Paula: Welcome to Let’s Talk Loyalty, an industry podcast for Loyalty Marketing Professionals.
I’m your host, Paula Thomas, and if you work in Loyalty Marketing, join me every week to learn the latest ideas from loyalty specialists around the world.
This episode of Let’s Talk Loyalty is a little different than my usual formats.
As you know, I typically bring an expert practitioner from a loyalty program, and I talk to them about all of their learnings and challenges from running their own programs and throughout their own career.
I also, from time to time, like to sit back and just reflect on maybe some information I’ve come across, maybe some new research that’s coming out.
And this particular show is exactly that.
I was writing an article for a client that I do lots of work for, a loyalty technology platform called Liquid Barcodes that I’m hugely passionate about and is very highly specialized and globally respected for driving loyalty programs all over the world, specifically in convenience retail.
So every week, I write an article for Liquid Barcodes about something that’s relevant in that particular sector.
And in this week’s show of Let’s Talk Loyalty, I’m taking an article I’ve written for them because I think it deserves a wider audience.
And in fact, it’s an article discussing a particular piece of research that comes out of the UK every single year and really gives me an amazing insight on the key consumer trends I need to be thinking about.
So the article was originally published on the Liquid Barcodes website, and it’s entitled Five Key Trends for 2020 in the United Kingdom.
So there’s no doubt that the UK market is a dominant and impressive influence on marketing all over the world, with extraordinary insights and expertise that I know we can all learn from.
Whether it’s loyalty programs, advertising campaigns, or simply underlying changes in consumer culture that can guide our business planning, I for one definitely keep a close eye on the ideas emerging from that market, and perhaps even more so in 2020 against the backdrop of social, political, and economic change brought about by Brexit.
This particular article was written before the coronavirus had become a contemporary issue all over the world, and for that reason it won’t be discussed as part of the key trends and things to be thinking about.
So one of my favourite resources to stay up to date on how technology, communications, and UK culture are evolving is published by Mindshare, which is a marketing agency that’s part of a global media network.
They have over 9,000 people working for them in 86 countries.
Now every year as part of their Mindshare Futures programme, they publish an incredibly detailed report on these UK trends, which has really proved useful for loads of my own marketing planning in the past.
So in today’s episode of Let’s Talk Loyalty, I wanted to summarise what they have talked about as their key trends for 2020, and indeed for the decade ahead, summarising which is actually a 30,000 word report into a more accessible version that captures my understanding of their key conclusions and of course translate them into exactly what I believe the implications are of those trends specifically for loyalty marketeers.
So if you find these ideas useful, I will of course include a link to the entire report in the show notes so you can read it at your leisure.
So what are the five key UK trends predicted for 2020?
So first of all, not all of the marketing research and conclusions are relevant for loyalty program planning.
However, I do believe it’s critical to understand as much as possible of this report if it truly is to help us grow our businesses and as it sets out to actually unlock growth.
So it is useful to consider these ideas in the context of what they describe as an increasingly polarized society.
So here, in my words, are their big five ideas and trends captured through a combination of both quantitative and qualitative research.
The first one is called finally 5G, but with a question mark.
While almost everyone has heard of 5G, the current levels of understanding of the potential impact of the software seem to be practically non-existent.
Consumers see the evolution as pointless as internet speeds are simply no longer an issue for most UK citizens, leading to a sense of really just being underwhelmed by just another G.
Now, even I hadn’t realized that 5G is over 100 times faster than 4G, which is leading Mindshare to describe the possibilities that the technology is enabling as literally the fire for a whole new world.
So, it seems as if the dramatic potential of 5G will in fact revolutionize our lives, but actually just not yet, with at least a four to five year window in transition as I suppose devices and networks build out the infrastructure.
Now, one great example quoted was the city of Barcelona, which apparently used 5G to roll out free high speed Wi-Fi, and at the same time saved itself 75 million euro and apparently created over 47,000 jobs.
And so I guess my view is that the impact of this technology is certainly not to be underestimated, but in the same way that none of us knew we wanted the internet, 5G brings extraordinary possibilities, including infrastructure efficiencies, but also the resurgence of things like augmented reality and virtual reality as really truly exciting options for marketing professionals to understand and now really consider seriously.
So the implications for loyalty, first of all, 5G clearly is a much more immersive experience.
So I do think gamification will become even more popular on mobile with the reduced need for expensive and bulky consoles.
Secondly, organizing your data is critical with linked and organized data described as vital for consumer insights.
It will be no longer just a nice to have, but really an essential underlying approach that consumers will expect if they engage with you across channels.
Secondly, data capture becoming increasingly personal.
So as we know, loyalty programs have evolved from simple demographic data collection through to data on our purchase preferences and patterns.
But actually, as we enter this new decade, data capture is really becoming increasingly personal.
So whether it’s the use of facial recognition technology, which I’ve written about on the Liquid Barcodes website, or the continued growth in the use of wearable technology, which assesses detailed and intimate data about our physical health, and potentially even our moods, there’s actually now no doubt that tech companies in particular are racing to capture every piece of data that consumers are willing to share.
So what are the implications for loyalty?
Well, first of all, there’s guaranteed to be a further increase in global regulation of data capture and management.
GDPR will continue to evolve, and brands need to maintain a laser focus on both the security of their data, as well as their privacy policies for loyalty programs.
Penalties for non-compliance will be swift and expensive.
Secondly, health and wellness trends show no signs of abating.
So loyalty programs in the convenience industry could add considerable value to members who have goals around the quality and category of foods that they purchase.
Vitality in South Africa is one favorite loyalty program of mine, which already has access to detailed data from partner supermarkets, and actually rewards customers for buying healthy food.
So why not build your loyalty program using a model that benefits consumers who take care of themselves?
Thirdly, from a technology perspective, it seems mainly Eastern countries are excited about the use of facial recognition in stores.
However, the Mindshare report mentions rumors that Whole Foods is planning hand recognition technology, something I’ve also written about in another article on driving loyalty in convenience stores in Korea, which is also available on the Liquid Barcodes website.
It’s definitely one to consider for loyalty teams alongside your technology teams, as we increasingly move away from plastic cards or even mobile apps to identify customers’ behavior and loyalty.
One key question that should be answered or thought about is really, I suppose, how much data are consumers willing to share?
And what Mindshare confirmed is that’s really as much as they see benefits for themselves.
So really, don’t ask for data unless you’re going to use it.
The third key trend for the UK market is an insatiable desire for quality content.
Now, clearly the demand for movie quality content is continuing to grow, with Netflix still one of the market leaders after an incredible 22 years in the business.
So this section of their trends report mainly focuses on who will win the content wars and how.
Perhaps an all-in-one service provider will package the content from the industry leaders, including Amazon Prime, Apple TV, or Netflix, or perhaps we will begin to outsource our media choices across those platforms, maybe to using content curation services.
Either way, it seems UK consumers are beginning to rethink how many subscriptions they are prepared to pay for in order to be entertained.
So what are the implications for loyalty?
Well, firstly, while I am certainly not directly in the entertainment business, this industry has clearly evolved from free content on traditional TV channels funded by advertising through to paid models for dramatically improved experience or product.
More and more loyalty programs in various industries, I believe, should be actively following this trend, considering whether to launch subscription programs for key categories such as coffee or breakfast or lunch specifically for convenience retailers.
In fact, though, whenever customers need to buy something frequently, there lies an opportunity for programs built around a fixed fee that guarantees recurring revenue from loyal customers.
Secondly, what content providers need is access to trusted brands with audiences at scale.
Many successful loyalty programs have actually not yet recognized the value of the audience they have to offer and the benefits that partnering with top content providers could provide.
Read the article on the Liquid Barcodes website about KFC in China if you want some inspiration on how they partnered with top online game providers in order to create one of the most successful loyalty programs in our industry.
A similar model between the giants of convenience retail and premium content providers could really be very compelling for members.
The fourth key UK trend is the challenge to choose.
As trust becomes one of the biggest challenges for brands to attract customers, established platforms like Amazon, eBay, and even social media brands will influence more and more buying decisions in the same way that search engines have done in the past.
And in fact, they may even begin to replace them.
Implications for Loyalty So while budgets to acquire members to loyalty programs in the past have often focused on Facebook and Google AdWords, opportunities abound to move beyond simply inviting members to join your loyalty program.
E-commerce websites in all industries are expensive to build and actually convince customers to visit, so why not begin selling your products within Instagram or Amazon?
Secondly, in countries where super apps exist, it makes sense for brands to ensure their business adopts those platforms for both loyalty and e-commerce.
I’ve also previously written an article about how brands like McDonald’s in China partner with the leading platforms that customers know and trust.
This trend is more dominant in the East than in the West, but it’s an important idea to understand to make sure your business is present on the leading platforms in your country.
And finally, advertising is evolving.
The final trend identified as a big issue centers around the increasingly cynical views of consumers around paid advertising.
Fake news and digital solutions that either interrupt the user’s experience or stalk them around the internet simply add to their concerns.
Advertising is evolving to include product placement in entertainment channels, plus an increasing focus on associating brands with the purpose.
So, what are those implications for loyalty?
Any loyalty program or brand project that is intended to show your customers that you care simply has to be authentic.
Consumers are evaluating how brands behave, not just how they say they behave.
Secondly, there is what they describe as a narrowing trust window, which has resulted in an increasing reliance on word of mouth marketing, whether informally by asking friends and family for recommendations, or more formally, through managing and incentivizing your customers to help build your reputation online.
In addition, the whole field of customer experience is highlighting to companies how consumers truly experience their services, showing how important it is to drive loyalty by focusing on excellence in everything that you do.
So in closing, we live in a complex and increasingly competitive world where the rate of change is definitely our biggest challenge.
I hope that understanding these trends will help you drive growth in your business in the year and decade to come.
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