Shopping Centre Loyalty: An Industry Perspective · 1/1/2016  · marketing budget towards...

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Transcript of Shopping Centre Loyalty: An Industry Perspective · 1/1/2016  · marketing budget towards...

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Introduction

Why Research Shopping Centre Loyalty?

An Industry Challenge

Methodology

Research Platforms

Respondent Profiles

Key Facts Summary

SECTION 1 – The Shopping Centre Owner/Manager Perspective

SECTION 2 – The Tenant Perspective

SECTION 3 – The Shopper Perspective

References

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While loyalty programs are a proven way to

measure performance and collect customer

transaction data in sectors such as

supermarkets, airlines and food & beverage,

they are still viewed as a relatively new concept

for shopping centres. Perhaps this is due to the

complexities of having multiple tenants and

historically, a lack of technology to support

them.

Recent technological advances in this space

have made it possible to launch successful

centre-wide loyalty programs to include all

tenants, and be managed by a relatively small

team. This paper is designed to explore the

effects of shopping centre loyalty on sales,

customer experience, marketing and overall

shopping centre and retailer performance.

Considering that 61% of the shopping centre

industry is planning to implement a loyalty

program by 2019 (40% within the next year),¹ it

is surprising that there is little information or

any best practise guides available on this

specific subject. This paper was created to

provide owners, asset managers and

marketing managers with more information,

driven by extensive research into how the

industry is using it today, and what the future

holds.

Further to this, with so many measurement

metrics available, there is little consensus on

which to use within shopping centres. Metrics

such as ‘sales densities, commercial value and

the annual value of the customer’² are popular

within the asset management function, but are

not used as frequently within the marketing

function. This paper takes a closer look at

shopping centre loyalty as a performance

metric. We will also look at the performance

results for those shopping centres who have

implemented a loyalty program.

Centre-tenant collaboration is a struggle for

some centres. We will explore how loyalty

programs may be able to help both parties

work towards a mutual goal, and whether

loyalty data sharing can improve this

relationship.

‘Big Data’ is a term that many shopping centres

struggle with. Even basic database and CRM

management can be tricky with legacy

systems and departments working in silos. We

have done some research to see how the

leading developers are managing and

analysing their loyalty and sales data. And

what impact this has on their understanding of

the customer and their marketing efforts.

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Coniq, loyalty specialists and technology

providers for the shopping centre industry,

undertook extensive research to understand

the different perspectives on shopping centre

loyalty. Shopping centre owners/asset

management/marketing, tenants and shoppers

were researched.³

The aim of the research was to discover the

benefits, uses, challenges and opinions on

shopping centre loyalty, along with how loyalty

data is used within the centre and whether it is

effective.

A combination of research platforms5 were

utilised using a mix of quantitative and

qualitative research. These were split between

three streams of research 1) Shopping centre

professionals including owners, developers,

asset managers and marketing managers, 2)

Retail brand managers, and 3) Shoppers (end

users). This was designed to discover different

perspectives and gain a 360° view on whether

loyalty programs can add value for all

stakeholders.

Research included surveys, industry polls

within online events, shopping centre exit

surveys, and a Coniq hosted Asset

Management Workshop (with thanks to the

ICSC). Also, a roundtable discussion, hosted by

Coniq, in conjunction with trade publication

Shopping Centre magazine.

Research was carried out among over 500

shopping centre owners, managers, retailers

and shoppers across the world.

The ‘Owner/Manager’ research stream4 was

split by shopping centres (80%), outlet centres

(38%), retail parks (10%) and town centres,

BIDS (10%) (Some respondents covered a

combination of retail formats). Retailers were

split evenly by large, medium, small and across

different price points and sectors.

The research was structured to answer the

following questions:

- What is the

loyalty program adoption rate among shopping

centres? What drives shopping centres to

implement loyalty programs? How effective are

shopping centres at measuring performance

and collecting shopper data? What are the key

challenges and how are they overcome?

- Do tenants benefit from a

shopping centre loyalty program? What are the

barriers to joining a loyalty program and how

are they overcome? What impact does loyalty

have on tenants?

- Do loyalty programs

encourage shopper loyalty and which aspects

of shopping centre loyalty programs do

shoppers like/dislike? Do they visit more or

spend more when they are part of a loyalty

program? Which channels are most effective?

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25% of the industry has a loyalty program in place currently.

61% expect to implement a loyalty program by 2019 (40% within the next year).

38% of decision makers/ influencers are planning to spend around 10% of their budget on a loyalty program, with 29% expecting to spend between 10% and 50% of their marketing budget on loyalty programs, with many unsure how much to budget for loyalty.

The main reasons stated to implement a centre wide loyalty scheme are to ‘increase sales’ and to ‘gain shopper data.’

Perceived hurdles to implementation include

gaining ‘tenant acceptance’ and ‘more education needed.’

92% of shopping centres believe loyalty programs add value to tenants and shoppers, 78% think it is valuable for centre management and 90% think it is valuable for marketing.

Over 72% believe loyalty programs have the ability to improve the shopping centre industry.

80% feel that POS technology is essential for a loyalty program to be successful.

69% feel that increased collaboration with tenants is essential for a loyalty program to be successful.

71% of tenants surveyed are interested in implementing a loyalty program, but some have concerns about the practicalities of doing so.

Initial concerns prior to launching a loyalty program were mainly surrounding the ‘implementation of technology and interference with existing processes.’

95% of the surveyed retailers who have

implemented a loyalty program say the program is a ‘valuable marketing tool,’ 65% say it provides them with ‘valuable insight.’

90% stated they want to ‘remain in the scheme for the foreseeable future’.

90% of those using a loyalty program felt that the technology was ‘easy to learn’ and ‘quick to use’.

50% of shoppers would rather use their mobile app to find out about the latest rewards.

A physical card is essential for activation phase, with 84% using a loyalty card to register.

61% of shoppers’ stated they would be more likely to register if they were told about the loyalty program by retailers at the point of sale.

Reaching the higher tiers of the loyalty program incentivises 60% of shoppers to spend more.

82% of shoppers enjoy ‘receiving email communications about the program.’

Two thirds of shoppers said they expect a shopping centre loyalty program to ‘feel exclusive.’

Customers who are in an exclusive loyalty club spend 20% more money on average than those who are not in a club.

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Shopping centre owners and managers realise

the importance of collecting data to better

understand their customers. They agree that

data should provide ‘insights into the shopper

journey’, ‘shopper expectations’ and ‘how much

they spend per visit’.

A recent discussion roundtable6 hosted by

Shopping Centre magazine and Coniq found

that shopping centre owners and managers

now agree that data, information and

knowledge is most useful for ‘communicating

with consumers in a more personalised way.’

Using data to ‘get to know customers’ and to

interact with them based on what they like is

an effective way to encourage shoppers to visit

a shopping centre over a competitor’s.

The decisions shoppers make influences

retailer sales and ultimately the shopping

centre’s performance. Data can help identify

whether the centre’s marketing activity needs

to be adapted to better reflect customers’

needs.

According to a shopping centre owner

participating at the roundtable, “data is useful

to understand what shoppers want, identify the

gaps between those needs and the centre’s

current offer, and then find ways to fill those

gaps.”

Why are shopping centres implementing loyalty programs & are they deemed to be successful?

How do shopping centres measure performance?

Does retail format/size affect loyalty program adoption rate?

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Despite footfall counters, exit surveys and

retailer turnover reports being the most used

methods to measure centre performance, the

survey7 found that only retailer turnover reports

were deemed as an ‘extremely effective’ way to

measure performance. Footfall counters and

exit surveys were recognised as less effective.

Interestingly a slightly higher percentage of

those who found footfall counters and exit

surveys less effective were from an asset

management perspective, reinforcing previous

research completed by BCSC8. This leads us to

believe that retail sales are one of the most

important determinants of success, although

the information can be hard to gain with the

current leasing model, particularly in full price

centres.

A shopping centre owner stated that ‘Loyalty

programs that measure spend amounts at the

tenants point of sale, offer an alternative

approach to gaining some sales data.’

Shopping Centre Loyalty programs are still

relatively new for shopping centres, with only

around 25% of retail destinations surveyed

having implemented a loyalty program, though

numbers are predicted to grow substantially by

2019. 61% are planning to implement a loyalty

program within the next 3 years, and 40%

planning to do so within the year.9

In terms of loyalty program adoption, there

seems to be a fairly even split between outlets,

shopping centres and town centres.

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Interestingly 55% of those with loyalty

programs are larger centres (those with over

100 tenants); while 20% of medium-sized

centres (50-99 tenants) and 25% of smaller

centres (less than 50 tenants) have a centre-

wide loyalty program.

These findings suggest that having a high

number of tenants does not act as a barrier to

implementing a loyalty program, though we

found that smaller centres are likely to want to

put a slightly lower percentage of their total

marketing budget towards implementing a

loyalty program than larger centres. (See

section ‘How much should loyalty programs

cost’ on page 12)

The research shows the top four reasons for

owners/managers to implement a loyalty

program are:

1. Gain shopper data 2. Improve shopper experience 3. Build brand awareness and loyalty 4. Measure centre performance

Interestingly, reasons for implementing loyalty

programs appear to be slightly different

between traditional shopping centres and

outlet centres.

Shopping centres’ top three reasons are:

1 Increase sales 2 Gain shopper data 3 Improve shopper experience.

Outlet Centres’ top three reasons are:

1 Gain shopper data 2 Increase sales 3 Build brand awareness and loyalty.

Although the selections are not hugely

different, it is interesting to note the difference

in motivation for different retail formats.

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Geographically, centres in Central Europe and

Northern Europe see ‘gaining shopper data’ as

a more important reason to implementing a

loyalty program than ‘increasing sales.’ By

contrast the less mature markets of Eastern

Europe or those who have experienced a longer

economic downturn like Southern Europe saw

the ‘increase of sales’ as their top reason for

loyalty.

Interestingly Africa and Asia, though smaller

samples found ‘improving the shopper

experience’ and ‘measuring performance’ as

their main reasons. South American centres

cited ‘brand awareness’ as their priority when

implementing a loyalty program, interestingly

they also stated this is an area that they would

most like to improve on.

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Overall, all respondents agreed shopping centre

loyalty is beneficial for all stakeholders. Of

those surveyed, 92% ‘strongly agree’ or ‘agree’

that loyalty programs ‘add value to tenants’

and ‘add value to retailers’, 92% ‘strongly agree’

or ‘agree’ that ‘loyalty programs add value to

shoppers’, though slightly less with 78%

‘strongly agree’ or ‘agree’ that loyalty adds

value for shopping centre management. 90%

agree that ‘loyalty adds value for shopping

centre marketing managers’.

Over 62% of owners/managers are now aware

of the importance of ‘gaining shopper data’ and

87% on average see value for all stakeholders

involved. So what are the perceived challenges

to implementing a loyalty program? And do

these challenges change once centres start

running their own programs? Also, how can we

overcome them and make loyalty programs

more accessible for shopping destinations?

When asked to rank the challenges in order,

over 75% of shopping centre owners rated the

top challenge to implementing a loyalty

program as ‘gaining tenant acceptance’ along

with cost and budgetary concerns for the

smaller centres.

There was also a lack of knowledge into what

was available and how to actually ‘create and

implement a loyalty program’, as many centres

had not done this before. 65% selected ‘more

education is needed’ as one of their top

challenges.

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Whether you intend to go with a service provider or go it alone, read this eBook for Coniq’s top tips to launch a loyalty program for a shopping centre.

Loyalty programs are relatively new to the

shopping centre industry. An effective way to

lessen the risk when working on unchartered

territory is to collaborate with a partner

company such as Coniq, who have trodden the

path many times before.

Find a partner who provides a tenant

engagement team who can get tenants

involved in the program from the start and

keep them engaged over time. From our

research we found that only 7% of shopping

centres communicate on a weekly basis with

their tenants, with many communicating much

less regularly. A tenant engagement team can

improve this by working with the brands, on

behalf of the centre.

If you decide to work with a service provider,

find one who has many brands on their

portfolio, as they will already have some ‘buy in’

power with retailers before they start.

It is also important to make sure the

technology is retailer agnostic with minimal

installation, to avoid any barriers to

involvement. It must also be really easy to use

by shop staff, and should measure spend and

customer data at the point of sale (POS). Again

a service provider such as Coniq can provide

this.

Sharing the performance data is also important

to keep tenants engaged and optimising their

offering. It will keep them motivated when they

see their results. We find regular infographic

style reports are most digestible and shareable.

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98% of respondents found that being effective

at ‘marketing the program’ was of most

importance to implementing a successful

shopping centre loyalty program. ‘Capturing

spend data’ (96%) and ‘Personalised and

attractive offers’ (96%) were joint second, being

‘extremely important.’ ‘A mobile app’ and

having ‘staff promoting the program in the

centre’ were also highlighted as very important.

70% found ‘kiosks’ and a ‘physical card’ were

important.

Surprisingly 11% of respondents believed a

‘physical card’ was ‘not important at all’, all of

whom had not implemented a loyalty program

before. A majority of those who had

implemented a loyalty program before stated a

‘physical card’ to be ‘extremely important’.

Showing there are some differences between

what is assumed and what actually works in

practise.

Further research shows both cards and apps

to be equally important.

There seems to be no real consensus within

the industry on how much retail destinations

should budget for loyalty programs, with 33%

‘unsure of how much they should budget.’

38% of decision makers/ influencers are

planning to spend around 10% of their budget

on a loyalty program, with 21% expecting to

spend between 10% and 20% of their

marketing budget on it. 8% expect to spend

between 20% and 50% of their budget on a

loyalty program.

Research shows that outlet centres are more

likely to allocate slightly more budget towards

a loyalty program than shopping centres

would. Perhaps not surprisingly, there was a

slightly higher percentage allocation of

marketing budget towards a loyalty program

from larger centres in comparison to smaller

centres.

A marketing consultant in the retail industry

commented “Loyalty programs tend to have a

higher upfront cost to set up and generate

awareness. But once they are complete,

maintenance certainly tends to be less. It is

important for centres to realise the benefits as

soon as possible to justify the initial cost.”

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Research indicates that implementing and

running a successful loyalty program has a

direct impact on the performance of a

shopping centre.

Coniq’s reporting data across 20 shopping

centres shows that ‘frequency of shopper

visits’ can increase by around 30% within the

first 8 months of a shopping centre loyalty

program being implemented, while conversions

can grow by 15% in that same period.10

Those Shopping Centres professionals, who

currently run a loyalty program, believe that the

program helps them ‘perform better’ and plays

a key role in ‘establishing and strengthening

their relationship with their tenants’.

When asked what is needed to ‘make loyalty more prevalent in the industry’, ‘more integration of technology at the PoS’ was rated as important by 80% of respondents, which suggests a key focus is needed on this area. This is a key factor to allow all retailers to be involved in the program, and critical to data sharing.

This goes hand in hand with the need for an ‘increased collaboration with tenants,’ with 69% stating this is important. 84% of respondents believe loyalty programs have the ability to improve the relationship between centre management and tenants.

Better sharing of data needs to occur between centres and tenants along with increased collaboration with tenants. Both of which a loyalty program can improve.

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Over 70% of owners/managers with a loyalty

program stated they were ‘very effective’ or

‘extremely effective’ at measuring the

performance of their centre. Interestingly, a

majority of them also rated their relationship

with their tenants as ‘very effective’ or

‘extremely effective’.

Almost 80% had established a strong

relationship with their tenants through ‘regular

communication’. Many stated ‘sharing loyalty

data with tenants’ and ‘regular communication’

as the most effective ways to improve the

relationship between both parties.

By contrast, the shopping centres without a

scheme in place saw themselves as being

much less effective at measuring their overall

performance, only 14% of them thought they

were ‘extremely effective’, and when

communicating with their tenants, only 24%

had regular communications they deemed

‘extremely effective’.

These findings suggest that sharing data and

communicating with tenants may have an

impact on performance. Loyalty programs

provide more visibility over performance data,

and in particular transaction data, giving

centres increased confidence to prove that

they are performing effectively. By working

together towards one mutual goal (shopper

loyalty), tenant relationships can be improved,

despite it being seen as a challenge.

In an Asset Management workshop hosted by Coniq at the ICSC Asset Management Seminar alongside the ICSC Retail Strategy and Trends conference in Berlin in November 2015, a group of around 50 Asset managers were asked to create ‘a shopper engagement program’ for a fictional shopping centre, with the goal to build a database and increase spend. 5 groups out of the 6 mentioned a loyalty program as a key way to achieve this.

Interestingly how a loyalty program was created differed substantially across the groups. Some had ideas to drive customers to register for the program with offers such as free/discount parking that would be exclusive to loyalty members.

All groups stressed the importance of retailer inclusion in the program, and suggested using ‘technology to track sales increase at point of sale.’ It is important that the technology does ‘not interfere with retailers’ existing technology’ and for it to be ‘easily implemented and used by staff’. Beacons were highly disputed with many different opinions as to whether they were ‘worth the expense’, and whether they were ‘actually accurate’. Asset managers were concerned with ‘spamming customers with too many notifications’, and stressed the importance of ‘gaining correct email addresses’. They did however all agree that ‘personalisation, if done correctly could be very effective’.

Generally all of the asset managers were very involved and enthused by talking about marketing and loyalty. They realised the importance of understanding and implementing marketing strategy to increase the value of the asset.

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Previously, in the owner/manager section, we

found that 92% owners/managers believed

that loyalty programs ‘add value for tenants’,

and engaging with tenants is important for

loyalty success, yet they also stated ‘tenant

engagement’ was one of their greatest

challenges.

We interviewed over 70 tenants before and

after joining a shopping centre loyalty program

to understand whether tenants had concerns

and if/how they were overcome.11 We also

wanted to find out whether they liked the

shopping centre loyalty program* that they

were enrolled in, and whether it had achieved

the results they hoped for.

71% of retailers interviewed who were not part

of a loyalty program were interested in

becoming a part of one in their centre, but had

concerns about the practicalities of doing so.

They said that if they were resolved, they would

be excited to see the data and results.

The majority of retailers who are currently

enrolled in a shopping centre loyalty program

are happy with it and would like to continue

using it, with over 90% of them wanting to

‘remain in the scheme for the foreseeable

future’.

The top benefits of a loyalty program from a

retailer perspective are to:

1) Better understand their customers 2) See a direct increase in sales at the point of sale 3) Have more control over marketing at store level

65% of the surveyed retailers said that the

centre loyalty program provides them with

‘valuable customer insight’, while 95% of them

said that the program is a ‘valuable marketing

tool’ provided by their centre management

team.

Do retailers want to enrol in a centre wide loyalty program?

What are their concerns and how are they overcome?

Which retailers see the best results and why?

Do retailers want to enrol in a centre wide loyalty program?

What are their concerns and how are they overcome?

Which retailers see the best results and why?

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Perhaps not surprisingly, one of the key

concerns for retailers, before taking part in a

loyalty program, was around the

‘implementation of the technology’; concerns

were surrounding the risk of interference with

existing processes and systems at the point of

sale.

However, 90% of retailers enrolled in a loyalty

program which uses scanners that sit beside

the till with no interference with existing till

systems felt that the technology** was ‘easy to

learn’ and ‘quick to use’. They also said the

‘customer app and website’ are ‘user-friendly

for the customer.’

Research shows that tenants, who have experienced being a part of a centre wide loyalty program, find it successful. This suggests that most concerns happen in the initial phase due to a lack of knowledge and uncertainty. Perhaps more education into how the technology works and by providing successful case studies to brands from other centres up front, help this initial conversation.

Coniq find that having a dedicated tenant engagement team*** can gain an average of between 70-90% of tenants enrolled on a loyalty program before the program is launched.

Retailers who are engaged with the program see significantly better results than those who are not actively providing rewards and using data available to them.

Both sharing performance data with tenants and providing staff incentives are proven to increase motivation at a store level and increase overall program performance.

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Around half of the retailers who were enrolled

on the loyalty program stated that the program

‘encourages loyalty’ by increasing the

‘frequency of customer visits to their store’.

Many of these retailers mentioned they could

see more customers coming into their store as

a direct impact of the program.

Perhaps not surprisingly, the retailers who had

seen the best results had actively engaged with

the program by providing relevant and

attractive offers. They had used the data they

received from the centre to optimise their

performance. They also saw the importance of

‘engaging shoppers at the point of sale’.

Centres with a tenant engagement team keep

retailers incentivised and communicate

regularly with store managers to encourage

them to optimise their offers and align with

their brand strategy.

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Before they are part of a loyalty program,

retailers expressed different concerns about

joining according to the size of their business.

Smaller independent retailers are more

concerned about the practicalities of

implementing a program and the toll it is going

to take on their resources. Their key challenges

are having enough staff to manage the

program, implementing and using the

technology. To overcome this, smaller retailers

may need more reassurance that the

technology is ‘easy-to-use’ and ‘point-of-sale

agnostic’. A demo of the technology may be

useful at this point to show it working and to

demonstrate ease of use.

Larger retailers, before implementing a loyalty

program, are more concerned with being able

to ‘measure the program’s success’ and

‘proving its effectiveness in gathering shopper

data and driving sales’ – larger retailers need to

prove ROI to their head office. Sharing the data

back to the retailer proves helpful here. This

will allow the retailer to optimise their program,

and to measure their performance within the

centre.

Coniq finds that weekly or fortnightly reporting

using infographics is an effective way to

engage retailers in the program. The reports

keep retailers motivated to optimise their

offers, and then to share their success with

head office.

All types of retailers, before taking part in a

program, stated that a ‘centre wide loyalty

program’ would be beneficial for ‘store level

management’ as the program acts as a tool to

provide store managers with ‘more data’. They

said this would provide them with ‘more control

over the performance of their store’. In addition,

they saw a loyalty program as a ‘strong

motivator for staff on the shop-floor’.

Staff should be encouraged to engage with

customers by proactively scanning the loyalty

card or app of those who are already members,

and encouraging new members to sign up to

the program for the first time.

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In the current omni channel environment, the

customer journey is no longer linear; it has

become more complicated. Customers are

moving across offline and online channels to

shop and access information – brick-and-

mortar stores, websites, apps and social

media. Neinver recently referenced this as the

‘Omni Channel Eco-System’ in which all of

these channels should connect for a single

customer view12. Loyalty programs certainly

play their part in this eco system allowing sales

information to feed in real-time into one central

CRM. In turn this allows shopping centres to

create memorable experiences and include

offers and promotions that are personalised

and relevant to each customer. These should

also be easy to use and to redeem across any

channel.

With the ever increasing quantity of

information and digital communications

received by customers, loyalty offers also need

to be targeted, creative and innovative to make

their mark/have any impact.

So how do shoppers find out about loyalty and

do they use it? What are, according to them,

the most successful offers and what would

they change, if anything?

Coniq conducted research among the

members of a shopping centre loyalty

program13 to better understand what drives

shoppers to a centre, and whether a loyalty

program encourages them to visit the centre

more.

The research shows that one of the most

effective ways to encourage shoppers to sign

up to a program is within the centre. In fact

61% of shoppers stated they would be more

likely to register for a loyalty program if they

were told about the program ‘by retailers at the

point of sale’. At that time, retail staff can

explain the benefits of the program and answer

any questions shoppers may have, when they

are at their most engaged point of the

purchasing journey. Supported by onsite

promotion, this is the most effective way to

sign-up new members, and indeed most new

registrations currently happen in store.

Do shoppers want to join a shopping centre loyalty program?

Which channels are most successful in activation and management for shoppers

Which tactics are most effective?

Do shoppers want to join a shopping centre loyalty program?

Which channels are most successful in activation and management for shoppers?

Which tactics are most effective?

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New registrations will typically do so with a

physical membership card, but an increasing

number of shopping centres now offer a

smartphone app to shoppers. Research shows

that both are critical for program success, with

members moving from using their card in

activation phase, to their smartphone app to

manage their offers and redeem rewards.

The app allows shoppers to easily redeem their

rewards, and keep up to date with the

program’s new offers and promotions in a

more accessible way.

In fact, 50% of shoppers would rather use their

app to find out about the latest rewards, and

two thirds of shoppers rely on email

communications to keep up to date.

A small but growing number use Apple Wallet

to store their virtual loyalty card and offers,

with around 5-10% redeeming rewards using

their Apple watch within the shopping centre.14

Loyalty programs with simple and easy-to-

understand dynamics tend to see higher

shopper uptake and usage. From

understanding how to earn points, through to

checking their progress and knowing what

rewards they are aiming for, the process

should be as easy and seamless as possible.

It is important to offer as many redemption

options as possible to maximise program

adoption and usage. A combination of branded

loyalty card and digital app works best as it

covers most customer needs.

When it comes to keeping shoppers motivated,

a tiered system is proven to be an effective

approach. Reaching the higher tiers of the

loyalty program incentivises 60% of shoppers

to spend more.15 The key to increase shopper

activation numbers is to offer small rewards

within easy reach in the first tier, with the next

tier offers visible to unlock, keeping members

engaged and motivated to reach the next tier.

Overall average customer usage

split is even for app vs card over time

Card/App usage for new members vs returning members (Coniq’s data from 20 shopping centre loyalty clients)

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According to Gi Insight in a recent study16, 64%

of shoppers said they were happy for a

company to hold and use their data as long as

it uses the information to send them “relevant

and timely offers and communications'. In fact,

the vast majority of consumers see schemes

as an essential foundation for an ongoing

relationship – so much so, 76% do not want to

hand over their data to a business unless it has

a “proper loyalty scheme”. However, this should

not be abused. It is important to communicate

clearly to customers how you will use their

data, ensuring their ‘opt in,’ and all data

collection regulations are adhered to.

Regular communication is necessary as 82% of

shoppers enjoy receiving email

communications about the program.17

Communications should be targeted, and

offers relevant for each customer segment.

This is where the behavioural, demographic

and spend data gathered through the program

can be used to optimise performance.

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Customers want retailers and shopping

centres to make them feel special. Increasingly,

they want experiences they will remember.

Two thirds of shoppers said they expected a

loyalty program to feel exclusive.18

High value customers who make up to 30% of

a shopping centre’s customers can account for

up to 75% of the total spend.19 A VIP club or

Gold tier within a shopping centre loyalty

program is a proven way to reward these

important customers. Once high spending

customers have been identified, it is possible to

increase frequency, spend and dwell time. One

way to do this is by providing exclusive events

and experiential offers such as fashion preview

evenings, a VIP Lounge, and free beauty

treatments etc.

Customer loyalty data20 shows that customers

who are in an exclusive loyalty club spend 20%

more money on average than those who are

not in a club. If a customer visits a ‘VIP’ or

exclusive lounge, their average dwell time is 18

minutes longer than those who don’t visit the

lounge.

To maintain shoppers’ interest in the scheme, it

is important to communicate with them

regularly, increase the number of participating

tenants and keep the offers/rewards new,

innovative and targeted. This is good news for

shopping centres as it is relatively easy to

create a strategy around exclusivity without a

huge investment of budget. Shopping centres

can target specific groups, such as students

and provide them with special events e.g

Trinity Leeds provides special ‘student lock-ins’

to boost membership registration and usage of

a specific segment. Special shopping areas or

events are particularly popular with high value

gold tier members.

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This study shows there is a definite benefit for

all parties; shoppers, tenants and centre

owners to implement shopping centre loyalty

programs and that loyalty provides an

opportunity to improve areas such as

measurement, tenant relationships and

customer experience.

Shopping centre loyalty has been proven to

drive increased frequency and spend. It may

also help shopping centres to measure their

marketing activities more accurately. As

adoption grows we will start to see marketing

managers starting to use loyalty performance

metrics within their monthly reporting.

Loyalty will play an important role in creating a

single view of the customer with its opportunity

to link online and offline. Advancements in

technology are heavily focussed on linking

these two worlds and loyalty is likely to play an

important part in this.

We should start to see more collaboration

between shopping centres and tenants with

the adoption of loyalty programs across the

industry, with shopping centres following suit

of Outlets.

Centres need at least 50% of their tenants

involved for a successful program. Therefore

communication and engagement with tenants

is essential. Data sharing from the centre to the

tenant will become very important here.

Loyalty is unchartered territory for many

shopping centres. There are companies who

specialise in this area who know best practise

to ensure success. From recommendations on

technology through to engaging tenants,

planning the program and marketing strategy

to launch and optimise it.

As shoppers increasingly want innovative

experiences, shopping centres always need to

find new ways to be creative with utilizing their

space. By providing exclusive experiences to

their highest spending customers or using

experiences to boost registrations, loyalty data

can provide more visibility on which campaigns

are most successful providing insights into

how to best to optimise their space.

Finally by linking online communication to

offline offers and promotions, loyalty helps

drive further footfall and spend to shopping

centres allowing centres to increase their

overall performance.

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1 Coniq original research, 2016. Survey completed by 125 shopping centre owners/managers, asset managers and marketing specialists, 2 British Council of Shopping Centres, 2015. ‘Marketing metrics for shopping centres: a best practice guide’, 3 See research details below. 4 See research details below. 5 See research details below. 6 Shopping Centre Magazine, November 2015. ’Data by design.’ Available at: http://content.yudu.com/Library/A3xur2/ShoppingCentreNovemb/resources/index.htm?referrerUrl= 7 Coniq original research, 2016. Survey completed by 125 shopping centre owners/managers, asset managers and marketing specialists, 8 British Council of Shopping Centres, 2015. ‘Marketing metrics for shopping centres: a best practice guide’, 9 Coniq original research, 2016. Survey completed by 125 shopping centre owners/managers, asset managers and marketing specialists, 10 Original research based on Coniq’s client portfolio, 2016. 11 Original data based on research amongst Coniq’s client portfolio, 2016. 12 Neinver, 2015. ‘NEINVER commits to the omni-channel model.’ Available at: http://www.neinver.com/en/article/neinver-commits-omni-channel-model 13 Research based on 50 shoppers in shopping centres across Coniq’s client portfolio, 2016 (See research details below) 14 From a sample of Coniq shopping centres who provide Apple Watch redemption 15 Research based on 50 shoppers in shopping centres across Coniq’s client portfolio, 2016 (See research details below) 16 GI Insight, ‘The essential components of a single customer view.’ Available at: http://www.gi-insight.com/whitepapers/the-essential-components-of-a-single-customer-view/ 17 Research based on 50 shoppers in shopping centres across Coniq’s client portfolio, 2016 (See research details below) 18 Research based on 50 shoppers in shopping centres across Coniq’s client portfolio, 2016 (See research details below) 19 Research based on 50 shoppers in shopping centres across Coniq’s client portfolio, 2016 (See research details below) 20 Research based on 50 shoppers in shopping centres across Coniq’s client portfolio, 2016 (See research details below)

* Coniq’s marketing and loyalty program

** Coniq’s easy to use, PoS agnostic technology and platform

*** Coniq’s marketing and tenant engagement teams who provide ongoing support

Shopping centre survey (125): Marketing (30%), Asset Management (30%), Centre Management (20%) Owner/developer (20%) Roundtable (19): Marketing (33%) Owner developer (33%) Real Estate Consultants (22%) Asset managers (12%) Webinar polls (200) Centre manager (25%) Owner/manager (30%) Centre marketing (25%) Retail consultants/press (20%) Asset Management Workshop (50) Tenant survey – 70 tenants Shopper survey – 50 shoppers

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ABOUT US CONIQ

Coniq are specialists in shopping centre marketing, loyalty and shopper engagement. Coniq's proprietary data-driven marketing and loyalty platform supports multi-tenant redemption, and makes executing campaigns easy for marketers. Supported and managed by Coniq's marketing and tenant engagement teams, the Coniq platform makes it easy to launch, manage and analyze a centre-wide loyalty scheme

across both online and offline channels.

Founded by entrepreneur, Ben Chesser, Coniq works with over 20 shopping centres, over 650 retail and hospitality brands, and many town centres. Coniq's clients include Land Securities, Value Retail, Hammerson, and the Heart of London Business Alliance. For more information, visit www.coniq.com

For more information, or if you want us to help you launch your centre wide loyalty scheme in as little as 4 months, book your first consultation and demo via this link: http://j.mp/Coniqdemo