People used to buy products stock not only once a year. In Russia loyalty cards regularly use about 72% of buyers. To such conclusion the analysis of consumption of 40 thousand Russians in 220 cities came the research holding “ROMIR”. The loyalty system has long become a necessity for retail and business in the service sector. Early to afford to have loyalty cards could only the big retailers: it was expensive and required a lot of staff for developing and implementing marketing strategy. Now the owner of a small shop or salon can also customize proposals to clients independently using developed for this application that is installed on the online cash. But they should take into account its limitations compared to large retail and not to neglect its advantages.
A trap for the shares
Now, according to data from Nielsen, two-thirds of sales in the retail network are committed discounts. Share promo in the revenue of the retailers is growing steadily since the beginning of the decline in consumer demand in 2014. in 2017 sales discounts total trade turnover was 59%, now it has reached 64%. Increases not only the volume of sales in money, but the number of items that retailers sell discounts. So, in 2018, the number of products stock in the stores compared with the year 2016, up 40%. Grows and the size of the discounts from 20% on average in 2016 to 23% in 2018.
However, retailers have put himself in a trap, increasing the share of goods of stock instead of having to set up a loyalty system. A growing share of sales of products at promotional consume a large part of the margin. At the same time to stop providing discounts would be to lose in a price war competitors. Promotions reduced sales growth by 18% over the past five years throughout Eastern Europe, experts say consulting Agency Oliver Wyman. While the attainment of a critical share of promotional sales every additional 10% increase in turnover of the retailer will entail the loss of 1% of net profit, estimated they.
This problem has faced all of the biggest retailers in the country. About the need to at least stabilize promotional activities, and declared the leaders of the largest Russian networks X5 Retail Group and “Magnit”. If the buyer comes for discounts, this does not mean that he is loyal to the brand and will return when the retailer will cease these discounts to provide.
Now big retail tries to make discounts more point, to establish a system of loyalty bonuses and personalized offers. For example, Wildberries provides a personal discount, which stacks with the promo on the website. The discount is calculated based on the number of orders and returns. Until 2013, all buyers upon redemption order is more than 15 000 rubles was a single 5% discount now the discount can range from 1% to 20%. With this system Wildberries including was able to reduce the number of returns. Another large retailer, Sela, used the game mechanics and loyalty programs in partnership with SailPlay that arrange for buyers and quests give you “badges” for “achievements” of loyalty.
From discounts to bonus
The loyalty system also requires an economic approach. So, video discount is a direct loss, but the bonus deferred. Bonuses the customer pays part of the purchase, not spend it all or buy any product, even for money. In addition, the customer is not always have time to spend bonus, and they are burned. For the year to a 10 percent bonus card businessman spends 25% less than for the card with a fixed 10% discount. The bonus system is best suited to stores in which a customer walks on a regular basis.
One of our clients grocery store in Moscow, conducted an experiment: set the online cash register app “Bonuses” and for three months switched from discounts to bonuses. Due to this the average check and the number of buyers increased, and the size of the discount has decreased almost twice. In the end, the store spent less per share, and customers are attracted more.
The tendency to go to the bonus maps already highly visible in retail, but discount cards are are more often. Almost every fourth buyer in Russia has a loyalty card retailers, and almost one in five (19%) — cumulative, says “ROMIR”. A third of buyers (33%) have both types of cards.
The fact that move a customer from one system to another is hard enough. Of course, the client had provided a discount card or promotions in the store, and now it needs to accumulate points to convert them into a discount. In the end, many retailers for some time have to include discount and bonus system, resulting in even greater costs.
Not smart in size
If a large retail business can bear temporary losses or to zero, the traditional trade to afford such luxury not. This means that the small business is vital to avoid all errors, which have already passed through competitors.
Firstly, it is impossible to issue the card and hope the customer will often come. It is necessary to examine the data shared by the client. If you do not analyze the database of their buyers and to build interaction with them, will always have to invest in attracting new customers instead of retaining the old. The buyer is willing to give information about yourself, but instead true waiting for personal suggestions. For example, a flower shop should offer a discount on the favorite flowers of the wife of a regular customer in honor of the anniversary of their wedding.
Second, the map better and not to give. To produce and maintain the physical cards are too expensive. In addition, it shows a lack of loyalty — only the part of the entrepreneur to the customer. People no longer even carry credit cards and use Apple Pay, and certainly they would not make an exception for coffee shops around the corner. Although 72% of Russians and use maps, among young people ignore them 37% of respondents, according to “ROMIR”. Discounts can be granted according to the customer’s telephone number, which online office and so keeps sending a check.
Large grocery supermarkets, online shops, fast food chains and even taxis provide a composite action with a variety of conditions (“Crossroads”, “Dodo Pizza”, “M. Video”, Lamoda and others). For example, the discount will only apply to black patent leather boots with zipper from the collection autumn-winter 2017 or just for the fabric softener with the smell of Mango with a volume of one liter. A small business can use all the modern mechanics of loyalty systems, but such actions with his little state may not be possible. Therefore, the smart terminals are the applications for necessary small business technology.
Of course, the major networks have entire departments of marketing and sales at loyalty programs. But a small business has fewer customers, may at first glance this may not seem a plus. If your coffee shop 270 regulars, you almost everyone can establish personal communication and to provide individual suggestions. Small businesses may each hear in social networks and quicker than corporations to change. But the main advantage a small business — is your loyalty to the client. Every day I see the Barista at the coffee shop near our office greets visitors by name, asked how they’re doing and can’t make any coffee “as usual”. Thanks to a trustworthy relationship with customers it is often possible to sell “syrup, which you haven’t tried” or “lavash with a new stuffing.”