Consider these statistics from Marigold’s 2024 State of Loyalty
Report for
2024: 88% of consumers say their favourite brand rewards them for their
loyalty, 55% of consumers want brands to offer points/rewards programs, and 80%
like to get product recommendations based on their previous purchases.
In the beauty industry, too, rewards
programs have been a gamechanger, promoting faster business growth, for years.
In a market flooded with different brands, instant accessibility facilitated by
online shopping, not to mention the rise of the “beauty influencer” phenomenon,
it has never been more difficult, or crucial, for beauty companies to embrace
direct customer engagement, and thereby secure loyalty.
So, how can beauty brands optimize
their loyalty programs? Let’s take a look at some of the pains that arise, and
how CoinBridge’s Loyalty-to-Payments™ solution relieves them.
Facing up to the Challenges
The first challenge to loyalty in
the beauty industry is purchase frequency and the desire to constantly stay in
touch with customers.
Although consumers buy products like
cosmetics and perfume regularly, they do so much less often than items, such as
groceries or petrol, that tend to be bought much more frequently – weekly or
even daily. This poses a big obstacle for beauty brands looking for the type of
continuous engagement that ensures they stay ‘top of mind’ for customers.
Another significant challenge facing
the beauty industry – where purchase decisions are frequently influenced by
recommendations, trends, fads, and social media campaigns – is the low inherent
loyalty among consumers. Recent studies revealed that only about 30% of consumers stick with the same
product long term, while 93% have recently purchased a product
based on a beauty blogger’s recommendation. In this fiercely competitive
market, beauty brands cannot depend solely on product quality and pricing to
drive sales.
The third limitation on loyalty
programs in this industry relates to the collection of data that can further be
leveraged to personalize offers and promotions. Beauty brands typically have a
narrower range of product types, which doesn’t reveal enough about their
customers’ preferences and lifestyle to be useful for personalization and
micro-targeting. Additionally, they lack insight into what other or
complementary products customers are purchasing from competing brands. For a
brand to create a full and detailed customer profile, which can then be used to
improve the quality of engagement, it cannot rely solely on purchase data
gathered at its own stores.
The fourth and last hurdle, for now,
is that the beauty industry is highly competitive – a so-called ‘red ocean’.
There are so many products out there, and so many brands, ingredients and
marketing practices. Yet, when it comes to loyalty, everyone offers customers
the same kinds of rewards: samples, early access to new products, experiences
like community events and product masterclasses. Differentiation has become the
name of the game for brands that want to catch a customer’s eye, and loyalty
can be just the place to make sure you stand out.
Loyalty-to-PaymentsTM: a
Stunning Solution for Beauty Brands
Addressing these pain points, and
breaking through the barriers of legacy loyalty, the CoinBridge
Loyalty-to-Payments™ solution gives customers unmatched flexibility in redeeming their points and rewards, with a
greater choice to spend them on their preferred goods or services, anywhere.
Using the brand’s existing app, any loyalty asset – whether points,
coins, miles, or vouchers – is turned into money that can literally be spent in a convenient ‘Tap & Go’ payment experience at any
shop.
This proposition turns on their head
the issues of purchase frequency and low inherent loyalty: with unlimited
opportunities to spend their rewards, customers engage with the brand far more
often (through its loyalty app) than they ever would if points could be
redeemed only for the brand’s own products. Basically, every time they buy a
carton of milk, they think about the beauty brand!
Enabling loyalty members to spend
their points anywhere also generates countless volumes of added-value data
about individual customers’ lifestyles, likes routines and purchase behaviour.
This more extensive picture can then be channelled into a deeper customer
understanding and tailored offers that customers will genuinely appreciate,
making them feel seen, recognized and better understood by the brand – a
feeling that fosters greater brand loyalty. Data can also be leveraged in
planning collaborations with other brands, optimizing loyalty programmes, and
new business development opportunities.
The final clincher is the additional
financial resource provided to households through the Loyalty-to-Payments™
solution. A 2023 IAG/Avios
(UK) study found
that 92% of consumers are turning to loyalty programs for everyday spending, to
make their money stretch further. Consumers’ caution in their spending was also reflected in an unexpected 0.3% fall in EU retail sales in June 2024
compared to May, despite economists’ expectations of a continued rise in
sales. In the context of such economic constraints, the ability to provide
customers with an additional source of disposable income – by way of loyalty
assets that can redeemed for any need, and at any store – makes this the holy
grail of loyalty propositions.
A Shining Future
Bridging the gap between loyalty and
payments, the CoinBridge solution gives beauty brands a smart, innovative
avenue to reward customers for their loyalty. It also creates a tighter bond
between customers and brands in an industry that struggles to foster long-term
loyalty among its patrons. By facilitating positive and frequent engagement
with the brand, generating invaluable customer data, and providing unlimited
redemption opportunities, Loyalty-to-Payments™ is the golden ticket that can
push a brand’s loyalty program to the top.
Join the Loyalty-to-Payments™
revolution, and experience for yourself how this solution can change the game
for the beauty industry. Visit coinbridge.com – the first step in the journey that will take your business to the
next level.