#88: Loyalty Innovation in China with Lagardère Travel Retail

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.

Hello and welcome to episode 88 of let’s talk loyalty and today’s episode is my very first show focused on building loyalty with consumers in mainland China.

Lagardere Travel Retail is a company that has been in business for over 160 years, and actually operates almost 5,000 stores around the world, mainly in airports and railway stations.
50s

I’m joined by Adam McCarthy, chief information officer and Eudes Farbe, Chief Executive Officer for Legardere travel retail based in Shanghai.

In today’s interview, the gentleman shared their two extraordinary loyalty programs and in particular, the incredibly powerful new strategy they launched as a direct result of the pandemic, which affected their business so much last year, OOD fabric and Adam McCarthy. Welcome to let’s talk loyalty. Hello. Nice to be over here. Wonderful, great stuff. Lovely to chat to you both today. So we’re going to talk through a very exciting concept in loyalty and travel retail, particularly.
1m 36s
0

And I think what I’m particularly excited about in today’s show is, and the level of innovation, and I suppose the real evolution of the story that you’re going to tell us in terms of your loyalty program and more interestingly as well, some innovation in terms of video commerce. So at OOD, you’re the chief executive officer of the guards travel retail for North Asia. So at first and foremost, tell me, what is your favorite loyalty statistic?
2m 4s
1

It’s not a statistics per se. It’s more of a fact, but I was really impressed by the fact that a lot of trouble in businesses, I, including airlines and hotels, it found that during the height of the COVID crisis, which really brought their core business to their knees, they were able to leverage the value of their loyalty programs, either directly collect to continue communicating and selling to their customers through, through to grounding or indirectly. They were able to leverage that loyalty base financially I had to borrow against in order to keep their business afloat.
2m 47s
1

And I think that really shows the intrinsic value of these loyalty programs that have been built up over the years and is really highlights. The, that loyalty in itself is, is an asset.
3m 4s
2

It sure is absolutely well said, and you’re definitely preaching to the converted here. So we’re all super happy to, to hear, you know, another leading retail figure, really advocating for the loyalty concept. So that’s super exciting from my perspective. I’d love you just to explain like our dare and just as a company and really, I suppose how you got into the, the loyalty business, because I know it’s still a fairly young proposition from your perspective and Adam, obviously, you know, be interested to get your perspective along the way as well, in terms of your experience. I know you’ve always said Uber as the real visionary in terms of this entire concept, but I’m sure operationally, you’ve got plenty of stories to tell us as well.
3m 46s
2

So, so Udo, I’d love you just to explain that the travel retail business and that you operate in and what role loyalty plays within that.
3m 56s
1

Yes, of course our company like Electra retail is one of the leaders in our retail in probable locations, including airports, of course, but also a train stations and tourist sites. Our business covers all segments of travel retail, including duty free and luxury, but also news convenience, specialty, retail gifts, et cetera, and food and beverage. So we’re present in over 270 airports worldwide and on 750 train stations with a total of almost 500, Oh sorry, 5,000 stores.
4m 36s
2

Wow. That’s extraordinary. And I saw on your website as well. Oops. That turnover in 2020 was 2.3 billion Euro. So extraordinary business that, that you guys are operating worldwide. So where did the concept for a loyalty program come OOD? I know you have two loyalty programs, so, so when did you first think actually that’s something that we really should be doing?
4m 60s
1

I think we started in earnest I about three years ago where we realized that a lot of our customers were actually frequent travelers and we’re coming to the airport. I, you know, at least once a month, but for some of them even, even more frequently, I think the second reason behind it is our network was growing rapidly. We now have a presence in over 25 airports in, in mainland China. And of course we, we know that if people take the plane through an airport, it means that they’re landing and another on and possibly returning from that same airport.
5m 40s
1

So we, we really, we really saw the opportunity to connect with our customers on their journey, whether it be outbound or inbound on end build an affinity and built the loyalty of these customers who are frequent travelers and frequent shoppers at the airport.
6m 1s
2

Yeah. Yeah. Fantastic. And Adam, from your perspective, I’m sure you were already a very busy man and, you know, making sure all of these stores operate very efficiently from a technology perspective. So what was your initial view, I suppose, of the concept of a loyalty program for the business? Is it something that you were excited about you understood the potential of, or, or, or what was your view at the time?
6m 26s
3

I understood the potential. I felt that it was kind of becoming a requirement to be honest. So it was, and I were extremely well aligned. What I didn’t fully anticipate was the complexity that spiraled into place very quickly. And you need to have somebody to keep it streamline. Yeah. And I, and I think also I wasn’t aware of just how quickly you go from, you know, we need a loyalty program to, so what we have one, right. And I think there’s a lot of undifferentiated, you know, probably low yielding in terms of value programs. And if you don’t have someone who’s constantly pushing on how to monetize it and make it actually viable to the members, to the customers, to the business, that was stuff that I didn’t anticipate.
7m 7s
3

But again, thankfully OOD and the team has been very good at always keeping strong sponsorship and in a strong commercial focus.
7m 15s
2

Absolutely. Yes. Yeah. And they are very much magic words, Adam, from my perspective, I’ve always said I’m a very commercial market tier. So even before I worked in loyalty programs, you know, I never really understood how you could keep spending without being able to track the return. So, so absolutely critical to make sure we have that commercial perspective. And yes, it’s also just, I’m smiling that you acknowledged the complexity, because I think from my perspective, a lot of the time what happens is, you know, people do have perhaps a vision like Uber and say, great, yeah, a loyalty program will add value to the business. And perhaps under-invest in terms of, you know, whether it’s the technology or the people, or literally, you know, running these programs.
7m 57s
2

And I remember when we spoke the last time you told me that not too long ago, the, the customer database was on a spreadsheet. So, you know, it has taken a time to, to formalize getting it into a structured proposition. So yeah. How was that whole journey in terms of transitioning from nothing to, I think you’ve said you have what over a million members now, is it
8m 21s
1

Yes. A combined membership of 1.6 million active members. We started, we started very, very basic on indeed for, for quite a while at the beginning. And we were just using an Excel sheet compile and keep track of our members visits and spends, and that we we’ve been through several phases of, of the program at first, it was just on, you know, a basic recognition tool. So when people came back and we able to, to recognize them, and over time, we were able to personalize the service and also getting recognition for their, for their loyalty on after, after a year or two, I guess we decided to roll out a more sophisticated software platform to have, you know, the basic features of loyalty, including our points earned burn on tears.
9m 22s
1

It’s sad, but it was still a relatively basic concept with, you know, relatively simple software on and really like a relatively, I mean, sorry, unintended Jeanette mechanism, but we, but we bought, we, we went through, we went through these, these phases and I think for us, like the biggest accelerator was the COVID crisis where a traffic in our airports on, you know, dropped quickly and dramatically just about a year ago.
10m 4s
1

We, we saw that a loyalty program could be a tool to, you know, continue maintaining contact with our customers and continue sales, even though you weren’t able to travel and unable to come to our stores. And I think like, like, you know, this time of our crisis, I really opened our eyes to the possibilities. We also saw a lot of changes in the, in the market. So instead of just having, you know, a loyalty program with a point securely waiting and, you know, people getting their points, but not really being use of them, we need the program evolved in two directions.
10m 44s
1

One, I that’s, you know, a direction that’s more sales focused, including on latching onto the trend of my wife stream and on other, you know, online commerce techniques second, which is what I would call that social loyalty where instead of, you know, the loyalty program, just being, it’s more of a club where, you know, members are not only members of all of the programs, but they also on part of a club of people with similar interests on end, make it to make it more interactive and then well social.
11m 26s
1

So ultimately we want people to on of course through loyalty program shop with us and shop with us more often, but we also hope that our customers can interact not only with our team, but also between each other and hopefully even, you know, build new friendships or acquaintances and getting more out of I’m shopping, you know, beyond just spending, actually having a good time on being part of our program and making new connections.
11m 60s
2

Yeah. Yeah. And Adam, I can see you nodding as well. And, and I guess what I’m not familiar with is really, I suppose, loyalty in China, just in general, would you guys say that there is this level of sophistication that I maybe would associate Chinese consumers with being a digitally savvy and that’s global reputation for interacting on Weechat for, for your entire life. Would you guys say that the same concept of sophistication applies for loyalty concepts as well? Like I don’t even know what other big loyalty programs in China might be well-known or well-respected
12m 37s
1

Definitely, I think, yeah, of course, you’re right. I, Chinese consumers are very digitally savvy and to spend a lot of time on social social networks or on their, on apps on their phone. But I think I, beyond that, I, there is now a fusion of, you know, shopping in a social media, like we can’t see in any other market. So whether it be, you know, what they call social buying, where people get together to, to buy a specific item from a specific specific vendor or even a livestream, which is I, you know, like I, I modernized version of the home shopping at work, but that’s much more interactive where people can interact with the host.
13m 28s
1

People can also interact with each other, can, you know, ask questions, comment, make jokes, et cetera, on it’s sky. It’s not only shopping, it’s also entertainment. And I think the loyalty aspect of it comes naturally because, you know, you’re having a good time. You’re you have access to products you like and doing it at the same time as all these other people who, you know, on some level share the same interests as you. So it’s not, it’s not only consumption. It’s also entertainment on. And I think there’s, there’s great value be created for everybody.
14m 9s
2

Yeah. That’s a really big insight today because I often think, you know, you know, the whole online or sorry, TV shopping in the past was a bit of a guilty pleasure of mine purely because, well, partly I suppose from a professional point of view, I was intrigued as to the, the sales techniques that were being employed and how compelling I found them. And generally I really didn’t need the stuff. And I was quite restrained. I will say, I didn’t go to go too crazy, but I admired the presentation skills and the fact that an entire sales channel could exist in a TV format. And as I was preparing for today, in fact, some of the insights that I came across was exactly, you said, oops, you know, the, the TV shopping I’ll call it or, or online shopping in video format is very much more engaging than e-commerce, which just feels so transactional most of the time, but yet it’s much more accessible, particularly in COVID times than the high street or particularly obviously travel retail.
15m 11s
2

So I do think it’s a genius insight and I’ve seen it called maybe the third way to shop. So, and I know Adam, you kind of highlighted a couple of big differences in terms of, you know, how your format, particularly for Lagardere travel retail, the live shopping as distinct from the TV shopping experiences of the past. So, so how would you distinguish and how it’s evolved over the last, I guess it must be 20 years now.
15m 39s
3

Well, I mean, it’s really simple. It’s, it’s simply more interactive. It’s faster, it’s more easily consumable. But what I was just thinking about as OOD was describing the customer difference in China and what you were talking about. I think the overarching theme, whether it’s streaming or not, or other aspects of loyalty program is particularly in China, there’s much more of a sense of an ecosystem. And I think that’s probably more, more relevant because there’s multiple places where you can stream and buy stuff online, particularly in China. But what it really focuses on is quite true, particularly with Chinese customers, they get that the whole thing’s in experience.
16m 19s
3

They understand that, you know, yes, there’s commercial drivers that facilitate that experience, but the social aspect, the, the engagement, the thing I was thinking about was before COVID you actually had a couple of customer appreciation dinners for like the VIP members and the very first one was quite small, and that was an in-person private shopping experience. But as the loyalty program grew, I remember the next dinner we had went from, I think it was like maybe 10 people, 15 people at the table. I think the next dinner had, you know, at least like 150 or more. And it became, it actually became a really useful networking event. So the program was already being used to add value in terms of the shopping experience to creating, engaging customer appreciation.
17m 7s
3

But it also became a useful way as had said for like-minded and similarly disposition people to further connect with each other through a common venue in place. And I think that sort of appreciation of an ecosystem is probably more important. And on the streaming again, it’s actually quite simple, I’d say it’s it, it’s very easy to just in real time, you know, always be able to go to the point in time. I think old TV streaming, you, you had to wait until a certain hour, you know, if you wanted to buy like hats or jewelry or whatever, you had to wait till 11 o’clock at night, and then the good deal didn’t show up fast enough. But in, in streaming, you’ve got real time. You’ve got the ability to go back, right? You’ve got the ability to engage on other channels, Omni channel outside
17m 50s
2

Of just the stream itself. And I think that high availability and you’re connecting, this is probably the biggest differentiator from the old time. Yeah, for sure. Absolutely. Yeah. My goodness. So many questions coming to mind, even the dinners that you mentioned, Adam, I could absolutely imagine particularly high profile shoppers and from your VIP program, particularly shopping in luxury boutiques, for example, and connecting them over a dinner. And that’s a very special experience and very aspirational. So I would totally, you know, I could imagine being one of those people that would want to be invited and aspire to join an event like that. And, and the ecosystem point out them is a very good one as well, because again, what I’m seeing is happening in China is this understanding, as you said, the entertainment value, the connection and the humanity.
18m 42s
2

So I think we talked before that, you know, QVC was very much a one way thing and you were being sold to the whole time. And as I said, I would enjoy that experience, but I think consumers in this day and age, and maybe China is more advanced, but I’m not sure, I think it’s just a human thing where we actually want to connect with people and maybe have a conversation on the side with, you know, well, what do you think that perfume, you know, if you tried it or, you know, I can just imagine the depth of connection that you’re facilitating. So I’d love to just talk a bit more, maybe if you would explain the live streaming concept. I think you am explained to me the previous time that obviously the traffic fell through the floor in terms of them that the travel businesses, we all know, and China was the first place again, that was so badly affected.
19m 28s
2

I do think you also mentioned by the way, the traffic is almost back to where it was before the pandemic. So it almost feels like in a full 12 months circle, you’ve come, you know, literally come back to your starting point. Is, is that what what’s happening right now?
19m 42s
1

Oh, yes. I’d say the, our live streaming really started on because we had so many people idle, so many stores open in airports whereby we have no traffic. So it really started out in necessity. And we, we experimented with different formats. I, we even, you know, hired external KOMS to be the hosts, et cetera. But what we found over time is first, our customers were very responsive, could be on to be experienced. And so people were, you know, prevented from traveling or prevented from even leaving the house.
20m 26s
1

But that doesn’t mean that they didn’t want to shop. And it also meant that they had more time on their hands than ever before. We also, we really found out that actually on what our customers are enjoyed and valued was the genuine aspect of the live stream and interacting with our sales staff on who are experts in the product on, on a, you know, a more intimate level. So I think people weren’t on people weren’t so concerned about, about the professionalism of the production or warrants or concerned about talking with famous people.
21m 6s
1

They were more, they were more into, I just like the genuine aspect of it on end. Like the interactivity meaning Oh, live stream is it’s not scripted, it’s improvised. And you know, customers can be part of the part of the show. So to speak on the, we, the live stream unfolds. I is I very much driven by, by the audience. And a lot of it is just off the cuff and I kind of made up as I, as we go. So I think, I think a lot of people are actually enjoying the fact that it’s not, it’s not scripted.
21m 48s
1

It’s not, pre-produced, it’s very much an open platform and I’m, you know, so phrases can come up, but they are not manufactured. They’re just natural. And, you know, just, yeah, just very frequently. And, and yeah, as I said, genuine,
22m 9s
2

Wonderful. Wow. And I really liked that idea of unfolding with the audience. I hadn’t understood, understood that part of it. And what this whole concept then of, as you said, you mentioned KOL is actually food. Is that a term for professional presenters? That what you meant when you initially had an external person coming in?
22m 30s
1

Oh, he wrote there’s yes. There’s there’s many, many different types of KOL has a, essentially what we call KOL of people who managed to make a living, not by having a natural job, but by appearing online and having a fan base and elaborate thing that are following it to the cell. So there’s, there’s, there’s a lot of people who are, you know, I have audiences of varying sizes, but who really do not true elliptical. And initially we, so we work with some of these, you know, like small celebrities who had their, who had their, their big foliage.
23m 11s
1

We realized that a lot of people on our team were actually, you know, on, I quite natural. I find talented at building this disconnection with, with people. So it’s on, ultimately we, we focus more on like, you know, promoting our own internal care role, so to speak and, you know, giving everybody in our team a chance to be a star on and build up their own on, I thought I, you know, followers on their own audience. So I think it’s that that’s been like, one of the big learnings is like, you don’t need a, you don’t need much to become famous.
23m 56s
1

You just need to be, you know, quick thinking witty on and, you know, appealing. And I’m that builds loyalty are quite quickly
24m 8s
2

Wonderful. Yes. Yeah. So influencers, I guess, is the term that I would probably have been familiar with. So, so really good to know how, how big that industry is in China. Again, I know it by reputation, but good to understand the terminology. And the other thing you had explained to me as well before we came on air was the, the transition you made from and big open platforms such as the Chinese version of tick-tock into an, a more closed mini program on chest, which is exclusively for your loyalty program members. And I know you do have two versions of your loyalty program, but that sounded like it was an important strategic decision as well for you.
24m 48s
1

I guess I totally, because I you’re right to point out, we have two programs. One is focused on, on luxury brands. I am not luxury customer. And the other one is on more meant to be more mass market on and covers are specialty retail and food and beverage on is specifically for luxury. The reason why we shifted a, become a members only on a closed environment is because our customers ultimately want our personalized attention. So it’s not only about saving money. It’s not only about I, you know, earning points and remove them.
25m 30s
1

It’s really about having on exciting and one-on-one interactions with our teams. Not, not, not one of our customers is the same as the, as the other. So in order to be able to provide this personalized experience, we decided to build our own mini program, which then also allows us to reach out to customers at different times in different forms. And also to, I grouped them by areas of interest or by location or by brands. They like it’s. And Adam was mentioning the, the, the big events that we had on in the past.
26m 12s
1

We, we still have those, but we’ve also created much smaller, more intimate events, you know, maybe only 15 or 20 people, but that we bring together because we think they will actually enjoy their company on each other’s company rather. And, you know, make it more of a, again, like more of a social thing, rather than on kind of like a catch all on events that appeals to everybody. So it’s, it’s been on it again, you know, what your customers by definition have money to spend, but what the value is their time on and what they value is the, the personalization and service.
26m 57s
1

So we thought, you know, by, by implementing our own mini program, we were then in a good position to really better segment the way we on, we talked to customers. And also that allows us to be very quick and innovative on it’s a platform that we control. So when we decide to, you know, add a feature or change a feature on, we can, we can do it very quickly on, and I’m also, you know, like testing new ideas. I’m, we’re not, we’re not the way.
27m 29s
2

Yeah. And I was just thinking about the infrastructure, particularly, as you mentioned, that you started in a bootlegged fashion, I know in store, as you said, with your own staff and learning by doing, and then professionalized all the way up. So Adam, from your perspective, have you had to add a lot more support in terms of just particularly, I suppose, on the live streaming side, or even just on the, on the, the, the loyalty membership itself,
27m 57s
3

A multifaceted question, I would say purely from infrastructure on the, on the, on the side where the actual work gets done, that’s showing happens. I think what’s nice about Lagardere North Asia is there is a very, very strong team spirit. So people are always willing to put on another hat. The success of the company is very important to them and deeply meaningful. So that, that part didn’t really require significant additional investment, although it has grown just so that we can make sure the operation from the infrastructure side, I’d say the first platform we chose to work with, there were a lot of lessons learned there and especially about how even infrastructure costs can spiral out of control.
28m 42s
3

Third-party costs, can spiral out of control, build your own versus, you know, lease from somebody else, just tons and tons of things. I think, I think we’ve learned painfully from those lessons and now we’ve kind of hit a, a good middle ground on some of those things, using a more established platform that has multiple members. And that for example, can guarantee responsiveness of time, et cetera. I’d say in terms of, on the vendors, we’ve been quite smart about decoupling each part of the technology, so that if one vendor isn’t doing a good job, or we need to enhance something, it doesn’t, you know, take down the entire solution.
29m 24s
3

And then I’d like to say there’s more cost control, but I think that Uber was just kind enough to accept the pain that the first run created. And he just, hasn’t cramped, cramped down too hard on, on the second round. But I definitely think we’ve kept the spiraling from continuing. Now. We’ve got a pretty solid baseline for, I’d say almost low variable, nearly fixed costs of operation, and that’s helpful on the technology side.
29m 52s
2

Okay. Okay, good. Yeah. So what would, what would you say is next dude, in terms of what is your vision for, let’s say even the next 12 months, because it feels like 12 months, particularly in China and particularly post pandemic is, is a very long time. So you’ve, you’ve obviously excelled. I know you’re always already doubled daily, for example, with the live streaming. And you mentioned anything from maybe a hundred to a couple of thousand people attending those and those online live events. So is that something you see that just as going to continue to scale and, or, or any further evolution that you have already in mind?
30m 31s
1

I guess not really. I think we have two objectives over the next few months. One is for a Buddha Judaics luxury program is to continue enhancing the value of the program, moving more towards what I was talking about with the social Blinky aspect. So could we actually, I to give our customers the chance to build a social and physical connections on, and also really enhancing the value of the program beyond just the monetary aspects or the, you know, quite redemption aspect of it. So there’s, I think like our, our key advantage in the space is that we really have both the online and the offline aspect of aspects of our business, which we can really leverage on.
31m 22s
1

So people have an exceptional experience when they are at the airport, you know, where they, they get to use RDI knowledges or interact with our personal shoppers or when they are, you know, at home. So they’re not working. We can still reach out to them and give them personalized service on end on, you know, like inquire about anything they want or need and maintain that connection. And the next time they travel. So that’s, that’s something that I we’ll, we’ll keep pursuing for the non to habit to really make our loyalty programs stand out and create more value for our customers and brand partners.
32m 4s
1

Then on our other program, I weigh, which is, which covers our, you know, bookstores, convenience stores, food and beverage outlets. The, the objective is really to accelerate the growth of the program. I, in order to have a significantly bigger membership right now, it’s about a million members. We want to quickly get the 2 million. I like the near term goal is to get the 5 million in order to have a membership base that is strong enough and active enough to be able build partnerships with on with third party companies, whether it be airlines or banks, et cetera, these two loyalty programs are going into somewhat different directions, but they actually also overlap.
32m 56s
1

So we have a lot of customers that are members of both because, you know, people who like laundry goods also eat people who, you know, like wait books also buy, I buy cosmetics. So there’s so well, we’re developing these two programs in different directions. We also want to create more, more connections between the two in order to be able to have a more comprehensive approach to meeting on, on members’ needs and desires.
33m 28s
2

Yeah. Yeah. And often on this show, we would, we would talk about the, the evolution from transactional loyalty to emotional loyalty. And it’s rare that we have concrete examples of exactly how you do that. So, so just want to acknowledge that you’re doing extraordinary work, just bringing the humanity, I think back into commerce, because I do think there’s a risk of, you know, just becoming very commercially focused. And I think particularly if there isn’t an understanding at the very top levels of a company of the importance of, you know, how the individual experiences, the loyalty program, I think it can go too far in one direction, but I can see you’re absolutely building that, that humanity piece.
34m 10s
2

And what I wanted to ask you actually, just as you were talking Uber, and even before about your and your staff and, you know, Adam mentioned the, the enjoyment and team spirit that you have there with guard. And would you say like that you’re increasing even their loyalty to you as employees because they’re getting to build their personal brands, they’re getting to be these mini celebrities. So, so I can just see that that being, becoming an even more extraordinary place to work because of the, the visibility they’re getting and how well they get to do their job in a very innovative way.
34m 44s
1

Well, it’s true. I mean, there’s, of course we’re a retail company, so I haven’t met the main measure of success is I is sales, but I think most importantly, it’s given to everybody on our team, the opportunity to take on new responsibilities, I take on new roles and experiment. And I think the, the, the good thing about LightStream is that it’s live right. So I, if you make Mika mistake or embarrass yourself, well, it’s quickly forgotten and you don’t re move on, move on to the next thing. So I think like our team has been on, has been very proactive in the, I, you know, thinking about new ideas, new models on, and just the new ways I to impress our customers.
35m 38s
1

And I think it’s people are grateful when they have an opportunity to express themselves and you don’t contribute to the conversation instead of just following orders or, you know, waiting for a script. So I think in, in that respect, it’s really given a lot of people on our team, an opportunity to, to shine on, and a lot of people who are, you know, natural extroverts to gain, to gain a bigger audience. So I think, yes, it’s, it’s definitely made us a better place to work because it’s because it’s fun. And also because it’s obviously going to additional, you know, earning opportunity for our team members,
36m 24s
2

For sure. And, and I really think, you know, there’s lessons there for, for particularly anyone in retail. Oops. You know, I mean, they’re just, and I don’t know if it’s limited to China. I really think, again, as, you know, a lot of people listening to this show are, are, you know, all over the world, clearly I’m United States UK. And I do think that there’s a big insights that you’re sharing that could be, you know, maybe the silver lining for so many people who are struggling in their retail businesses and don’t have opportunities again, to, to have that in-person retail experience. So I definitely,
36m 59s
1

Yeah, it’s true in China. Obviously we have the advantage of having these social media platforms that have, you know, huge memberships, you know, a technology that’s already made to reach out to these people, I think yes, between the, you know, traditional brick and mortar brick and mortar retail, which obviously is, you know, like suffering and even more so because of the COVID crisis on one hand and just the, on I, you know, like anonymous e-commerce, I think there’s, there’s a, you know, a third way, which is, I guess you could call it people, our e-commerce where we’re on.
37m 41s
1

You have the benefits of the, you know, convenience and be always on always available and on just endless choice of e-commerce, but at the same time injecting a bit of the humanity of on offline retail back into it, because ultimately, you know, like e-commerce, it’s, yes, it’s convenient, it’s fast and it’s cheap, but it’s also lonely on the end, some extent, you know, not that exciting. So I think there’s, there’s definitely, you know, regardless of the technology, I require my mental limitations, there’s definitely a way to leverage, you know, the human interactions that exists in the offline retail.
38m 28s
1

And, you know, like I add like e-commerce layer to that. So I think it’s, it’s not about, it’s not just about, you know, thinking about, you know, waiting can have like the right technology in place. It’s really, it’s really, you know, thinking of my harder I’ll leverage what you already have the customer is that you already know, and to have a more, a more regular on my interaction with them, I through, through the medium of technology.
39m 2s
2

Totally, totally. And you’re right, dude, to 2:00 AM, you know, I suppose really highlights that this is so much easier in theory, and because you have the we-chat platform available, my, you know, big regret is that unfortunately I haven’t been able to get onto each house being outside of China and not having any, any connections to do that and certainly easily, but even just as a, as an aside, I will be doing a show. And in a couple of weeks time just talking about WhatsApp and, you know, its potential as it starts to move into a more, you know, commerce as well on that, you know, clearly a purely a messaging platform at the moment, both, you know, evolving very quickly as we know. And I was actually just in a luxury retailer myself last weekend.
39m 45s
2

And I was amazed when I did show something, an interest in something the sales staff immediately asked for my WhatsApp and that hasn’t happened in any other retail environment as yet. And I was impressed. And again, the salesperson followed up and sent me stuff that I loved. So I definitely think even though the technology globally isn’t as sophisticated as the ecosystem you have there, we definitely still have potential at least to go where the customers are. You know,
40m 12s
1

I think of course the advantage of we-chat is that it has the user base and it allows many programs which allow you to build up like a full, a full for each branch e-commerce website, including payments, et cetera. But to your point in the markets where we chat penetration is lower and WhatsApp is more popular, such as for example, the Hong Kong, we’re able to, we’re able to achieve the same objectives through WhatsApp groups and through one-on-one interactions through WhatsApp. Of course, it’s more fiddly, it’s more manual. Like the payment has to be done separately, but the, but the idea and the end result are ultimately
40m 58s
2

Absolutely. Yeah. And as you said, actually, you know, in its simplest form, we were all here, you know, in terms of sales, you know, so, you know, with the best will in the world, engagement is, is not purely for its own sake. It is to make sure that we are building viable businesses. So yes, it might be a bit clunky behind the scenes for us at the moment on our WhatsApp platforms, but, but ultimately it’s getting to what the consumer needs and that’s the most important thing. So I’m super happy that we’ve had such an extensive conversation about building loyal behavior. And I’ve often said on the show, the reason I call it let’s talk loyalty or not. Let’s talk loyalty programs is exactly for these kinds of conversations, because what I’m hearing is that you’re giving people something extraordinary that they add that they want to connect with.
41m 43s
2

They want to be customers of yours. And so from my side, it really is a fascinating study and I’ll be watching it super closely. Is there anything else and maybe Adam from your side before we wrap up that you want to say, and then Uber as well, if you would want to have any kind of closing comments.
42m 1s
3

I think when we talked earlier, the thing, the thing that I, if I had, if I was listening to this program and I wanted to take away, I think it’s about sponsorship and it’s about commitment to the sponsorship. And I think a lot of the stuff I’ve learned from seeing and being part of a loyalty program is it’s one thing to have an idea. It’s one thing to have a vision, right? It’s one thing to be willing to invest money, but it doesn’t stop there. Right? You have to have that sponsor, who’s willing and able to stay involved and connected driving it forward. Even when it looks like you just lose all the money. And if the program looks like a pretty boring, I’ll just spend some money, get some points, maybe use them.
42m 41s
3

And there’s, if there’s nothing differentiated, you’re probably not going to have a good outcome. So you’ve got to constantly find what are these new mechanisms to connect with the customer and do something different. And I would say that if you start doing the program or your, your program or your loyalty system correctly, it should probably make you start looking at all the other ones you encounter with, with a more critical eye, because I’ll be honest. The biggest thing I’ve noticed from, from this is, you know, you and I both used to like to travel a lot and, and look, I’m, I’m, I’m very flattered and gracious that, you know, some of the frequent flyer programs and accommodation programs have done things like maintain your status because you can’t help not maintain it, et cetera.
43m 26s
3

But I have started thinking, man, why don’t you guys try to connect with me? Why don’t you try to, you know, sell me something. I mean, it sounds weird, but why don’t you see how well it works? You think, man, it’d be nice if some of the hotels would say, Hey, by the way, we’ve had these shops, there’s some stuff we want to do. It might appeal to you because what we know about you, and that’s the thing I would say, if you’re, if you’re a little different was done, right, you should really start making you cast a more critical eye on all the other programs you work with.
43m 51s
2

Yes. And, and rightly so, Adam, like, I totally, you know, I’m the biggest critic when it comes to loyalty programs and I’ve, I’ve again, talked about it before, particularly on big occasions, you know, like, how am I treated on particular key occasions during the year? So they’re missing more opportunities than they’re taking in my certainly experience. So, so thank you for that, Adam and OOD final parting comments from your side.
44m 15s
1

I’d just like to say thank you for the opportunity to, to share. And I think you’re, you’re doing something great here because loyalty used to be somewhat of a, an afterthought or I, you know, just going to add on to a business model that was working. But whereas now I think it’s shifting towards being the business model and its own. And it’s all about, you know, maximizing customer engagement, whether or not they’re buying that day. And I think it’s, it’s a relatively novel concept and there’s a lot of things that are still, you know, work in progress I, or that need to be fleshed out on, or there’s a lot of experimentation that needs to be done on.
45m 1s
1

And I ultimately the, you know, like people are focusing on this or people on taking time to talk about it, but think about it is what makes the whole thing of next. So I think those we’re just really at the beginning of this, I thinking of loyalty, not as the program or as a, a, you know, a bank of points, but really a way of doing business on and on, you know, building commerce. So I think it’s a very exciting space. And instead of just being a part of the business, it can really become the core of the business on which, you know, go else companies to then be successful and long lasting, like never before
45m 54s
0

Well said, dude, that is exactly music to my ears. I’m going to add to quote you on that loyalty as a way of doing business. So certainly not just a program. So thank you so much for investing both of your time. As you know, this, this whole show is intended to be educational and inspirational, and both of you have contributed extraordinary insights today. So OOD fabric, chief executive officer for luggage travel and Adam McCarthy, chief information officer, thank you so much for let’s talk loyalty. Thank you. This show is sponsored by The Wise Marketeer, the world’s most popular source of loyalty marketing news, insights, and research.
46m 37s
0

The Wise Marketeer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 170 executives in 20 countries as Certified Loyalty Marketing professionals. For more information, check out thewisemarketeer.com and loyaltyacademy.org. Paula Thomas (43:44): Thanks so much for listening to this episode of Let’s Talk Loyalty. If you’d like me to send you the latest show each week, simply sign up for the show newsletter on letstalkloyalty.com and I’ll send you the latest episode to your inbox, every Thursday. Or, just head to your favorite podcast platform, find Let’s Talk Loyalty, and subscribe. Of course, I’d love your feedback and reviews, and thanks again for supporting the show.