Loyalty is assessed in a new way – Kommersant FM
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Points instead of discounts and rating downgrades for lack of purchases: Russian companies have revised their loyalty programs. As retailers and market analysts told Kommersant FM, in 2022-2023, catering establishments, clothing and equipment stores began to offer reduced prices on goods less often. Instead, active customers are offered bonuses that can be spent on their next purchase. After some time, these points expire.
Business representatives interviewed by Kommersant FM call customer loyalty a new priority.
Deputy General Director of the Kanzler network Elena Nikitina: “In 2022, we stopped providing discounts of 20-30%, giving the third item as a gift, removed quantity discounts and completely switched to a loyalty program, that is, a bonus one. This is simply the historical course of the company’s development, including related to IT solutions. Naturally, exchange rate fluctuations play a role, prices have increased. There is no such need for a direct discount. We work in the premium segment and are interested in long-term interaction with the client. Rather, cheaper brands use this option. We have regular programs, we give bonuses for birthdays, plus special offers for certain events. People love cashbacks, it works very well for returning guests. The growth of new customers has increased, plus the conversion to a second purchase also increased by 30 percent, this was immediately visible in the first few months.”
Vice President for Children’s Jewelry at Inventive Retail Group Maria Golenkova: “In the World of Cubes chain of stores, we had to suspend the loyalty program in 2022, since at that time it was the Lego chain, and the future of the project was in big question. In the spring of 2023, already being a multi-brand project, we relaunched our program to a greater extent as a club privilege program. Purchase history and bonuses have been saved. Previously, we had a linear program: 1% accrual, one write-off threshold – this is a more widespread approach. Now there are three levels, which makes it possible to reward those clients who are more active. We also added to the program the birthday of not only a child, but also an adult, and started doing activities for the third level – master classes on assembling construction sets.”
Marketing Director of the restore chain of hardware and electronics stores: Irina Zueva: “In October 2023, we updated the program. If earlier it was called a bonus or discount program, now it is a privilege program. It combines the ability to accrue, write off bonuses, receive a discount and have additional options in the form of increased guarantees, services, the client is accompanied in the messenger or by phone on all issues of both ordering and delivery. We have thought through the period of participation, that is, if a client does not come to us for two years or more than one year, then he goes down to the previous level. Our task now is to understand what is in demand and what is not. Judging by the way the loyal audience behaves, discounts are not the main motivator for people; they are concerned about the originality of the product, the opportunity to ask some questions, with a guarantee, because Apple is not in Russia.”
Loyalty programs had to be changed by companies that until recently had foreign owners. After Western brands left Russia, their successors had to re-gain the trust of consumers, explained Evgenia Khakberdieva, regional director of the retail real estate department at NF Group: “Brands compete not only with online, but also with other brands. Just last year was interesting because many new players appeared, plus old ones appeared with a new approach. It was important that your client was the first to know about this, for example, that the brand now offers a wider range and works not only with women, but also with men and children.
We see that when this inventory builds up, discounts can start earlier. Discount periods have grown over time. Previously, we were accustomed to the fact that New Year’s discounts began in mid-November and lasted until the end of January, the next ones began only in the summer. Today, promotions begin in October. Their size has become larger. First resale, then mid-season sale, then a full-fledged New Year’s sale.
However, unfortunately, prices are rising above the inflation rate. If there is a shortage in some area, or it is being promoted, then retailers take advantage of this, raising discounts to the limit to which they understand that their consumer is willing to pay this price for the product. Strictly speaking, this game with discounts is the same attempt to set up your operating system in the new realities.”
According to NielsenIQ, in 2023, Russians also began to visit discounters more often. Sales at low-price convenience stores grew 19% year over year.
Everything is clear with us – Telegram channel “Kommersant FM”.
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