Loyalty schemes are not being used to their best advantage
The customer rewards cards that clutter wallets and clog key chains of many a shopper may soon be no more, as retailers move from physical to digital (read: mobile apps) forms of loyalty program member identification. It's a smart decision. Unfortunately, it's one of the only smart decisions retailers are making when it comes to customer loyalty schemes.
Loyalty program data can be enormously advantageous in other ways, such as helping a retailer perform market research, set pricing strategies, and decide whether and where to open new stores. "Retailers can get a better understanding about what brands matter to consumers," says Alvarez. "So if consumers are switching brands, or buying based on promotions, you can…drive the customer to your own label."
This article was provided with permission from Harvard Business School Working Knowledge.