The Future of Loyalty: Metaverse, AI, and Post-Pandemic Challenges
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- 7 min reading
The last few years have revolutionized our perception of customer relations. With the lingering effects of the Covid-19 pandemic and the looming threat of recession, we are now re-evaluating what brand loyalty means and how it can be achieved. To assess the industry condition, we can rely on reports like The Forrester Wave™: Loyalty Technology Solutions, Q1 2023 – an evaluation of the most significant loyalty software vendors (Comarch among them) on the market. While the Forrester report was meant to guide buyers considering their purchasing options in a technology marketplace, it can also be seen as an insight into the current loyalty landscape. The report release is an excellent opportunity for us to zero in on the industry’s dominant challenges and the solutions the best players in the game are using to tackle them. Shall we?
The importance of loyalty in times of crisis
Economic stability has a significant impact on how customers behave – and the past years haven’t made it easy on them. Due to the pandemic and soaring inflation, people are becoming more and more careful with their spending habits. According to Forrester’s July 2022 Consumer Energy Index And Retail Pulse Survey, the majority of online adults in the US (64%), the UK (59%), and France (55%) are anxious about the possibility of a recession* and are on the lookout for new ways to save money.
Hence, the increasing importance of discounts. Always efficient in attracting new customers, right now, promotions are even more crucial for drawing a new crowd – but they need to be thought-out and smartly distributed.
What does it mean?
First of all, companies should focus on giving discounts to clients who actually ‘deserve it’ – e.g., those who stay loyal to their brands and engage in long-term business with them, as they are the ones to invest in. Furthermore, discounts need to be offered adequately to each customer’s profile. By using AI for data analysis at the single customer level and recommendation engines to build individual discount promotions based on their needs, price sensitivity, and value to the company, you can cut out so-called ‘cherry pickers’ and invest in loyal customers. At the same time, allocating the promotional budget effectively to customers with the most significant ROI can aid you in protecting the brand’s margins and profits.
All of that is possible to achieve with the right loyalty technology that can centralize the company's promotional activities (discounts, coupons, points, etc.), simplify the omnichannel approach, and help you avoid situations where individual behaviors generate too many rewards. That leads to smaller margin erosion and can significantly lower the costs you spend on discounts while giving your customers the benefits they need in times of crisis.
Marketing without cookies
Financial upheaval is not the only challenge the marketing world has to face. With a cookieless future getting closer and closer (Google plans to stop using third-party cookies in Chrome by the end of 2024**), marketers are now trying to figure out the most efficient way to gather customer data. Considering how much digital marketing relies on information obtained from cookie tracking to identify customers and hit them with personalized offers, this new-found reality may pose a severe threat to advertisers.
How to deal with it?
Again, the answer lies in customer loyalty. Building strong client relations inspires the trust necessary for people to share information about themselves. And since as much as 92% of clients claim they will trade their personal data for loyalty points, creating engaging loyalty programs is the key to obtaining the most reliable zero-party data, which can later be used to optimize marketing activities.
What’s more, marketers can now rely on state-of-the-art AI tools that analyze acquired customer info. From streamlining data to predicting outcomes, new solutions take marketing to the next level and provide near-limitless outsources to use accumulated knowledge. Gone are the days of wasted data – right now, we have tools that can handle analysis and create personalized content alike.
But none of that can’t happen without trust and loyalty, imperative for gathering this info in the first place.
Will loyalty enter the metaverse?
Among all the challenges and trends surrounding customer loyalty, the metaverse reality may be the biggest yet. A vague-sounding concept that took the world by storm in 2021 when Mark Zuckerberg decided to rebrand Facebook to Meta is now on its way to revolutionize all web-based activities as we know them.
But what does metaverse actually mean? Well, that depends on whom you ask.
The metaverse definitions vary from video game settings to virtual workplaces – however, all of them regard online environments providing digital experiences as an alternative to reality accessed via VR, AR, PCs, game consoles, or even smartphones.
The potential of this virtual reality parallel to what we see in the actual world is really vast – it’s no surprise that key players have already jumped at the chance to tap it. From Zuckerberg’s Meta, through Microsoft and Apple, to Fortnite and Roblox, there are many iterations of a metaverse in work. Differing by purpose, functionality scope, tech required, and values, those platforms are fighting for supremacy in the market. But to achieve it, they have to attract users for the long haul.
And that can’t happen without loyalty.
Loyalty is crucial to building trust and creating value that will make members share all necessary metaverse data, the significance of which cannot be overestimated. In fact, the information obtained directly from clients is thought to become the primary currency of mainstream metaverse commerce. Why? Because zero-party data will be essential to design a space tailored to users’ wants, needs, interests, and preferences, which will ultimately determine its success or failure.
But the relationship between loyalty and metaverse is a two-way street. As much as loyalty is beneficial to the metaverse, a metaverse can aid loyalty, too. With the rise of digital ownership, blockchain, and NFTs, loyalty programs are already drawing from the potential of the metaverse. For example, brands like Balenciaga and Adidas have been investing in digital products that are becoming increasingly popular among the youngest generation of consumers. The Obsessar study – ‘The Metaverse Mindset: Consumer Shopping Insights’ – showed that nearly 75% of Gen-Z shoppers had purchased a digital item within a videogame, and as much as 60% think brands should sell their products on metaverse platforms***.
The research found that most participants perceived the virtual shopping experience as highly engaging, personalized, and immersive – all factors contributing to a boost in customer loyalty. And since the value of the metaverse in e-commerce is growing, marketers need to adapt their strategies to explore the options this new reality is presenting. Otherwise, they may miss out on countless opportunities to create a mesmerizing experience that takes customer engagement to a whole new level. While the territory is still uncharted, it offers excellent potential for implementing promotional activities in the virtual world and surpassing the physical barriers many find limiting.
New tomorrow of loyalty
Customer loyalty can grow in various directions, the course of which may be difficult to predict. We can safely assume that AI and the metaverse will play a crucial role in shaping the future of marketing. Still, given the accelerating development in these areas, it’s hard to be sure about their full impact.
This is yet another change in the world of marketing, for in recent years, loyalty has been evolving from building monetary value (points, discounts) to improving customer experience (recognition, experiential rewards, personalization. And now, because of the recession and rampant inflation, marketers need to go back to basics and rethink whether their loyalty strategy offers support for top customers and a sufficiently attractive Core Value Proposition based on financial benefit.
There’s still much uncertainty surrounding the subject – the only clear thing is that brands need to stay open to new solutions and be willing to incorporate them into ensuing promotional activities. The Forrester Wave™: Loyalty Technology Solutions, Q1 2023 report shows who has the best chance to stay on top of those dynamic changes. Recognized as one of the 12 most significant loyalty vendors on the market, Comarch is proud to be among companies that aptly find their ways in the new reality and provide tools suitable for modern loyalty challenges.
* https://www.forbes.com/sites/forrester/2022/11/03/how-will-consumer-behavior-change-in-2023/?sh=39850d71143f
** https://www.cookiebot.com/en/google-third-party-cookies/
*** https://obsessar.com/metaverse-consumer-survey/
