more impactful than it has before. And then of course the other element being, the gamification aspect where there that continuous engagement with that data enables brain to be continuously keeping that connection alive.

[00:18:47] Brandon Rael: Add to those points. It's the relationship and the brand and the consumer is, is the paramount here. We all know that shipping or free shipping is losing some game and some aspects discounts or just loyalty points that result in lower price of discounts could be losing somebody as well.

[00:19:02] So it's that gamification, that experiences exclusivity factor that if you're a member, if you're a member, you actually reap the benefits of being member. So membership has its privileges with the old ad from American express. I think that's very applicable in today's day and age, where brands want engage and retain their, their top customers.

[00:19:18] Casey Golden: hundred percent, really believe in providing time well spent and just really creating, giving people what they want, you know, do you want 20% off or do you want a soul cycle session? And I think that there's gonna be a lot more experiential marketing opportunities opening up. Luxury brands have been doing it for hundreds of years.

[00:19:37] I think it's about time that it comes down the funnel so that everybody starts being able to get spoiled by these brands rather than spend the money on Facebook. Just start spending the money on your customers. Candle's not that expensive for your birthday, especially if you buy 2 million of them.

[00:19:53] Trevor Sumner: So , Ricardo, you started off with talking about giving away to charity. I'm investing in this interesting company called Griffin. And what they do is as you spend money on Starbucks or a retailer a certain portion of those funds end up getting invested in stock in that company.

[00:20:12] So I think there's some interesting dynamics here. I mean, it's really early stage and I just think it's fascinating, right? Re as opposed to offering, you know, some type of discount that hurts your bottom line, you think about this as an executive, right? Like instead you build a loyal following that holds your stock, which increases your stock price, which is great for, you know executive compensation, right?

[00:20:34] So that's one piece of it. But the second piece of it is, this goes to a little bit towards the money side of the house and thinking of it as an appreciating asset, which also that asset is tied directly into the brand and brand building. And one of the things that they've been able to do, whereas Robin hood, and a lot of these stock trading companies they've been able to appeal to a young male audience they've been able to unlock a younger female audience.

[00:21:01] And I think that's really kind of exciting thinking through, on a demographic basis, you know, what are different needs from a loyalty perspective and what can be motivations to drive different behaviors that are both good for the corporation but also great for the shopper and your customers.

[00:21:17] Ricardo Belmar: Yeah. That's a great point. And I find that example you have of the basically turning the loyalty into an investment opportunity is a really interesting one. What we're all really saying is. Loyalty has to move to, we can use a word like experiential, but I'm gonna stay away from that for the moment and say, instead, it, it just has to be about something other than discounts.

[00:21:36] We, we know that consumers love discounts that ultimately price does matter in the end, but it's not the only thing. Right. You can get benefit and deliver value to the customer in a loyalty program without having to exclusively rely on discounts. The social aspect that the gap is doing the investment model that Trevor, you just mentioned, those are great examples.

[00:21:55] Transactional to Emotional Loyalty 

[00:21:55] Ricardo Belmar: I'm gonna bring up another example. One that I think is really useful is what about loyalty programs that are in some way related. Let's say that because I'm retailer a knows they have customers with an affinity to retailer B. What if they both had some sort of connection between their loyalty programs?

[00:22:12] What could you do there that could add more value that customers would then therefore want to be part of both loyalty programs?

[00:22:20] Casey Golden: A hundred percent. There's such a huge overlap across brands in the entire lifestyle. Being able to collab, cross collaborate, and partner to be able to serve the customer. There's such an opportunity to be able to give customers something that actually delights them whether or not that's a coffee or a bottle of bubbles or.

[00:22:44] Even a new product from a different brand that this brand thought that you might like, and it's non-competitive I think being able to spend more money together keeps everybody's bottom line a lot more green. 

[00:22:56] Alicia Esposito: I love that point, Casey. And I think it helps tell a much richer story too, from a marketing and engagement perspective too. Because we're zooming out. We're not thinking about, just about this very specific experience the customer is having in my store or on my e-commerce site. It is the bigger picture of what they experience every day of their lives. Right. And that encompasses so many different things, so many different brands.

[00:23:23] There are so many opportunities. I think about the day in the life of, you know, you're a target customer, where does she go? Or he go. What are the different interfaces that they engage with, whether they're at the gym or on their commute, or, in a mall.

[00:23:37] Or, or sitting at home. There are more opportunities in the media perspective too. So I think it just opens up so many more opportunities for co-creation and for innovation through collaboration. 

[00:23:48] Casey Golden: Yeah. I mean, right now we have two customers, one is evening wear and another one is hair jewelry.

[00:23:56] So it's like ets for, for grownups. Right. Love it. And we also have a, the hair salon and Saks. So all three clients essentially if you spend $250 on one website or you spend $50 on a website with one of the brands, then you get a blowout at one of the Saks salons, the salon project. And so they're collaborating because they're both clients, we want them to share customers. It's non-competitive. If you're buying a dress, you're getting your hair done. You're buying shampoo conditioner. A berret. Fact is, is $65 ponytail, $70 shampoo and a $4,000 dress. It's the same customer. So I think that these marketplaces have really opened up another world where maybe you don't need to go into a multi-brand retailer as much, if more of the brands actually start connecting and leveraging each other.

[00:24:47] And I think technology is gonna be, what's gonna make that happen. 

[00:24:51] Brandon Rael: Obviously echo sentiments that we challenge our clients to open up their silos, to become more holistic, look at the customers, one channel, one experience. Now we can challenge these brands to service this customer with offerings and, and benefits and lifestyle enhancements that this cross brand cross company collaboration is a, win-win not only for the customer for the brand.

[00:25:12] So why not capitalize that customer coming to your department store or the mall and provide those experiences they're seeking.

[00:25:18] Erin Raese: Well, what that begins to do is it, it changes it from being more transactional as well to more emotional. And we really we're having this conversation on loyalty for about 30 minutes.

[00:25:29] Now, I noticed that we really haven't talked about what makes people loyal is that emotional aspect. And, and that's what turns you away from the, the discounts and, and gives you more elasticity with your pricing as well. 

[00:25:42] Ricardo Belmar: Yeah. I love that point about the emotional connection, because isn't that really why the retailer wants to have this loyalty program and wants to have more customers in it is to create a better bond to the brand with the customer.

[00:25:53] And I think if you don't have that emotional connection, which in my opinion, price, discount alone is not going to move the needle on. Then how loyal are they really, are you really just then growing a loyalty program for the sake of large numbers that you just have a lot of people in it, but are they really doing anything for you?

[00:26:09] Ultimately your goal should be to get a better lifetime customer value out of every member that joins that loyalty program? One of my favorite loyalty program, examples, is Ulta Beauty. When I last looked in one of their annual reports, something on the order of what is it, 75% between 70 of a 90% of their best customers, 9 98.

[00:26:26] Wow. It's even even high 98. Coming from loyalty members, right? 

[00:26:30] Erin Raese: 98% of their transactions. That's unbelievable are, are loyalty. I think 

[00:26:34] Ricardo Belmar: that's unbelievable. Wow. That's just amazing. 

[00:26:36] Brandon Rael: That's amazing. 

[00:26:37] Trevor Sumner: And why, what do they get?

[00:26:39] Brandon Rael: Yeah. What does Ulta provide that makes them come back for more? That's the, really the question, what differentiates them versus Sephora? 

[00:26:44] Erin Raese: Well, the story behind Ulta is remember they started as a discounter and then they started their loyalty program and people weren't allowed then to get discounts unless they joined the loyalty program.

[00:26:55] So they were trying to move upstream as an organization overall. And that was really from the beginning. And then now that they've been established in doing this for years it, it still is that way. So if you want to get extra value, you wanna get any kind of benefits. You have to be part of the program.

[00:27:11] And so they made their program really synonymous with their brand and they get a variety of additional benefit. So there's, there's services, there's other options. There's, early access, depending on, on the type of customer you are. So a lot of extra I think we were kind of going in that direction with this conversation at one point, but there's these, what can you deliver as a retailer that that's extra service or extra support of customers yeah.

[00:27:38] Is what an Ulta is doing in some of the other retailers like a Nordstrom doing as well. 

[00:27:43] Trevor Sumner: Yeah. But I think it's interesting that again, it leads with discounts and value, right? And I do think that that's a big part of the story. Even though there, it, it kind of detracts some lifetime value because you're reducing margin on a per transaction basis.

[00:27:55] Value, I think being the best at value, like we're trying to find clever ways to not discount and keep the margins up. And there are clever ways that people are doing it. But I think if you're great at the value story, that that enough is a success. And I think that some of the future around is, we talk about marketplaces, but I think like one of the underlying technologies that's really fascinating right now is just what's going on in FinTech and transaction processing and, and enabling skew level data.

[00:28:21] It's All About the Data

[00:28:21] Trevor Sumner: We talk about retailers collaborating to provide discounting across them, but you could also, with the death of the cookie, right, start thinking about how you can share data, get better first party transaction data as to what consumers want and share that data as a, as a value in your loyalty program and, and understanding of the customer base.

[00:28:41] So I think there's a bunch of stuff that's gonna happen where retailers are gonna combine in interesting ways and underlying a lot of this is that a lot of retailers will become banks and get into a finTech stack. 

[00:28:53] Ricardo Belmar: And you see that as potentially an added service value to a loyalty program, for example.

[00:28:58] Trevor Sumner: Absolutely right, because you're taking part of the margin of the transaction. But more importantly, you're connecting the, all the, collecting all the transaction data as well both in store to online, all of it together. And so that data is huge. And once you have that data, you can start sharing it in interesting ways.

[00:29:16] So like Walmart and Sam's club and all these different, kind of properties that you own, but even in an extended way across your brands, like a gap and Old Navy bath and body works, et cetera. But then maybe even cross, like you could create models where, you could create some, Hey, I've got this mobile number, which is Trevor's mobile number and you ping it.

[00:29:36] And Walmart tells you what Trevor likes to buy and shares that data in some interesting way. Now, I don't think retailers will naturally do that. In some open fashion, because they're very proprietary about that, but there's some interesting ways you could collaborate. 

[00:29:47] The question is of course, how do you get data? And, we talk about a AI machine learning. And whenever I see a technology company with AI and ML, it's like, well, what's your data advantage, right.

[00:29:58] And I think that's gonna be something that that, that we should really be looking at, not just in the. The technology for analyzing the data, but how do retailers and brands get access to new data streams that give them a proprietary advantage? And I think there's gonna be a lot that happens in the next five years around that.

[00:30:19] And you're gonna see in just interesting partnerships and acquisitions really just solely associated with data. 

[00:30:25] Erin Raese: loyalty programs can't do it all. But if you think about loyalty and the loyalty concept at its core, and you stop thinking about it as points and discounts and all of that, you actually can begin to collect that kind of information.

[00:30:41] So you use the loyalty, call it a club, call it an initiative or something is if you give me your information, I promise to give you a better experience, cuz then you have that. And there's loyalty technologies that are out there that have the ability to take in that information, allow you to action on any data point, any combination of data points and they can collect it from any one of your technology.

[00:31:07] Partners and, be like a backbone to connect everything. And they also have some of them also have social aspects. So you can track people's behavior around social. If you wanted to, recognize the fact that they were talking about your brand somewhere, or if you wanted to bring in your influencers into the mix and, and do something special for them.

[00:31:27] So there, there are some that are out there that can actually make this. And loyalty is one of those places that can help. I'm not, I know there's a lot more to it. I'm not trying to oversimplify, but but it, there is an opportunity to look at loyalty a little differently. 

[00:31:39] Ricardo Belmar: Yeah. I agree with that and you know, certainly not the least of which is the elimination of this reliance on, third party data like cookies that we all know are going to be going away and, forcing a requirement for more first party data, which obviously loyalty programs are a great source to drive that.

[00:31:54] But one of the things I can certainly expect to see much better results from over the next few years. And as we're thinking of 2025 and how retailers are gonna leverage first party data be able to personalize better, feed that back into loyalty programs, to define those more unique experiences they can offer to the most loyal customers.

[00:32:13] I think that will happen. There are solutions today that I could point to that talk about how they're using, Trevor, your point, AI and ML to pull together and, and recognize customers within a program, which, let's take an extreme case where a customer is signed up for a loyalty program with a retailer a year ago, and then doesn't remember they signed up, you know, did some interactions with the retailer and then maybe signs up again with a different email address. A retailer wants a system where the AI or the machine learning can actually figure out, you know what, this is the same customer.

[00:32:43] So let's merge that data and build an even better profile about that customer. I think Erin, you mentioned the social listening aspect and how you could also connect the dots between what those customers are saying in social. So you certainly expect a better understanding of the customer as your loyalty programs, ask those customers to put in a, a link to their Twitter account or their Instagram. So you do get an understanding, what kinds of things do they talk about? And if they mention your brand, then you can connect those dots back into that profile that your loyalty program is building for this customer. Then let's say they're in the store.

[00:33:16] And I think we haven't talked too much about how the loyalty program can help you in store. So I'll throw out a couple of points there. I'm thinking about one is something that Trevor has talked about in this forum before and how you interact with merchandise in the store, through sensors and, and other computer vision types of applications.

[00:33:33] If I can know something about that customer or let's say it's not even directly manipulating the merchandise. Let's not forget we have ideally, really well trained staff in that store. And those frontline workers are engaging with this customer. And now let's give them access to some of the loyalty information hopefully not in a creepy, mysterious way, but in a way that they acknowledge to the customer that they're opening up this type of access in a manner that helps them better serve that customer.

[00:34:00] So now your loyalty program is feeding data into those store associates, so they can better interact with the customer and hopefully provide an even larger transaction value out out of that interaction. I think all of these things relate and, I feel, we haven't gotten to a discussion yet, which I, I did want to get us to.

[00:34:17] And before the end of the hour here and how we can tie in loyalty in the future to what's happening in store, as well as online. I'll come back to that. 

[00:34:24] Trevor Sumner: All right. One other piece that that also is, if you get to know your, your loyal customers really well, how can you actually profile them in a way that you can then better target new customers,

[00:34:36] Ricardo Belmar: right. That's right. And that, yeah. Use that as a model to improve your targeting. Absolutely. 

[00:34:41] Trevor Sumner: Totally. I download the app now, you know, everywhere I go.

[00:34:44] Right, right. You know, the things that I do and now you can do lookalike type audiences. And again, really understand the behaviors that drive new client acquisition as well. 

[00:34:52] Ricardo Belmar:

[00:34:52] Favorite Loyalty Examples

[00:34:52] Ricardo Belmar: 1 thing that makes me think about that I'm gonna ask this to everybody up on the stage here, if I were to ask you right now in today's loyalty programs, what retailer do you like that does successfully create that emotional connection through experiences or other tactics they provide within that loyalty program?

[00:35:07] Jeff Roster: REI, much to my wife's chagrin . 

[00:35:11] Ricardo Belmar: What specifically, Jeff, are you thinking that REI does well? 

[00:35:13] Jeff Roster: Just, you know, just an ongoing reasonably placed communication about what's happening, 

[00:35:18] You know, based on season. So we're just finishing up the summer season getting ready for, for ski season, things like that.

[00:35:25] It's not really a discount program, but it's a co-op model. So the more money you spend, the more you get back, kind of a deal. It's just a good environment. 

[00:35:33] Trevor Sumner: And also I think it's very interest driven and it's a membership, right?

[00:35:37] And it feels like, it feels like you're part of a community and it's part of a community that stands for something. And, so there's an identity there that is much more than the very value oriented discount play that I'm still a great advocate for. 

[00:35:53] Jeff Roster: Yeah, not a lot of, not a lot of, discount when you talk about REI that's for sure.

[00:35:57] Casey Golden: You know, it's the weirdest thing. I have been a Mac cosmetic customer since I saw Ru Paul the first time when I was like 17 years old and they have a recycling program where you bring six empty containers and then you get to pick out something for free. It's the only thing I really recycle and I've been doing it for over 20 years.

[00:36:21] I only recently started exploring other brands because I always got amazing service and I never bought eyeshadow, lipstick, or any of these things because I just recycled them. I have to say that's like the only loyalty program that has literally been in place for so many years. That did definitely work on me.

[00:36:42] But I feel like there's so much more V I P experiences. I don't think it's a loyalty program at Equinox. I think I just have like VIP access to certain stuff. And some other brands where you've just gone up a tier. 

[00:36:55] But, I don't think that, you know, there's no points or anything like that, you know, 

[00:36:58] Jeff Roster: that's that's loyalty though. Yeah, that's the, absolutely.

[00:37:01] Casey Golden: Yeah. I mean, they're just very unstructured, 

[00:37:03] Ricardo Belmar: but it still gives you that, that VIP status. So in a sense, the program is working and that it makes you feel like you're getting some special value out of it. 

[00:37:11] Casey Golden: Exactly. I mean, I know that they're done very manually.

[00:37:14] You have to remind them who you are. , 

[00:37:18] Ricardo Belmar: there's a case for how technology 

[00:37:19] Casey Golden: a lot of time

[00:37:20] Brandon Rael: it's painful, 

[00:37:22] Casey Golden: but there's a lot of opportunity in those, those types of experiences, especially now when people are fighting for business we just opened up the salon on a Sunday for somebody almost any hair salon that's closed, will literally open up their doors for business.

[00:37:37] But somebody felt like a V I P for the day, they're like, oh, you got me a hair appointment. You're kidding me. You know? And it's just like, everybody wants business. I think it's just a matter of like, starting to operationalize these things a little bit more to recognize that customer and, and anticipate what they would like.

[00:37:56] Shish Shridhar: The other one that I'm very fascinated about, I'm sure a lot of people are, is Patagonia. Patagonia primarily uses their social impact platform and the environment really to, to drive that loyal fan base. And I think that that's a really, to me a powerful example. 

[00:38:13] Brandon Rael: Just a few, a few brands I wanna call out.

[00:38:16] We Starbucks is, is an underrated app. They integrated their payments and their loyalty program it in the app itself at the surface. It's a pretty straightforward, transactional based system where you get points for your purchases. You can redeem them. There's a lot of gamification as well at bingo and everything else.

[00:38:32] Another underrated one is I think Marriot from a hospitality standpoint, it gives you a lot of access to obviously hotel points, but also premium rooms and other experiences and also interested what Uber is done and how they pivoted during the pandemic to UberEATS model when people weren't actually going anywhere and how you can accumulate points and, Uber cash and everything else.

[00:38:51] So there are unique and interesting things brands could do that pivot during challenging times. And Uber is Uber is one of them. 

[00:38:59] Ricardo Belmar: If I broaden it even to luxury as well, right. Luxury in some ways I would describe this as an advantage that you have the ability to use extended products as a way to create more brand loyalty.

[00:39:11] I mean, I could argue that. You know, brands like apple, for example, are exceptionally good at that by creating other products that loyal fans automatically want. And that just deepens the brand loyalty once they acquire those additional products.

[00:39:26] And that's an example of where you don't even need a specific loyalty program. You just have to do things that create loyalty through let's broadly, call it trust and authenticity of your brand with customers. 

[00:39:39] There are plenty of studies that come out that keep reporting how gen Z is much more willing to switch brands and maybe don't care so much about the traditional brands that used to engender that kind of intense brand loyalty as previous generations did. So there are definite things that can be done there.

[00:39:56] Additional experiences that can be offered to loyalty members. That's another area where we just generate even more affinity. And it becomes a matter of trust. I would argue because those experiences, you know, customers take them on because they trust the brand has curated a valuable experience.

[00:40:13] And because that experience has value, that's why they're going to stick with it and keep coming back more, more and more into the brand. 

[00:40:20] The Value of Customer Data & Experiences

[00:40:20] Casey Golden: The way that data has just been so abused and we've just lost a lot of trust and there's so much regulation and all of these different things are changing so fast. Once the consumer can hold and use their data.

[00:40:34] They don't need to be paid for it. They just want value for it. Nobody's gonna get rich by Facebook giving you, a quarter of a quarter of a percent of a penny for every single time. Your data's like used on something. I think that it's just gonna end up compliance is just a lot easier if you're just dealing with individuals rather than doing all of this stuff behind the scenes. There's just more context. You have somebody saying I'm here. I want to engage. I'll tell you everything about me. Just provide me service, help me save time, help me have a better time. Help me find the right product. Show me something new.

[00:41:15] Surprise me. You know, the whole entire concierge side of retail is just, it's absolutely booming right now. I mean, I have so many friends that just have concierge businesses. They're overbooked, they're slammed, they're hiring like crazy. And they're doing so much stuff other than booking a restaurant or booking a trip.

[00:41:36] I don't feel that one strategy is gonna be right for all of retail. We all shop across different whether or not you're at Amazon or target or gap or Walmart or Chanel. We are very dynamic individuals. So I think everybody will have a bit of a difference, but I think ecosystems is the way to go.

[00:41:57] And it's gonna come down to where do you have access to, to product, but you get the best experience and marketplaces they're popping up like crazy right now.

[00:42:05] It's as if they never, they haven't been existed in the last 15 years. They're everybody has a new marketplace open with a point of view. I've never been able to buy so much exclusive product in so many places online in my life. But again, that doesn't help a gen Z or an alpha connect with the brand and people who are used to shopping with these brands, they're getting worse service than they have ever had in their life.

[00:42:27] So I think that this is the race that's on for like from now until 2025. It's I think it's gonna be more about personalization, customization, finding value for data and earning that. 

[00:42:42] Ricardo Belmar: Yeah, it's almost 

[00:42:43] Comes down to a, a brand versus marketplace kind of mentality around loyalty, right?

[00:42:48] Because to your point, if I can get that same product at 20 different places, and 19 of them are a marketplace, where is my loyalty going to, is the consumer, is it going to the brand or the marketplace? Is it going to the person that sold it to me? Cuz they happen to have it at the right time, at the right place at the right moment that I was looking for it or is it intrinsic loyalty to the actual brand of the product that I bought. It's much clearer, right? If you buy it direct from the brand, whether it's in their store, their website, whether their mobile app or wherever you interact with them, it's much clearer that way. If anything, I might even go back and say, if I'm gen Z, then I probably have gotten used to shopping around and finding that best place to buy item X, Y, Z from, and therefore my loyalty is really to the process, right? Not so much to the brand and no loyalty program can change that inherently unless it's doing something to improve the experience, whether the experience is in the store, because I interacted with some, a person at the store who helped me understand why this is actually the item that the most important item that I really want to get.

[00:43:53] And it's the one that I wanna buy versus anything else. And therefore, now my loyalty might go, not just to the, the store's brand, but maybe even to that store associate. Now I'm gonna seek them out later. That's an experience that helped build some of that loyalty versus just a click through by now button on a marketplace.

[00:44:10] Casey Golden: Yeah. I'm not even convinced we're gonna be continue using the word loyalty. I mean, I think it's, it's been diluted. I don't. I I'd like to see more customer retention costs and, and retention spoiling your customers versus acquisition. So instead of acquisition and LTV, I'd like to see, you know, retention and customer retention costs.

[00:44:33] Like how much are you willing to spend on a customer that spends a thousand dollars a year with you or $500,000 a year with you are, what are you willing to spend to give something to that customer to make a meaningful impact and, and build brand equity, not just a transaction. 

[00:44:52] Erin Raese: Casey. I, I love what you're saying. We, one of our clients actually, it's a grocer, a higher end grocer. They're doing exactly that. I mean, they're looking they're they're loyalty strategy is about putting a value on that particular customer and then working to figure out, okay, if I can if it's $50, a hundred dollars, $200, whatever it is that I, I can spend to keep this person, what am I going to deliver to them uniquely when they come and shop?

[00:45:21] Casey Golden: And I'm like, why is a new customer worth more than me? I've been with you for 10 years. Like I want the same deal. And I'll fight that for like two weeks. If I have to, until I get the deal for new customers. but I just feel like I should have been offered as a loyal customer.

[00:45:38] Who's already giving you money and staying spoil me. I will tell people and more people will sign up because you're spoiling your customers. And there's long term value. Like if I stay loyal, I'm continually rewarded rather than I'm. Rewarded by switching every six months or every 12 months or chasing the next new deal, reward me for staying 

[00:46:04] Session Summary & Closing Remarks

[00:46:04] Ricardo Belmar: Yeah, it's a good point. I mean, this is gonna be fascinating to, to compare the numbers each year, to see how this changes and to see how different loyalty programs evolve. I think that's what makes this such an interesting topic is because of how it impacts how retailers engage with their customers and how retailers measure that, engagement.

[00:46:23] I think Casey, you had mentioned some interesting points earlier about which sort of metrics might be more meaningful if once you are looking at loyalty versus just pure transactional relationships. And I think that's gonna evolve as well as we look to the next few years and how retailers look at loyal customers.

[00:46:39] I'm a big proponent of putting more emphasis on lifetime customer value and obviously loyalty programs are intended to drive a lot of that increased value and increased relationship increased spend. And we know that the most successful loyalty programs tend to do that. They create an environment where those loyalty members, they spend more with the retailer particularly when those are fee-based loyalty programs that deliver a lot of additional value beyond just discounts and things of that sort.

[00:47:08] Now we know that those types of programs really do have an impact and benefit for the retailer. And, some of the good examples that we mentioned , Jeff had a good example with REI. We talked about Ulta and interesting that we all managed to avoid talking about Amazon prime, which in some ways is the ultimate loyalty program.

[00:47:25] But the results for that were pretty obvious to see how that's come about. Walmart has had interesting results and I honestly was surprised with the numbers we heard over the past year of how many folks have signed up for Walmart plus but that seems to be working for them. 

[00:47:37] So I think there's definitely lots of room for change in loyalty programs. I think there's lots of room for new types of tactics and experiences to be built. I think we probably all agreed through this session that it it's about more than just pricing and discounts that the best programs develop community.

[00:47:54] They develop trust with the customer. They use experiences to drive that relationship and that those tend to be the ones that are most well received by customers. So Erin, I wanna give you one more opportunity if there's any kind of closing comment that you'd like to make that maybe is something we didn't cover in loyalty programs that you think is really worth mentioning here at this point.

[00:48:14] Erin Raese: Wow. No pressure. 

[00:48:15] Ricardo Belmar: Yeah, no pressure. 

[00:48:16] Friday. 

[00:48:18] Erin Raese: yeah, I think we, I think we covered a lot of the things that are important to cover. The way we look at it is it it's all about the collecting of the data in using the data well, so to a lot of the points that Casey and others were making, it's how to build a better experience , and then again, that goes to that, that's the foundation of what will create those emotional bonds.

[00:48:39] And that's what you need to get that stickiness. That's what you need to get somebody to actually start advocating for you. So, you know, we're just hoping that, more and more organizations are able to, collect that data and be able to have it in a format that they can use. And I think that that's a, real core challenge.

[00:48:55] The good news is there's technology out there to help 'em. 

[00:48:57] Ricardo Belmar: Yeah, in the end it is all about the data and what, what you can do with that data as the retailer to help your business and help improve that relationship with the customer. So I think on that note, we're gonna go ahead and close out the room.

[00:49:10] Thank everybody up on the stage. Thank and speakers. I know a couple of our speakers had to drop for other commitments. Erin, I want to thank you for joining us this week as our loyalty expert and special guest. And I really appreciate you spending the time with us here. I hope you'll come back and join us again in the future.

[00:49:24] Erin Raese: Thank you so much. This was a ton of fun. I've always been in the audience, so I feel like I've been a part of it for a long time, but thanks for having me on stage. 

[00:49:30] Ricardo Belmar: Absolutely. And, thanks everyone for joining us and have a great weekend. Bye everyone! 

[00:49:33] Recap, or ?

[00:49:33] Ricardo Belmar: Welcome back loyal Retail Razor Show listeners. We hope you enjoyed our panel of experts from that clubhouse session.

[00:49:45] Casey Golden: So let's change things up a bit. Usually this is the part where we either bring back one of our amazing clubhouse guests for a deeper dive into topics we didn't get into in clubhouse or summarize what the group talked about and give a few extra bits of info and our keen opinions on what was covered, but you know, we're not just moderators.

[00:50:04] So this time we're not gonna do either of those things.

[00:50:07] Ricardo Belmar: Wait, we're not. Oh, wait. So, so what we're going off script are we? Oh, okay. Casey, what exactly are we going to do instead?

[00:50:13] Casey Golden: Like we're, let's just shake it up a little bit. Since we recorded that session, there have been some pretty cool developments in new tech that could be the greatest thing to happen to loyalty since , well, loyalty. And you know what I'm talking about? we need to talk about web three, NFTs, and crypto

[00:50:33] Ricardo Belmar: Okay. Okay. All right. I'll I'll I'll bite into this one. Let let's do it. Let's dive into those topics. So if you're listening right now, you're probably saying to yourself, wait a minute. What just happened? Did I jump to another episode of the podcast and not realize it? What happened here? When did this become the pod on web three NFTs and crypto? Right?

[00:50:47] Casey Golden: Since I went head first.

[00:50:53] Ricardo Belmar: we, we are so off script here. Okay. Okay.

[00:50:56] Casey Golden: Yeah, don't worry. We've got your backs on this one. Turns out if we look into the crystal ball or just go back and listen to our 2022 top 10 predictions episode, we'll see that NFTs and web three, stand to change a lot about loyalty.

[00:51:11] Ricardo Belmar: okay. Tell us more, Casey. Tell us more.

[00:51:13] Casey Golden: So loyalty programs have traditionally, it's just been an email segmentation. right. And

[00:51:23] Ricardo Belmar: Yeah.

[00:51:24] Casey Golden: you know, you get 20% off for the first time you sign up for a newsletter. Then if you join the loyalty program, you'll get another coupon. But it's still better to sign up with one of our other email addresses and get the initial coupon.

[00:51:38] You know I think the consumer has, caught onto a lot of these discounts and, there's nothing new in anybody's newsletter.

[00:51:47] Ricardo Belmar: There's that too. Keep going, keep going.

[00:51:50] Casey Golden: Yeah, there's nothing really new in anybody's newsletter. So web three, just kind of, you know, hit in with what are some use cases and some utility for NFTs. And, retailers have been looking at the NFTs and really kind of diving into what are some great utilities for it. And loyalty has definitely stood out.

[00:52:09] I see a lot of the platforms that are coming out of web three, SAS platforms, are focused on loyalty programs and looking to sell their software to brands. NFTs are a new way to essentially manage those members and loyalty programs a lot easier and a lot more interestingly than just an email with a coupon So some of the things that, we've been looking at and I've been, talking to a lot of companies in the blockchain lately and working with commerce and, and really focused on what's the utility of an NFT to a brand. And how can that impact loyalty? And we're seeing rise in these conversations about gated commerce. And having this unlockable content, if you're an NFT holder and how do you engage in that community? Right. So we're taking that email list and we're turning it into a, a discord community with two way communication and

[00:53:06] Ricardo Belmar: which is new.

[00:53:07] Casey Golden: which is new and it's a heck of a lot less expensive. And there's. Not a big, you know, you're not going necessarily into the spam box, but you have to be present.

[00:53:18] Otherwise the messages will just pass you by.

[00:53:20] Ricardo Belmar: go right over you. Yeah.

[00:53:21] Casey Golden: Yeah. So you really have to build really interesting content and start understanding what, what matters to your customers. And I think that that's the first step is one being able to listen to your customers, see what people are engaging with in more of like real time and open up the communication.

[00:53:37] If you offer something terrible or silly you immediately know if your customers think that it's silly or doesn't provide any value. So you can ahead and iterate. So one of the things that I'm really intrigued with is, you know, more brands are launching their first NFT and it's typically going back to a charity collaboration with a great artist.

[00:53:58] Typically run by an agency for the project or the initiative. But there isn't a lot of utility yet. So with gated commerce, essentially, if you are an NFT holder of, let's say a mutilated ape or a doodle, I'm a big fan of doodles You authorize your wallet on the website. And if you are a holder, you go into unlock a completely new type of eCommerce experience, whether or not that's discounting for special pricing access to products that are not available for the general public and.

[00:54:37] Even being able to manage in person V IP events with having, you know, multiple tiers based off of, the NFT holders you can go ahead and create different levels of an NFT. And this I think is a little bit more interesting than email. Because you can actually drive business off of other people's loyalty programs or community.

[00:54:58] So it doesn't have to just be the brand NFT that they release to their customers, but you can start accepting other communities and other brands in one of the companies doing this right now is smart token. And I think it's a really interesting value proposition to connect loyalty programs across brands.

[00:55:18] Ricardo Belmar: Yeah, I think that's pretty, pretty clever. Right? So you bring in sort of adjacent communities, that might not normally. Either a part of your brand community or might not normally be part of your customer base. So you can use the loyalty prone kind of two ways, right? You're, you're sort of rewarding the people who are your loyal base, but you're giving them a connection to a new community that they might be interested in because there's some adjacent value to that.

[00:55:43] Let's call it secondary brand. So I think that's a really cool way of expanding a loyalty program. If I kind of think back to where, where you started going down this road here, first, you've got this great two-way communication where most loyalty programs before.

[00:55:56] And, and in fact, probably the majority of the things we talked about, even in the clubhouse session were really all one way communication, right? It's like you just said, it's emails going out to a customer base. So even if there're a fan base, what are you generating with those emails? What are you doing other than giving them special offers or discounts, in this way with web three and NFTs, you're creating.

[00:56:15] A really cool gated way to provide access to something that's totally unique. And I, I think one, and to me, this isn't even a new lesson to be learned right in loyalty is that if you create enough intrigue and uniqueness, right, you, you make those existing customers into. Advocates of your brand, because now they've seen something special, right?

[00:56:34] They're getting that special treatment from being your customer. And now that encourages them to wanna tell people about it, cuz who doesn't wanna share. . Who doesn't wanna share that you had this really cool, unique access to something that nobody else was able to get to if you're not a loyal customer.

[00:56:49] So now you've got the two-way interaction with your loyal customer is you've got community to community communication. You're leveraging adjacent communities. You've got uniqueness and intriguing by access to special events that are gated or, or it doesn't even have to be an event.

[00:57:02] It could just be special product. That you otherwise couldn't get access to. So that's more intrinsic value for that, for that customer. So these are all things that you just can't get from a one way loyalty program relationship. In the, old days of like last year,

[00:57:17] Casey Golden: And it keeps people engaged, right? Like, I mean, Everybody wants their loyalty commute, like their loyalty program to produce monthly reoccurring sales. I mean, I think that that's overall the goal, 

[00:57:31] Ricardo Belmar: right. You want that lifetime customer value,

[00:57:33] Casey Golden: yep. Increase that lifetime customer value, but that's a lot of content and value that you need to figure out how to provide every single month or quarterly and really decide how are you going to move the needle.

[00:57:45] If the only benefit is to one brand. 

[00:57:48] And I that this is kind of the most interesting piece is, I mean, we used to have wallets filled with plastic loyalty cards that we had to swipe and they

[00:57:58] were on 

[00:57:58] our 

[00:57:59] Ricardo Belmar: yeah,

[00:58:00] yeah. Way too many.

[00:58:01] Casey Golden: way too many way too many to the point where like I'm not carrying a secondary wallet to get like 5% off, like I'm over.

[00:58:09] Keep your dollar. That's fine.

[00:58:11] Ricardo Belmar: Yeah. That's not worth it. Yeah. Yeah.

[00:58:14] Casey Golden: but being able to do some types of collaborations

[00:58:18] and being able to have an NFT that actually holders are using and maintaining and continuing to be active with on a regular basis, whether or not they're with your brand shopping with your brand today or tomorrow. You have an activated member

[00:58:35] Ricardo Belmar: That's right..

[00:58:36] Casey Golden: because it's able to be used at multiple locations.

[00:58:39] And I think that that's super strong and it wouldn't have been able to be managed very well without an N fT 

[00:58:46] Ricardo Belmar: Yeah. And, in the end, all of this is changing our definition of that loyal customer. And I don't often hear too many people talk about this, but I'm, I'm gonna bring it up here. So to me, there's a difference between a loyal customer and an extremely loyal customer.

[00:59:00] Loyal customers, you know, they join your loyal program, they shop with you, but it's the extremely loyal customers that they don't just shop with. You. Repeat buy in some cases, right? If it's a consumable item, the same item over and over again, they're the ones that are telling everyone what they're buying and why they're buying it and why they love your brand. 

[00:59:19] The loyal customers, you're just on their go-to list, ? You're on their list of go-to places to shop at, but that doesn't mean that they're gonna keep buying your new products that you introduce just because they're loyal. Loyal customers say, oh, look you, the brand, my, one of my favorite brands introduce a new product.

[00:59:34] I wonder what that's like compared to something I've seen from another brand, but you're extremely loyal customers say, oh, I gotta have that. That's something new. I gotta have that 

[00:59:42] And if you've tied that to an NFT, . And you've given it special access to something, then wow. Now you've really got somebody who's not only engaged with you and wanting more and telling more people and bringing them into the brand.

[00:59:54] I mean they're just with you for life at that point. 

[00:59:56] Casey Golden: Exactly. And I think that being able to really understand how to separate these benefits and the values, because the person that would come in and shop with me every other Friday, who was one of my loyal customers and one of the brands top loyal customers, they didn't have a loyalty. They didn't weren't in the loyalty program because loyalty parks didn't work on designer clothing. it was only for downstairs. So, you know, I think that there's this re really great opportunity to be able to separate these in a way that it's not an email address, because a lot of the, the top 10%, 15% of shoppers don't wanna share their email address. They're not getting a coupon or a discount on the product they buy anyway, because.

[01:00:44] Loyalty points are not always usable on all products that are sold at the brand. And so this used to be two different ways to manage loyalty programs and to grow them. And now I feel so much easier to be able to say this entity goes to these customers, unlocks these value adds it's private. We're not emailing them.

[01:01:06] We, we are creating consistent value. And then you have your core loyalty programs where you're focused on acquisition and get driving that LTV up and getting that brand experience out there and being able to do it a lot easier to manage 79 million people. Right. 

[01:01:25] Ricardo Belmar: And, and more 

[01:01:25] Casey Golden: we forget a lot about the sheer number of people that these brands email on a weekly basis.

[01:01:33] and the sheer number of shoppers that are included in these loyalty programs or groups and how we segment we're not segmenting, a few hundred people. It's millions of people are going into segments and I think it can be very interesting on being able to manage that in an instant, by having connected technology versus, a barcode, a QR code, an email address, a coupon code.

[01:01:59] Like we don't, we're not gonna need coupon codes anymore.

[01:02:02] Ricardo Belmar: Yeah, but, and, and, and it'll still be personalized, right? So you still have a consumer who feels like this is a personalized relationship.

[01:02:10] Casey Golden: Yeah. I mean, I just went to an event during NFT NYC and there was an owner of a brand on stage. They just released their first NFTs for their VIP customers. And she said, I will never pay for MailChimp again. I think that that's pretty strong comment

[01:02:29] Ricardo Belmar: That's a pretty strong comment.

[01:02:30] Casey Golden: that by implementing even the first stage of changing their loyalty program and how they're engaging with customers over into NFTs and discord literally has an entire brand moving off of email marketing platform.

[01:02:45] I'm like, I don't know how that's gonna scale. I don't know if Bloomingdale's or, or Nike or Gap is necessarily gonna move off of email, but I think it provides a really interesting conversation as more of these blockchains come out that have lazy minting and the cost of mint or gas fees decreases to be able to run in the millions without costing the brand a lot of money.

[01:03:10] Ricardo Belmar: Yeah.

[01:03:10] Casey Golden: I think it could be really interesting. I, I have to say that email marketing platforms need to watch out 

[01:03:16] Ricardo Belmar: Yeah. 

[01:03:16] Casey Golden: something's happening.

[01:03:17] Ricardo Belmar: I think because of what you were just describing it, we're gonna, we're likely to see this come through stronger through luxury brands first, before it kind of moves down market to bigger and broader brands. But I think the luxury brands are gonna really pioneer this and kind of set the standard for how it's done. 

[01:03:33] And really show your other brand, the possibilities of what you can do with this technology to build stronger loyalty.

[01:03:40] Casey Golden: It's an acquisition strategy, as well as creating this new segment and be able to create like completely new brand experiences, whether or not it's member access or coupon or special pricing.

[01:03:54] It's in your face, like what is on the other side? And and there is, it's not, maybe it's not just a discount. You don't know what it is until you have one. And how do you get one? And, and it could adjust how, whether or not more consumers are gonna do some more brand switching as more technology is deployed.

[01:04:15] That increases the customer experience. The brand experience increases value cuts down on. Poor communication or one way communication that just kind of stale. I mean, I think we can all agree that email marketing is a bit stale. It works, it drives the revenue. I don't know if we can have all of our eggs in that basket anymore.

[01:04:34] But for all means, you know, don't turn it off until you've actually built your community somewhere, but I think it could definitely be a game changer. Because you can reload NFTs. You don't need to email these people six times a a week to tell them something new, you have to figure out one really, really great thing to do. And it's not necessarily gonna have to be only your brand because you can amplify.

[01:05:02] Ricardo Belmar: right. 

[01:05:03] Yeah. Going 

[01:05:03] Casey Golden: happening at your brand.

[01:05:05] Ricardo Belmar: adjacent brands. Yeah,

[01:05:06] Casey Golden: That is because you're a loyal member at another brand. And I think that this is, could be really compelling, especially for brands to mix that department store strategy, where we have a customer that shops across multiple brands they're coming into a multi-brand retailer to be able to have this greater value of access to product and, and use their loyalty points across multiple brands. Having NFTs cross brands for their loyalty programs is gonna be pretty disruptive,

[01:05:39] Ricardo Belmar: I agree, which goes back to why we had it on our top 20 22 predictions list. Doesn't it?

[01:05:44] Casey Golden: right. 

[01:05:46] Ricardo Belmar: well, Casey, that probably means it's a good time for us to call it a show. What do you think?

[01:05:55] Casey Golden: I think so we shook it up.

[01:05:56] Ricardo Belmar: So going off script,

[01:05:58] Casey Golden: it's always nice to just sit and sit around and chat with you, Ricardo. I

[01:06:03] Ricardo Belmar: That's right. 

[01:06:04] Casey Golden: like one of my best here over the last year, and I feel that, you know, we spend so much. Chit chatting with other people. It's always nice just to have a chit chat together.

[01:06:13] Ricardo Belmar: Just between us. Exactly. Exactly. We'll hope that listeners will let us know if they enjoyed our little off script moment for this episode. We'll see what happens next time . See what we do to change things up that time, but on that note, Casey, I think we will call this one, a wrap.

[01:06:28] Casey Golden: We're out.

[01:06:29] Show Close

[01:06:29] Casey Golden: if you enjoy our show, please consider giving us that special five star rating and review on apple podcasts. Smash that subscribe button in your favorite podcast player so you don't miss a minute. Want to know more about what we talked about today? Take a look at the show notes for handy links and more deets.

[01:06:48] I'm your cohost Casey Golden.

[01:06:49] Ricardo Belmar: And if you'd like to learn more about us, follow us on Twitter at casey c golden and ricardo underscore belmar, or find us on LinkedIn. Be sure and follow the show on LinkedIn and on Twitter at retail razor, and on our YouTube channel for videos of each episode and some bonus content. I'm your host, Ricardo Belmar.

[01:07:05] Casey Golden: Thanks for joining us. 

[01:07:06] Ricardo Belmar: And remember there's never been a better time to be in retail. If you cut through the clutter.

[01:07:13] Until next time, this is the retail razor show.