The best way to create customer loyalty in shopping centres
With Björn Bjärbo, CEO at Goloyal.
Creating customer loyalty is something Björn Bjärbo knows a lot about. He’s CEO of Goloyal, who launched one of the first ever rewards programmes for shopping centres in Europe almost ten years ago. Since then, he’s made it his mission to digitalise the customer experience – and the results speak for themselves. Since introducing card-linking to their customer loyalty programme, Goloyal has increased the average customer transaction value by 64%.
So what’s his secret? We spoke to Bjorn to understand more about the challenges of building a successful loyalty programme, why knowing your customer is key, and how shopping centres can learn from the digital world to create real value for shoppers.
It’s been nearly ten years since Goloyal built one of the first rewards programmes for shopping centres in Europe. What’s different about the way you think about and build loyalty programmes now?
There are three very important changes that have taken place during the last ten years.
The first is, of course, the introduction of smartphones. Our first version of the centre programme was manual – members got a card sent home to them that they then showed in stores to get their benefits. Today we’re all digital, with everything integrated into members’ telephones.
The other two changes have happened more recently, and came with the introduction of Goloyal Play.
One was our decision to remove offers and discounts as the driver of the programme. Goloyal Play is now based on challenges. Challenges help us to create value for the stores, as opposed to offers, which remove margins.
The other was the introduction of card-linking, which means we’re now able to get data about spending. Spending is the most important thing in shopping centres – without that data, there’s no way to deliver the full insight that’s needed to create a really great programme.
So what does make a great rewards programme – and how do you know when you’ve been successful?
The most important factor is that value is created for all the stakeholders in the programme. The stores need to benefit from increased sales, the members need to be rewarded for their engagement, and the centre needs happy retailers and happy customers. One challenge for the centre is that they need to understand how they can use the data that’s being produced. There’s real value in the database, but as long as the centre continues to act like a real estate owner, they won't be able to make the most of it. Digitalisation takes time and is difficult – so if you don’t understand the value of it, there’s a risk that investments that are made are shut down before the results start coming in.
Are there any other blockers to building loyalty in the retail space?
The retail space has great potential when it comes to building a well-functioning customer loyalty programme. If it’s created correctly, they have enough suppliers to ensure that real value is produced for members; the diversity to reward in both the short and long term; and great data collection possibilities, telling you more about your customers. But there’s a complexity in the structure of the retail space. The property owners own the retail destination, but don’t claim full ownership of the visitors. Instead, they rely on retailers to provide the customer value needed to create loyalty. Engaging with the property owners can be a challenge, but it’s important to make them realise that they need to get to know their customers. By engaging in a more direct and personal way, they actually have a much bigger chance of creating successful loyalty programmes than the individual retailers. There’s a lot they can learn from the digital world about how each of their customers is using their centre – and bringing a dollop of interactive fun to the shopping experience to encourage them back in store.
Your goal at Goloyal is to digitalise the customer experience. Why’s that so important, and how are you doing it?
Ask any e-commerce business in the world “Is knowing your customer on a personal level important to you?”, and you can guarantee that anyone that says no will be out of business before long. If you know your customers, you can increase relevance. With increased relevance, you can get your customers to return more often. This is the foundation of what we do at Goloyal. We get people that visit once per week to come back twice. We do this by creating the value of turning potential members from anonymous to known customers. Shopping centres and cities have great potential in creating this value if it's done correctly.
That’s the idea behind our product – a simple, easy to navigate app that doesn’t just have the shopping centre at its heart, but the retailers and customers, too. By building a digital product, everyone is rewarded – the customers, who are rewarded for their loyalty, as well as the retailer, who gain sales and insights. Delivering insights about footfall and dwell time means the Centre Management gets to know the people that use their centres on an individual, and that allows them to deliver a strong, bespoke experience directly to customers.
Everyone talks about building a better customer experience, but what do you think good looks like?
We as providers only have control over a fraction of making the customer journey better – it’s about so much more than how the loyalty programme works, or how the app is working. We have to look at the bigger picture: what does the customer want, and how can we help them achieve that? What’s great about e-commerce, what’s great about physical shopping, and how can shopping centres and cities make the most out of those elements? A good customer journey is not coming into a physical store and doing online shopping – that’s just confusing. Instead, the journey has to be relevant at the right time, in the right place. That’s a difficult balance to strike, but can be achieved if we as providers collaborate more actively with the retailers and the owners of the centres.
How do you think loyalty’s going to change in the next ten years?
During the last 10 years, the number of customer programmes has increased rapidly. It’s almost impossible to shop technology, clothes, food or coffee without being asked, "Are you a member? Do you want to be?" But very few of these brands have the opportunity to really meet the customer's expectations. In order to become a member of a customer programme, the prospective member needs to get something back. Value needs to be created.
Those who succeed with their programmes are those that create relevant (and often recurring) value. That’s not too hard for food chains or cafes. But how can a clothing store you visit twice a year, or even an interiors store that you shop at once a quarter, create sufficient value for their members? The end result tends to be lots of "unique" offers and newsletters that are pumped out to uninterested consumers.
There aren’t many places with as much potential to reward their customers as retail spaces. There are enough players and enough variety there to give more back, more often. By getting those players to cooperate, new opportunities are created for shops, cafes, restaurants and most importantly. for members. We believe that loyalty programs for retail spaces have the potential to be the most important loyalty programs for the future.
To see how Goloyal used card-linking to improve customer loyalty in their shopping centres, read the case study.