Exploratory Study of customer preferences in Smartphone Loyalty Apps

Despite a proliferation of many variants of loyalty systems in retail organisations throughout the world, countless research papers into the benefits, drawbacks and costs associated with them, they have, in fact, remained largely unchanged over the decades. With the penetration of the smartphone in modern day life, and the associated affordances they bring, many retailers have attempted to leverage these in order to increase sales and customer retention. However, retail based Apps are amongst the lowest in retention and highest in churn rate amongst customers. Clearly they are not engaging the customers and the lack of retention means a lack of transactions. This research aims to survey loyalty programme members to determine which functionality that they consider most important. The aim is to provide a framework for retailers and loyalty app designers, to that they can produce what their customers want, thereby increasing retention, loyalty and ultimately value. The research found that overall the customers was primarily interested in managing the loyalty system itself. The top five most popular answers were all related to managing their loyalty balance. This was closely followed by stock functionality, the ability to find more information, check pricing, to see stock availability, all of which proved to be very popular. Of heartening news for the retailer, is the ability to purchase through the App was a very close third, proving that customers want this too, they just have more immediate priorities. Finally, and rather surprisingly in this digitally connected age, were the communication related functionality. This was the only group where there was a nett negative response from the surveyed members. In conclusion, the data would support that the most important functionality for the end user is what is geared towards them and making their shopping easier