Go Omnichannel to Level Up Your Customer Loyalty

The first customer loyalty program, arguably, was the baker’s dozen. Returning customers bought 12 rolls, and the grocer would throw in a wink and a thirteenth. Primitive, but effective for retention. Customer loyalty programs have gotten more sophisticated along the way. Sperry & Hutchinson Co. pioneered a catalog stamp redemption program at the turn of the 20th century, and brands like General Mills and Piggly Wiggly developed similar programs. Nowadays, loyalty programs are fairly ubiquitous in our data-intensive world—on average we generate a staggering 1.15 trillion megabytes of data daily. Savvy brands looking for a marketing edge know data contains multidimensional views of their clientele—if they know where to look. Loyalty programs are key to the widely sought-after Demographic of One. The Mobile Loyalty Program Formula: Reduce Friction, Collect Valuable Data The data challenge Ulta Beauty is one company that has embraced the challenge of using data and analytics to drive personalized customer experiences, in part through its Ultamate Rewards Program—a huge success with more than 95% sales penetration. Of course, all the data and analytics in the world can’t help unless it’s in service of a successful business strategy. In the case of Ulta Beauty, that strategy is to bring all things beauty to the heart of its community. While beauty enthusiasts make up 60% of the overall beauty market, they account for 75% of the spend, according to company research. And these enthusiasts are Ulta’s target—highly engaged on their own terms and seeking superior shopping experiences. Among Gen Z, the difference is even greater: They make up 78% of the market and account for 87% of the spend. So how does data and analytics play a role? The importance of successful loyalty programs cannot be overstated. Ultamate Rewards is a valuable source of zero- and first-party customer data, housed in a platform that’s continually defined (and redefined) to account for shifting needs and behaviors. Individual customer profiles are viewed within broader cohorts or audiences based on purchase patterns, behaviors and other attributes. Analytics techniques like lookalike modeling allow Ulta to identify high-value customers across channels and serve them personalized messaging that’s relevant to the customer’s journey, which is unique and no longer linear. Omnichannel universe Ulta Beauty’s first-ever acquisitions in 2018 were not retail- or beauty-related but rather technology startups. QM Scientific developed an artificial intelligence recommendation engine that is now proprietary to the retailer: This is deployed across Ulta Beauty’s channels including email, web and mobile. The mobile app is the face of its omnichannel universe—it’s the hub of personalization experiences for its guests. Fundamental marketing delivers the right offer and content at the right time—which creates a dynamic interplay with guests and offerings tailored to shoppers’ preferences—and of course integrates the loyalty program. The company also acquired augmented reality company GlamSt and has partnered with digital workflow company Iterate and online booking tool Spruce. These innovative pivots complement the retailer’s brick-and-mortar footprint and elevate its omnichannel capabilities. Ulta Beauty’s deep guest-centricity shaped its transformation from a functional brand—a destination housing all things beauty under one roof—to a purposeful brand, one that celebrates the role that beauty plays in our lives. That connection comes from a detailed understanding of its customer, one that draws from each interaction with its Ultamate Rewards program. And, after all, who knows the customer better than the customer themselves? How Ulta Beauty Keeps Its Challenger Brand Spirit With 1,200 Stores in All 50 States Marketing teams are empowered to test and learn, using pilot programs to explore motivations and learn about guests on a more granular level. Interactive quizzes and augmented reality touch points inspire customers while also collecting information—all to develop an even more holistic picture of the customer. Through proper data management, applied analytics and customer journey activation, all brands can leverage detailed customer data to deliver a premium customer experience.