In September of last year, we spoke with Tim Mason, CEO of Eagle Eye and architect of the leading UK supermarket chain Tesco’s Clubcard program, about the role of technology in modern retail loyalty programs and how loyalty marketers can succeed in today’s digitally driven environment.
Following that conversation with Tim on the Customerland podcast, we wanted to hear Tim’s thoughts about what’s in store for retail marketing in 2024 and his outlook on the state of loyalty. Below is a summary of our discussion:
TheCustomer: Before we dive into the retail marketing and loyalty outlook for 2024, I’d like to get your thoughts on some of the industry developments and news that took place in 2023. What stands out as having the most impact on customer experience and retail loyalty overall?
Tim Mason: It’s no great secret that inflation hit shoppers hard in the past year, with research from NIQ revealing that 93% of consumers consider affordability when choosing their brands. Our own research found that 58% of consumers have dialled back on discretionary spending, such as eating and drinking out.
But it’s a lazy conclusion to say that consumers are exclusively looking for the lowest possible price in this uncertain economic environment. The NIQ study I mentioned earlier found that 90% of shoppers would choose a brand if they had a memorable experience with that brand, and 86% of shoppers are willing to pay more for a great customer experience.
Perhaps most importantly, it was a year that I felt more retailers were thinking deeply about-and with some putting into practice-the available technologies that could contribute to an improved customer experience. Whether that is AI, machine learning, or automation to build an immersive retail experience, brands are going the extra mile to deliver a next-generation experience.
It’s easy to draw a simplistic conclusion that this fancy technology is purely there to wow shoppers. But really, it’s there to fulfill a more basic function: giving customers what they want when they want it.
TheCustomer: Do you envision primarily a continuation of these trends, or do you also foresee some game changers on the horizon for the year ahead?
Tim Mason: Honestly, I see both. But one thing we can be sure of is that these trends will be driven by customer-centricity.
Today’s consumers expect more from the brands they shop with. They demand that their favorite brands focus on delivering higher value and are unwilling to accept anything less. To put this into perspective, I read a great study from PwC that said 65% of U.S. consumers believe a positive customer experience is more influential than great advertising.
And this is a trend that has been reflected in Eagle Eye’s research and the second edition of my book, Omnichannel Retail: How to Build Winning Stores in a Digital World.
As for 2024, I’m looking at three trends that will change the game.
The first is AI powering advanced personalization at scale. I expect this emerging technology to support retailers in properly harnessing their available data to move away from mass-produced offers. According to the Boston Consulting Group, retailers already doing this are seeing a minimum 25% increase in revenue.
The second is something I’ve discussed before: unifying the in-store and online retail experiences. This is where Marketing in the Moment and “phone out” shopping comes into play. Retailers that can successfully offer an individualized customer experience while simultaneously providing omnichannel personalization will gain a massive edge in 2024 and beyond.
Finally, siloing has long been one of the deadly sins of the grocery industry, and I expect to see concrete steps to break down these walls to achieve authentic data integration, converged content, and a higher standard of personalization.
Ultimately, I believe the most essential part of improving the shopping experience will be retailers acquiring more holistic views of the shoppers they serve, which will support them in delivering relevant, timely, and personalized offers.
TheCustomer: What brands are leading the way in these areas, and what can others learn from them, especially when it comes to elevating the customer experience?
Tim Mason: Countless brands have upped their games this year. But one that stands out to me in terms of their “phone out” experience is Nike.
With their app, you can scan a QR code to summon shoes in your size to try on. They’ve also integrated payment options within their mobile app alongside real-time digital content and communications to connect the overall brand and the in-store experience.
On the technology side, I have to cite the newest member of the Eagle Eye Group, the SaaS company Untie Nots. In just seven years, their solutions have harnessed AI to deliver gamified experiences to 60% of the French grocery retail market. Their success echoes Eagle Eye’s research, which found that 66% of consumers are receptive to gamification within loyalty programs. It’s one of the reasons why we acquired the company in January 2023.
TheCustomer: Speaking of your colleagues at Untie Nots, a Chief AI Officer was just announced. This looks to be the first such appointment within the Eagle Eye Group. What does this signal for the direction of the company and your work with customers moving forward? How much should we be reading into this appointment?
Tim Mason: Appointing a Chief AI Officer makes sense in today’s retail landscape, so bringing Jean-Matthieu Schertzer on board is part of Eagle Eye’s natural progression.
Whether struggling with personalization, the mobile makeover, or maximizing their data assets, retailers need solutions to elevate the retail experience going into 2024. Predictive and generative AI are set to add $22.1 trillion to the global economy, so appointing a designated Chief AI Officer isn’t a luxury but a necessity.
TheCustomer: We’ve talked a lot about the role and utility of technology in loyalty and customer strategy for 2024. Do you think brands are losing sight of good old-fashioned customer service in the process?
Tim Mason: With any new technology, there’s always the thought that it can replace a traditional principle. But I don’t believe that, nor do studies show that this happens as often as we fear. Fundamentals are fundamentals; 60% of business leaders say high-quality customer service improves retention, and most consumers believe it’s critical to the retail experience.
In all aspects of my life, I try to ensure that I follow The Golden Rule: treating people the way you’d like to be treated. , This is one human principle that I think nearly all of us can agree on, but it is also at the very heart of personalization and is therefore central to absolutely everything we do at Eagle Eye. Great things happen when businesses apply Golden Rule thinking to their customer strategy and in 2024, retailers should be thinking about how they can harness technology to better adhere to it.
Retailers who think they can offload the entire business of customer service to technology are wrong. That’s not to say that tech-powered innovations like chatbots don’t have their place. Studies have shown customers prefer them for simple, instant answers while preferring humans for more complex issues.
In other words, a balance can and should be struck, with the central idea being that exceptional customer service means treating people as they’d like to be treated.
TheCustomer: This is a great reminder to consider, especially in today’s marketplace. Aside from following “The Golden Rule”, what’s the most valuable piece of advice you have for marketers and loyalty program managers heading into the new year?
Tim Mason: The nature of loyalty is changing. There’s no getting away from that.
Implementing a cutting-edge initiative today will only take you so far because the landscape will be different three years from now. Based on my industry experiences, the most successful retailers and loyalty programs come from those brands that have created an authentic culture of loyalty.
What do I mean by this?
Culture eats strategy for breakfast 100% of the time. Managers who create a winning culture are already halfway to implementing strategy after strategy that consistently delivers results. Remember that your team is the thing that creates the value. You will struggle to remain relevant if you don’t have a culture that can contribute to that.
This isn’t a buzzword that has popped up recently. It is something that has always existed. It’s why when I was involved in releasing the Tesco Clubcard loyalty program in the 1990s, I worked to build the right culture among the team behind it. And I know that culture remains in place today because of Clubcard’s continuing success within the UK grocery scene.
Retailers of all sizes that can create a loyalty culture infused with their specific mission will earn and keep customer trust. And that applies in 2024 as much as it will in the future.
Tim Mason is Chief Executive Officer, Eagle Eye
A retail industry veteran, author and keynote speaker, Tim Mason’s career spans over 30 years and includes experience as the CMO and deputy CEO of Tesco, the largest multinational grocery and general merchandise retailer in the UK. Mason led the launch of Tesco Clubcard in 1995, creating the world’s first major grocery loyalty program. A new edition of his popular business book, Omnichannel Retail – How to Build Winning Stores in a Digital World, was released in September 2023, inspired by the many changes that have impacted the retail sector since its first release in 2019. Tim is also the CEO of Eagle Eye, a leading SaaS technology company empowering personalized marketing and loyalty solutions used by retailers worldwide.